Aid to schools in Indonesia

This is a guest post by Marc Purcell, the Executive Director of ACFID – the peak council for Australian aid and development NGOs, whose members work in over 100 countries.

Dewi was one of millions of Indonesian boys and girls who cannot go to schools each day because there are no schools nearby, and their parent can’t afford basic costs due to living on less than $2 a day. In Dewi’s case, there was an additional impediment – her parents wouldn’t let her attend school because there are no girls’ toilets and she shares the embarrassment of her other female colleges in having to share facilities with the teenage boys.  Now, as a result of living near one of the 2000 new schools built with Australian aid, including with separate male and female toilets, Dewi now has a chance to attend class consistently.

Robert Cannon’ opinion piece (‘That’s no way to aid Indonesia’ 10/1) asks some suggestive questions about the $500 million Australian aid package, the Basic Education Program, for schooling in Indonesia.  However, he essentially compares apples with oranges in contrasting the domestic stimulus package for Australian schools in response to the GFC with the developing bilateral aid relationship with Indonesia.

The scale and purpose of aid to schools in Indonesia is vastly different from the Building Education Revolution. Australia spent $62 billion on schools in Australia last year, while we spent $500 million in aid investment in Indonesia. This equates to 20 cents in aid to Indonesian schools for every $100 spent in Australia schools. The total Australian aid program of $4.3 billion comprises about 1% of the annual Australian budget.

The aid relationship with Indonesia has changed dramatically since the tremendously generous public and Government response to the Asian Tsunami five years ago. Bilateral cooperation systems designed initially to manage and monitor the $1 billion of official aid to the Tsunami response has burgeoned from $159 million in ODA in 2003/4 before the Tsunami to $442 million in 2008-9. It requires a detailed system of planning, implementation and evaluation between the two countries and other donors like the World Bank.

If listening to what the Indonesians want is ‘ideology’ as Cannon’ asserts, and then it is an ideology of blinding common sense. If getting the most marginalised children into school is an Indonesian priority, we should support it.  Indonesia is currently meeting its constitutional commitment to spend 20 per cent of its national budget on education (about $26 billion in 2010).

Barack Obama says that education is the best anti-poverty vaccine. International evidence shows that a better educated population has better human development outcomes over time. As a result of result of attending school for an estimated nine years, a child like Dewi can expect to have longer life expectancy, better health and a fair chance at a higher income.

Indonesia’s GDP is growing but there is still great inequality across the vast archipelago. Of Indonesia’s population of 240 million people – around 110 million Indonesians live on $US2 or less per day. All the Australian investments in schools have been made in provinces with the worst human development indicators – Sulawesi, Kalimantan and Nusa Tenaggara.

The $222 million Australia is allocating to school construction has focused on disaster proof construction to prevent the loss of life experienced in the disastrous earthquake in Sumatra last year. Supporting the building of schools, enables Indonesia to free up funding for better training of teachers so the quality of education can be improved.

More than 130,000 students have enrolled with girls accounting for more than half because Australian built schools include separate toilet facilities for girls and boys.  These schools are trying to integrate students with disabilities (2% of enrolments).  Much more could be done by Australia in disability-inclusiveness, including teacher-training around physical and learning disabilities.

More than half of Australia’s funding supports improving the quality and management of the education sector, with school construction will make up around 45 per cent of funding in coming years.  Indonesia plans to build 4700 more schools over the next five years to meet demand for junior secondary school places, and asked Australia to help fund it because of past success.

The real debate here lies not in whether we should be supporting getting kids into schools in Indonesia, but in the how. But more technical assistance in solely the form of highly paid (some would argue overpaid) consultants, as Cannon proposes, is not the answer.

The evidence shows that funding and empowering Indonesian civil society, like parent’s groups, to monitor education services and hold their government to account is the best way to counter corruption. This where our current program can focus. All new schools built by Australian aid have blackboards out the front where communities can raise concerns about spending or quality for all to see. If there is a lesson for the Australian government here, it is that a similar technique might be applied in Australia!

Marc Purcell is Executive Director for the Australian Council for International Development, the peak body for not for profit aid agencies.

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Marc Purcell

Marc Purcell is CEO of the Australian Council for International Development, the peak body for the not-for-profit aid and development sector in Australia.


  • I am pleased that the issue of budget support and the related assessment of procurement risk has been raised in the context of the recent Articles “That’s No Way to Aid Indonesia” and “$500m at risk in Jakata aid plan” in The Australian of Monday 10th January 2011.

