Competitiveness and sustainability: SECO’s new economic cooperation program with Indonesia

Bern, 25.02.2021 - Switzerland and Indonesia renewed their development cooperation on 25 February 2021 by jointly launching SECO’s new Economic Development Cooperation Program with Indonesia 2021-2024. The SECO will provide USD 65 million in grant funding to support Indonesia in becoming a more competitive, resilient and equitable economy.

Switzerland intends to support Indonesia on a more sustainable and inclusive development path. To do so, the new program focuses on two main priorities: fostering effective public institutions, namely in urban areas, and strengthening private sector competitiveness. Special attention will be given to small and medium-sized enterprises, as they are the main drivers of employment. The Swiss technical assistance will work in areas like skills develop¬ment, decent work, tourism, urban development, as well as sustainability, including in commodity sectors such as palm oil. Gender equality, climate change and efficient use of resources will be transversal themes guiding the Swiss engagement. Over the four years, SECO will provide USD 65 million in support of the Programme.

Conclusion of the Comprehensive Economic Partnership Agreement
Indonesia has been a priority country for Switzerland’s development cooperation since the 1970s. Over time, the two countries have become close economic and political partners, celebrating 70 years of diplomatic relations this year. These close relations have, inter alia, led to the conclusion of the Comprehensive Economic Partnership Agreement (CEPA) between the EFTA States and Indonesia, which will be subject to the popular vote in Switzerland on 7 March 2021. The CEPA will substantially improve market access conditions on both sides, deepen bilateral economic relations in a manner consistent with the objective of sustainable development and further strengthen the economic development cooperation.

The new cooperation program builds on SECO’s preceding cooperation programme achievements and is closely aligned with the Indonesian National Medium-Term Development Plan 2020-2024 and the UN Agenda for Sustainable Development 2030. It focuses on high quality technical assistance, particularly in sectors where Switzerland has proven expertise and where Indonesian demand is high.

Commitment to a more sustainable Indonesian palm oil sector
While Indonesia’s palm oil sector is a major driver of exports and economic development, the rapid increase of production has also come at a high social and environmental cost. The Indonesian Government recognises the need to strengthen the environmental and social sustainability of palm oil production in line with its commitments under the CEPA. Under the new Cooperation Programme, SECO will remain committed to support these efforts. Together with the United Nations Development Programme (UNDP), SECO supports the Indonesian Government to take the lead in creating an environment where palm oil is produced more sustainably and inclusive. A dialogue among all relevant public and private stakeholders has resulted in a national action plan for sustainable palm oil production. This action plan was signed into law by President Joko Widodo in 2019, demonstrating Indonesia’s commitment.

In addition, through the Sustainable Trade Initiative (IDH), SECO is promoting greater sustainability, also in palm oil supply chains. IDH is active in six provinces to promote sustainable economic development at the regional level. This with a focus on sustainable production, forest conservation and social inclusion of indigenous populations. Direct beneficiaries are especially smallholder oil palm farmers and their families, who are trained in better and more sustainable production methods.

Address for enquiries

State Secretariat for Economic Affairs SECO
Holzikofenweg 36
CH-3003 Bern
Tel. +41 58 462 56 56
medien@seco.admin.ch