Indonesia’s decentralisation reforms have made enormous progress over the past two decades, but challenges remain. Many service delivery responsibilities have been transferred to local governments, who now administer a third of Indonesia’s national budget. In many parts of the country, services have improved, yet poverty and inequality—particularly for women, people with disabilities, and other vulnerable groups—remain significant challenges and regional disparities persist. Moreover, these issues have been exposed and exacerbated by the ongoing COVID-19 pandemic.
The causes of persistent poverty, inequality, and regional development disparity are complex. A common underlying factor is the inability of local governments to exercise the increased powers and responsibilities imparted to them under Indonesia’s decentralisation reforms, including raising revenue through taxation, allocating budget to priorities, and delivering public services that better meet the needs of local communities.
SKALA will focus on accelerating the improved delivery of services in less developed regions at the subnational and local level, with a focus on ensuring better access for Indonesia’s vulnerable groups, including women and people with disabilities.
SKALA builds on, and takes to scale, the successes and learning from Australia’s previous 17 years of support to Indonesia’s decentralised government system. SKALA supports subnational governments’ capacity (in identified provinces across the country) to implement and deliver basic services for communities. It does so by strengthening different components within Indonesia’s decentralised governance systems, such as public financial management; minimum service standards; and mainstreaming gender equality, disability, and social inclusion. The program will support work to align efforts, resources, and expertise between stakeholders at the national government level (which sets policy and provides funding) and the subnational government level (where services are delivered).
The program will work in up to eight provinces across Indonesia over the life of the program, especially in disadvantaged regions primarily in Eastern Indonesia and special autonomy provinces.
SKALA’s overarching goal is to help reduce poverty and inequality within Indonesia by improving basic service provision to poor and vulnerable communities in less developed regions. SKALA will achieve this through the following pillars:
Building the capacity of local governments to deliver their core functions is the central pillar of the program. This pillar is complemented and reinforced by pillars that work to strengthen the enabling environment at the national level and to build citizen engagement and participation, and ultimately demand for improved services, particularly among women, people with disabilities, and vulnerable groups.
