UK Aid Policies Could Cost Indonesian Economy $2.1 billion

Published: Wed 27 Mar 2013 09:41 AM
UK Aid Policies Could Cost Indonesian Economy $2.1 billion
Jakarta, March 26, 2013 - Pro-development group World Growth says that UK aid programmes could cause losses to the Indonesian economy of as much as $2.1 billion annually.
The group made the announcement upon release of a new report, ‘DFID – Department for International Deceit?’, which is highly critical of the UK’s so-called ‘green aid’ programs in Indonesia.
World Growth Chairman Ambassador Alan Oxley, said that the UK’s current aid programmes in Indonesia concentrate entirely on environmental outcomes and neglect Indonesia’s development priorities.
“The UK decision to cut all aid to Indonesia, other than environmental aid, mirrors a lamentable trend among Western donors to reduce spending on programs that promote economic growth,” he said.
“UK bilateral aid spending in Indonesia through its aid agency – the Department for International Development (DFID) -- is dominated by two policy areas: illegal logging and so-called low carbon development.”
“The UK Government has taken the lead on regulating imports of timber products into the European Union. The EU’s own modelling indicates that this will cost the Indonesian timber sector as much as $2.1 billion annually and result in the loss of 450,000 jobs.”
Ambassador Oxley said that the DFID’s other major policy push was also likely to have negative impacts.
“DFID said it was the responsibility of the UK to demonstrate that ‘low carbon development’ is viable. They haven’t done that. But they are pushing this unproven development model on to other countries such as Indonesia.
“The question that needs to be answered is, why would an agency that is supposed to reduce poverty spend money that damages economies?
“DFID appears to be more interested in advancing the UK’s foreign policy goals than supporting development outcomes for Indonesia.”
Ambassador Oxley pointed out that DFID has been spending significant sums to advocate for the adoption of climate change policies in developing countries. He stated that DFID spent almost £450,000 in the lead up to the 2007 UN climate conference in Bali to push for its preferred policy measures.
“DFID appears to have little regard for the economic damage they might inflict,” he said. “In 2011, DFID Indonesia officials stated that they have “never treated development and environmental protection as being automatically in tension.” It’s time they did.”
“DFID itself has acknowledged that climate change and deforestation are not priority areas for Indonesian society at large. The question to DFID is whose interests its aid is serving?”
World Growth calls on DFID to suspend all environmental and climate change related aid programmes to Indonesia and commission an independent internal inquiry into the underlying costs and impact of such programmes.
Read the full report here:
About World Growth
World Growth is a non-governmental organization established with an educational and charitable mission to expand the education, information and other resources available to disadvantaged populations to improve their health and economic welfare. At World Growth, we embrace and celebrate the new age of globalization and the power of free trade to eradicate poverty and improve living conditions for people in the developing world. For more information on World Growth, visit

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