Indonesia is a priority country of SECO’s economic cooperation and development. Indonesia is the 7th largest economy in terms of purchasing power parity and a member of the G-20. Nevertheless, about 25 million Indonesians still live in poverty. SECO supports the country in overcoming various development challenges and in becoming more competitive, resilient, equitable, as well as resource efficient.
Indonesia is committed to achieve the Sustainable Development Goals successfully but still faces a complex set of environmental, economic, and social challenges, ranging from depletion of natural resources and pollution to growing income inequality.
Gaps with regard to poverty and gender equality persist
Despite steady economic growth, the gap between rich and poor has widened. Poverty and gender are strongly connected and the slow pace of job creation is another challenge that hampers poverty reduction efforts, largely affecting the two million young people who enter the labour market each year. Having the world’s fifth largest emission of greenhouse gases, Indonesia also plays an important role in addressing climate change.
What are SECO’s objectives?
SECO supports Indonesia in addressing various development challenges and in its efforts to become a reliable political and economic partner for Switzerland through greater competitiveness, resilience and equity, as well as a more efficient and sustainable use of natural resources. SECO strengthens:
- Effective public institutions, particularly in urban areas
SECO promotes economic and fiscal policy reforms to encourage a more efficient and transparent use of public funds. Public services, especially in urban areas, should be useful and reliable, as by 2045, 7 out of 10 Indonesians will live in cities. Hence, SECO puts a focus on supporting the government in addressing rapid urbanisation challenges to ensure that, through better planning instruments, cities grow more sustainably.
- Competitive SMEs
SMEs are the backbone of the country’s economy as they absorb more than 90 percent of the Indonesian workforce. However, many SMEs suffer from low productivity and limited access to financial services and international markets. To stimulate private-sector development, SECO assists SMEs’ efforts to obtain non-discriminatory and improved market access for goods, services, and natural resources. Second, it supports SMEs and larger companies in building good environmental, social, and governance practices, in order to enhance companies’ financial performance and their ability to grow and compete. Third, SECO supports the Indonesian Government in reducing financing obstacles for SMEs.
Apart from SECO, the Peace and Human Rights Division (PHRD) within Switzerland’s Federal Department of Foreign Affairs also operates in Indonesia. From 2021 to 2024, a total of some CHF 65 million is foreseen for SECO’s economic development cooperation with Indonesia.