Regions and Countries

	Table of Contents
p. 9 of 33 BACK | NEXT I. Current Development Trends and Issues A. Political Setting B. Economic Growth C. Poverty D. Governance and Institutional Capacity E. Private Sector F. Gender Assessment G. Environment H. Regional Cooperation I. Development Constraints II. The Government's Development Strategy III. ADB's Development Experience IV. ADB's Strategy V. ADB's Assistance Program VI. Risks and Performance Monitoring and Evaluation

Country Strategy and Program 2006-2009 (Draft for Consultation): Indonesia : I. Current Development Trends and Issues

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H. Regional Cooperation

32. Indonesia is a founding member of Association of Southeast Asian Nation (ASEAN) and also of two subregional cooperation initiatives: the Brunei Darussalam-Indonesia-Malaysia- Philippines East ASEAN Growth Area (BIMP-EAGA) and the Indonesia, Malaysia, Thailand- Growth Triangle (IMT-GT). Developments such as the Asian Financial Crisis in 1997/98, SARS, HIV/AIDS, Avian Influenza (AI), and transboundary haze have re-emphasized the importance of Indonesia’s participation in regional cooperation.

33. Indonesia’s participation in ASEAN is particularly important: ASEAN’s commitment to and progress towards a single market in Southeast Asia represents real potential for Indonesian firms and individuals to enjoy economies of scale from a market of more than one-half billion people. ASEAN also provides a forum for discussing and resolving bilateral issues. BIMP-EAGA and IMT-GT are designed to address the social and economic development of less developed and more remote territories: to encourage increased trade, investments and tourism and people-to-people contact in the two subregions. BIMP-EAGA includes all of Brunei Darussalam; Indonesian Kalimantan, Sulawesi, Maluku and Irian Jaya; Sabah, Sarawak and Labuan in Malaysia; and Mindanao and Palawan in the Philippines. IMT-GT consists of eight provinces in southern Thailand, seven northern states of peninsular Malaysia and nine provinces in the island of Sumatra in Indonesia. Both initiatives suffered from the Financial Crisis when governments were focused on national problems, public budgets sharply limited, and the private sector under stress. In 2005, the participating Governments recommitted to each of these subregional initiatives and they are receiving renewed support, including from ADB which acts as a development advisor to both.

34. ADB has long supported regional cooperation efforts in Indonesia and the surrounding archipelagic Southeast Asia. Indonesia and the neighboring countries are characterized by a geography consisting of thousands of islands, many of them relatively isolated from each other. The common geography and shared cultural and historical experiences enhance the ability to work together to solve problems. Based on their common development context, a Regional Cooperation Strategy and Program (RCSP) for the archipelagic Southeast Asia subregion is being drafted. The present draft focuses on addressing issues of international competitiveness and improving environment management especially for marine resources in the Sulu-Sulawesi Sea. Competitiveness, in particular, is paramount for Indonesia to fully participate in an increasingly harsher international economic environment and to meet its commitments with respect to ASEAN.

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