USAID’s enduring partnership with Indonesia, established in 1950, encompasses a wide range of initiatives, from cocoa and coffee bean production to digital training sessions. The Government of Indonesia (GOI) has identified four priority areas for USAID’s support, which are “effective democratic governance strengthened,” “inclusive economic growth increased,” “environmental sustainability improved,” and “priority health outcomes improved.” Through three recent USAID programs in Indonesia, both nations reaffirm their dedication to these objectives as they strive towards self-reliance in the Indo-Pacific region.

Strengthening Democracy

Among the USAID programs in Indonesia that aim to strengthen their democracy, is the Indonesia Civil Society Forum (ICSF). In 2023, the fourth annual ICSF ran from June 14 through June 15. The USAID-MADANI Project, a project that spans 32 Indonesian districts and cities and strives to keep the government accountable and bolster civil service organizations (CSOs), primarily organized the forum. The importance of CSOs and citizen involvement to maintain a thriving democracy cannot be understated as democracy positively impacts poverty. According to the World Bank, 9.5% of the Indonesian population lived under the national poverty line in March 2022.

While citizen support for Indonesia’s democratic government remains strong, it is not immune to challenges such as increasing social intolerance regarding religion or politics, misinformation and the changing role of CSOs. ICSF allows Indonesia’s civil society leaders to convene and discuss how to tackle these issues. The forum was especially relevant this year with the impending 2024 presidential election.

Coffee and Sustainability

In line with Indonesia’s goals of economic growth and improving environmental sustainability, USAID launched the Landscape Approach to Sustainable and Climate Change Resilient Cocoa and Coffee Agroforestry (LASCARCOCO). The initiative is in partnership with Olam Food Ingredients (OFI), Rikolto, Hershey’s and the Indonesian government. It involves a $8.2 million investment in Indonesia’s coca and coffee industry and the training of 6,500 farmers in North Sumatra, South Sulawesi and East Nusa Tenggara; districts where coca and coffee production has been on a sharp decline due to climate change.

Farmers will receive training in sustainable agroforestry, a technique where other income-generating crops are integrated with cocoa and coffee plants.

In 2021, Indonesia was the world’s 13th largest exporter of cocoa beans, which means several countries are dependent on them for exports. The country exported $72.9 million in cocoa beans in 2021, with central markets in Malaysia, Singapore, the Philippines and Japan. The U.S. continues to make up its largest export market. The citizens of Indonesia are also heavily reliant on the coffee and cocoa market; 1 million farm households in Indonesia rely on coca farming to support their families and make a living.

Unfortunately, a lack of farmland, a shortage of reliable infrastructure and extreme weather conditions have driven up the cost of coffee production. Production could decline by 18% in the 2023-2024 market year, while exports could decline by 33%.

LASCARCOCO will increase production, build economic sustainability, support farmers’ livelihoods and meet demands in the international market. One U.S.-based company that will benefit from this initiative is Hershey’s, which will purchase cocoa butter from Indonesia for its own chocolate production.

Digital Access

TALENTA is another one of the USAID programs in Indonesia that positively benefits poverty and the economy. The program will focus on building Indonesia’s digital capabilities and economy through TALENTA. Organizations involved in the initiative are Amazon Web Services and Elitery, an IT management company located in South Jakarta, Indonesia.

TALENTA’s collective goal is to equip 60,000 graduates from 20 different universities with the skills necessary for this changing workforce, especially with Cloud technology. The initiative also aims to establish 100 startups, all of which will strengthen Indonesia’s economy.

Indonesia’s digital economy has been on the rise since 2017 and it could increase by 62% in the 2021-2025 period and will continue growing well into 2030. The expansion of their digital sector has the potential to contribute 4,434 trillion in rupiahs to Indonesia’s GDP by 2030, which is also why the GOI has been encouraging digital literacy among younger generations.

– Jianna Choi
Photo: Unsplash