Indonesian President Joko Widodo is pushing ahead with a new capital city for Indonesia, a project he hopes will be one of his legacies. Photo: AFP / NurPhoto / Andrew Gal

In September 2015, world leaders came together to form the 17 UN Sustainable Development Goals (SDGs) to achieve globally inclusive economic progress, social development and environmental conservation by 2030. Although the international community is engaging in achieving the 2030 agenda, the pace is not at par with the deadline. To hasten this process it is of immense importance to surpass the crucial technological and financial challenges in implementing the SDGs.

Indonesia is one of the shining examples in Asia of not taking on the SDGs in the form of “business as usual” in the country’s development agenda. It recognizes that mainstreaming the SDGs in the national development programs is crucial to achieving them.

Most of the targets are linked to the midterm national plans known as the Rencana Pembangunan Jangka Menengah Nasional (RPJMN) that brings a confluence between the sustainability goals and President Joko Widodo’s nine focus areas known as the Nawa Cita, meaning “nine agendas.”

Indonesian Finance Minister Mulyani Indrawati explains that the country is committed to internalizing the SDGs in the national budget both on the expenditure and the revenue side. This would involve measures such as pledging budgets for crucial SDGs, and tax incentives for companies with higher commitments toward the SDGs.

The United Nations Development Program (UNDP) recognizes that Indonesia needs to focus on accelerating the SDGs for local action, financing the goals by looking at it as a trillion-dollar opportunity in the long run and finally, inclusive action by participation of all stakeholders. To drive the SDGs, the country has recently implemented two major financial programs, which have huge potential in bridging the SDGs budget gaps:

  • SDG Indonesia One:The Ministry of Finance in collaboration with a state-owned infrastructure financing enterprise, PT SMI initiated this benchmark blended finance program in 2018. This initiative is founded on four platforms: development facilities, financing facilities, de-risking facilities and equity funds, tailored in order to satisfy the crucial needs of the fund investors. The financial plan is aimed at attracting private capital and philanthropic donations in addition to public money, which will be managed and implemented on the SDGs through innovative products at the ground level. It is a method by which Government agencies, multilaterals, equity investors, climate funds, insurance companies, etc. accumulate money on a financial platform and can choose particular SDGs they want to support.
  • Islamic Finance: These international financial instruments are used in supporting the SDGs. It is one-of-a-kind type of financial products that diversifies the funding source in the global market by tapping a large array of investors. In Indonesia, the UNDP has collaborated with Badan Amil Zakat Nasional, the national Zakat(obligatory Islamic charity collection body) to use these funds for local SDGs implementations such as renewable energy projects among others. The UNDP has also partnered with Badan Wakaf Indonesia, the national Waqf board, to work on SDGs by developing a digital platform for the charitable contributions.

The newly formed Indonesian government after the recent general elections is seen as a major engine of the SDGs. According to Indonesia’s Ministry of National Development Planning, from the governance perspective, two aspects are well recognized by the country.

First, decentralization of the SDGs implementation at all levels of governance to ensure its local impact. National and sub-national governments are expected to be equally committed despite political differences. For local action, dis-aggregated data collection and management at various local scales ensures inclusiveness in development.

Second, collaboration of all stakeholders, ranging from academicians to parliamentarians is crucial for the SDGs. In Indonesia, the non state organizations too have been essential in taking up issues in the field of gender, healthcare, urban waste management, youth problems, etc. The Fishery Area Access Management Program is a very good example of a successful collaboration between the government and non-state actors.

Indonesia is a relatively small economy in the Asia-Pacific region compared with giants such as China, India and Australia. In terms of SDG achievement, China and Australia have seemed to perform well in 2018, relative to Indonesia and India. Although World Bank estimates show that Indonesia’s gross domestic product is much less than half of India’s GDP, the former has laid a stronger focus on sustainability in recent times. This is evident from the UN Sustainable Development Solutions Network’s SDG Index and Dashboards Report 2018, where India ranked 112 out of 156 countries, in terms of SDGs performance, lagging behind Indonesia at a rank of 99.

The pertinent question that arises out of this narrative is, can the rest of Asia  follow Indonesia’s path of taking the SDGs a bit more seriously?

Soumya Bhowmick is an associate fellow at the Centre for New Economic Diplomacy, Observer Research Foundation, India. His research focuses on globalization economics, Indian economy and governance, and sustainable development.

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