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Country profile
Indonesia is an archipelago of some 17,000 islands with a population of 223 million. With per capita GNI of nearly US$4,000, Indonesia is a middle income country, but poverty remains a significant issue. The most recent poverty survey, conducted in 2007, estimated that nearly 6.7% of the population live below the dollar-a-day poverty line, while 45.2% live on less than two dollars. Among the challenges of recent years have been the transition to a democratic system and recovery from the Asian financial crisis of 1997/8.
ODA to Indonesia was US$1.4 billion in 2006, with Japan, the World Bank and Australia the top three donors. As a middle-income country, this amounts to less than 1% of GNI. Nonetheless, donors have been increasingly active in Indonesia, particularly since the devastating tsunami and earthquakes of 2004.
Indonesia has set out a clear national development agenda through its Long-Term Development Plan 2005-2025 and Medium-Term Development Plan 2004-09. However, it continues to suffer from capacity constraints in areas such as project design, management and reporting. It is also undergoing a major process of decentralisation, and capacity development at lower levels of government is a key aid effectiveness challenge.
Indonesia discontinued its Consultative Group process in 2007, because it was no longer in need of concessional development borrowing. However, it is a signatory to the Paris Declaration, and in 2009 it issues the Jakarta Commitment on Aid for Development Effectiveness – an agreement with development partners on operationalising the Paris Declaration and Accra Agenda for Action. Implementation will be supported by an Aid for Development Effectiveness Secretariat. Indonesia did not participation in the 2006 round of Paris Declaration monitoring, so the 2008 survey establishes its baseline.
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