    In 2007 the World Bank (WB) completed a PEFA Report. The Report estimated that just over 60% of aid disbursements from major donors relied upon Indonesia’s fiduciary systems (budget support) including a substantial % of WB expenditure, but in 2007 none by AusAID. Some specific comments from the Report were:
    •“Key weaknesses were identified across various dimensions of the budget execution such as financial reporting and internal controls.
    •Internal controls in the execution of the budget by spending agencies have not scored well overall.
    •Controls in budget execution processes were generally rated low.
    •In practice budget implementation may be significantly delayed because of the lengthy procurement process.
    •The budget execution processes within line ministries appears to be a significant barrier to efficient service delivery.
    •Procurement processes lead to significant delays in the acquisition of goods and services and the implementation of capital projects.
    •Capital expenditure appropriations are frequently under-spent.
    •Much service delivery, for example in education and health is primarily the responsibility of SNG rather than central government.”
    •With regards procurement (PI-19) the ‘use of open competition for award of contracts’ (which is a critical EC budget support criteria) was scored D and “there is insufficient data available to assess on an aggregate basis the extent to which competitive methods were used to award public contracts”.

    While there was in 2007 a focus on public finance management reforms, including ‘a plan for establishing a national Public Procurement Organization as a policy formulation and oversight agency’ and developing an ‘omnibus procurement law is envisaged for consolidating, clarifying and simplifying the numerous procurement rules and regulations’, the Report suggested that ‘institutional arrangements for public finance management reform need to be strengthened by a clearer reform strategy or roadmap, there appears to be limited engagement with line ministries at this stage, and overall a lack of ‘socialization’ of the reforms throughout the government’. The Report also noted that a ‘Financial Management Reform Committee established in November 2001 to oversee and coordinate PFM reforms was no longer operational’.

    A ‘Snapshot Assessment of Indonesia’s Public Procurement System – OECD/DAC Baseline Indicator Benchmarking Methodology’ was also undertaken in 2007 and made similar observations.

    What has changed since 2007 for AusAID to now want to allocate $500m to GoI through a budget support spending mechanism?

    Note: The full text of John Blunt’s submission to the Aid Review can be found at

  • Let me start with a disclosure. I have known Robert Cannon for many years and hold him in high regard. There are surely few expatriates who can match Robert’s practical, on-the-ground, experience of Indonesian schools or his passion for good development practice. He knows whereof he speaks.

    The argument that spending $222 million building schools in Indonesia frees up GOI development funds for other purposes is spurious. We could as easily spend it on paying for monthly rice supplements for teachers, or blackboard chalk or any number of other routine expenditures. If that is the basis of our contribution, let’s call it what it is, budget support, and stop trying to justify it as anything else. If however, we are concerned about aid-effectiveness surely we must concentrate on those things that make the most difference and in which we have a comparative advantage.

    It seems highly improbable to me that this lies in school construction. Indeed, I am struck by the contrast between the Bill and Melinda Gates Foundation approach to education which has the elegantly simple objective ‘an excellent teacher in every classroom’ and an ‘education’ project which scarcely mentions teachers or for that matter students. Robert is right, there is copious evidence of what works in education and top of the list is teacher development. This is something that Australia has a long track record of successfully supporting in Indonesia and many other countries. Not to focus on our comparative advantages and experience is to short-change the Dewi’s of this world.

  • It is gratifying to see this open debate about aid to schools in Indonesia. Discussion can lead to better outcomes, particularly for the ultimate beneficiaries of our aid, the children and their families in Indonesia.

    I would like to respond to both Marc Purcell and Matthew Morris and begin by assuring Marc that I am as much committed as he is to ensuring that the ‘Dewi’s of Indonesia’ can enrol in schools, complete their education in a challenging, caring, pleasant and non-threatening environment, and with access to such basic facilities as toilets. I believe that constructing and maintaining schools should, by now, be a routine responsibility of the Indonesian government.

    It is because I am convinced that the present AusAID plans do not reflect current good practice in basic education development, and the evidence of effectiveness that we now have about basic education in Indonesia (Matthew’s issue), that I wrote the article for The Australian. Restrictions of newspaper space and editing meant that the evidence could not be presented in that article. This is regrettable but reflects the reality of editorial policy.

    What is the evidence? First, it is a matter of concern that very little independent research has been published on Indonesian education upon which to make good planning decisions.

    Second, much of the evidence that we do have comes from the ‘grey’ literature, the studies and evaluation reports commissioned by donors but which have not been subjected to independent peer review. Nevertheless, the cumulative evidence from these studies provides reasonable clear evidence that: (1) centrally managed, large infrastructure projects are less effective than smaller bottom-up projects, based on educational principles, that focus on schools, teachers and communities, and (2) the Government of Indonesia’s record of managing development projects is poor. I can provide a copy of a study I did for the World Bank and AusAID on this: email me at Marc, you pick up some of these themes when you write: “The evidence shows that funding and empowering Indonesian civil society, like parent’s groups, to monitor education services and hold their government to account is the best way counter corruption”.

    Third, information that enables us to make evidence-based decisions about improving the quality of education is now more freely available than at any time. A very recent example of this is the large international study prepared by McKinsey and Company on improving school systems. The study was released in November 2010. The McKinsey study shows that many school systems, not showered with extra money, actually did better than others such as the UK and the USA where standards have slipped. What does make schools better is strikingly similar across the 20 different education systems that McKinsey studied. Successful strategies depend very much on a system’s current stage of development but, unsurprisingly, educational interventions such as curriculum revision, teachers’ skills, and the assessment of learning figure largely.

    In this finding, the McKinsey study echoes other large studies such as the 2007 International Project to Frame the Transformation of Schools. This Project concluded that no single strategy or collection of strategies could be successful unless there is an alignment of change efforts and the focus is on the student.

    To paraphrase Riddell’s question: “How can aid to [Indonesian basic education] be made more effective?” (p. 257), the answer, based on my experience in Indonesian basic education and from my own research and evaluation studies, is to work from the bottom-up (teachers, schools, Districts); empower and support local networks/communities of practice for dissemination of good practices in educational development; avoid one-shot or limited, decontextualised training programs of the kind now proposed by AusAID; and work on the ‘community of practice’ principle including whole school and whole District development. This requires capacity development; not only the capacity of individuals, but also of their organisations and the institutions of educational administration in Indonesia. And when we talk of consultants (highly paid or not) let us think mostly about the very talented Indonesian consultants, most of whom are actually practicing teachers, principals or academics with relevant front-line implementation experience. Perhaps ‘facilitator’ is a more appropriate term. I am emphatically not encouraging more jobs for expatriates.

    I need convincing that AusAID is not being driven by the ideologies of development embedded in the Paris Declaration and its related Jakarta Commitment. I also suspect the political need to spend increasing sums of money on aid is also a strong factor in what we now have. $500 million is not only a lot of money; it is also a suspiciously ’round’ figure! That is, we have supply-driven development rather than demand-led (which does not mean the dominant, centralist demands of Jakarta-based management and political elites).

    I really wish I could believe Marc’s views about disaster proof school construction, provision of facilities for the disabled, provision of toilets and the freeing up of resources for teacher training. For a view about construction issues, a reading of the Independent Completion Report of the Australia Indonesia Basic Education Program (available on AusAID’s web site) presents worrying information about lack of earthquake resistance, poor site selection, limited provision of toilets, lack of availability of enough engineers to supervise and assist with construction, and contracting limitations.

    Frankly, I think it a credit to those contractors and their national and international staff involved in AIBEP that they achieved what they did in such a complex environment. The same can be said for the ICR team that has worked under incredible time constraints to produce their evaluative report.

    But even when schools have been well-built and corruption of processes eliminated what then? Is there a firm guarantee that the Indonesian Government will maintain these new facilities? No. Will we see, as I observed in 2008, schools we had rehabilitated under the ADB Decentralized Basic Education project, being rebuilt or in urgent need of refurbishment only 4 years later because of no or poor maintenance? This is not the kind of “sustainable” development AusAID says it is committed to. Finally, does AusAID have a guarantee that the Government will use its funds freed-up by Australian aid for financial support for teacher training as intended, or is the view of some Indonesian Government officials correct that the education budget provided by their Government will actually be reduced by an amount equivalent to that of Australian support?

    There is much to discuss and much to remain concerned about in the current AusAID proposals.

  • I enjoy reading public commentary on aid issues, including Robert Cannon’s op-ed for The Australian that questions Australia’s approach to supporting education in Indonesia, and Marc Purcell’s persuasive rebuttal.

    Mr Cannon argues that ‘the evidenced-based, educational perspective on schools and what happens in them is missing.’

    I read Robert Cannon’s op-ed several times and agree with this statement – I could not find much evidence for many of Mr Cannon’s assertions.

    If Indonesia scores poorly on Transparency International’s perceptions of corruption, is this evidence that there is corruption in this particular education program?

    If Australia’s domestic programs are implemented poorly, and this is debatable, is this evidence that international aid programs will be?

    If technical assistance is the solution, then where is the evidence that this will be more effective than the current strategy?

    If Mr Cannon would like to have an evidence-based debate on the effectiveness of Australia’s support for education in Indonesia, then a good place to start would be to look at the experience of the existing project over the last four years.

    AusAID have, commendably, published the Independent Completion Report for the first phase of the project, which sheds some light on some of the concerns that Mr Cannon raises.

    The evaluation report does support Mr Cannon’s concern that there is insufficient funding for school maintenance, with most Indonesian government funding going to teacher salaries. (Though the report is less sanguine about the effectiveness of technical assistance in helping the Indonesian government to remedy this – something for AusAID to think about for Phase 2)

    This evaluation report does not identify any specific cases of corruption, but it does commend the safeguards put in place to manage fiduciary risks in the project.

    The evaluation concludes that the project has been ‘implemented effectively and efficiently, and is a successful program.’ This included building more than 2,000 schools and creating over 330,000 school places.

    The project does include technical assistance, including on how the Indonesian government can fund education and maintenance, and the evaluation report comments are generally favourable on the value of this component of support.

    Yet on the issue of technical assistance, it is also worth noting the broader evidence on the efficacy of this instrument – for a good summary see Roger Riddell’s ‘Does Foreign Aid Really Work?’ – which suggests that it is not the panacea that Mr Cannon suggests.

    We need more discussion on aid in Australia, and like Mr Cannon I agree that it should be grounded in good evidence!

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