JAKARTA – The Srikandi Sejati Foundation’s office in East Jakarta, typically a bustling center of activity, has been eerily quiet since late January. Staff who would normally submit reports, conduct interviews, and provide HIV/AIDS support have seen their work grind to a halt, according to the foundation’s program manager, Ms. Kamel, who spoke with The Straits Times.
This disruption comes in the wake of a decision by U.S. President Donald Trump to freeze a large portion of U.S. foreign aid shortly after returning to office in January. The freeze has severely impacted global development initiatives linked to the U.S. Agency for International Development (USAID).
While a U.S. federal judge ruled on February 14 that the Trump administration must restore foreign aid funding, uncertainty still surrounds the long-term effects of this freeze. Indonesian NGOs, such as the Srikandi Sejati Foundation, which relies on USAID funds distributed via a third-party organization, are already grappling with the fallout.
Impact on Indonesian NGOs
The Srikandi Sejati Foundation, which depends on U.S. aid to cover salaries and operational costs, was forced to lay off staff in early February, directly affecting its HIV/AIDS support services, including treatment access and educational efforts. The foundation’s staff, many of whom have worked there for over a decade, now face an uncertain future. Ms. Kamel noted the difficulty of finding alternative employment for staff, particularly for trans women who often experience social stigma.
USAID’s Role and Indonesia’s Health Challenges
USAID is the world’s largest official donor, with an annual budget exceeding $40 billion. A significant portion of this aid goes to health, development, and humanitarian initiatives. In Indonesia, USAID has committed to investing $800 million in programs related to health, governance, economic development, and environmental sustainability. In 2024, USAID allocated $153 million to Indonesia, with the bulk directed toward health, followed by humanitarian aid and economic support.
The aid freeze is poised to have a particularly detrimental impact on healthcare programs in Indonesia, especially those targeting infectious diseases such as HIV/AIDS and tuberculosis. Indonesia is home to the second-highest number of tuberculosis cases globally, and the disease remains one of the leading causes of death worldwide. Tuberculosis eradication is also a key priority for Indonesia’s President Prabowo Subianto.
Delayed and Uncertain Assistance
Indonesian health officials, including Health Minister Budi Gunadi Sadikin, expressed concerns over the freeze’s immediate effects. “That is on hold. Not stopped,” he stated on February 6, referring to the country’s joint health projects with USAID. He added that there was no clarity yet on whether the freeze would be permanent, but he expected further updates within the next 90 days.
Indonesia’s Coordinating Minister of Economic Affairs, Airlangga Hartarto, reassured the public that USAID’s funding freeze was unlikely to cause significant disruption to large-scale projects, as USAID ranks fifth among international donors to Indonesia. However, experts such as Dr. Asra Virgianita from the University of Indonesia highlighted the sudden nature of the freeze and its disproportionate impact on health programs.
Threats to HIV/AIDS Services
The disruption is already felt in the field, particularly among those reliant on HIV/AIDS treatment and education. The Indonesia AIDS Coalition, which partners with local NGOs like Srikandi Sejati, provides essential services such as HIV testing and medication. Anti-retroviral therapy, which is crucial for managing the virus, can be compromised without consistent access to treatment, potentially leading to drug resistance and weakened immune systems.
The financial uncertainty is further compounded by the mass layoffs among outreach workers in early February, with over 500 workers affected by the freeze, many unsure if they will receive their salaries.
Indonesia’s Search for Alternative Funding
In response to the funding shortfall, the Indonesian government is seeking alternative donors. Minister Budi revealed that Indonesia had secured a commitment from Australia for A$130 million (approximately $110.8 million) to help fill the gap, and he is exploring additional sources of financial support.
China, Indonesia’s largest development partner between 2015 and 2022, provided $2.3 billion annually in aid, accounting for 21% of the country’s total foreign assistance during that period. Other notable contributors include the World Bank, the Asian Development Bank, and countries like South Korea, Japan, Germany, and Australia.
Rethinking Foreign Aid Dependence
Some analysts view the aid freeze as an opportunity for Indonesia to reassess its reliance on foreign assistance. Dr. Sidrotun Naim, an expert at IPMI Institute, suggested that Indonesia could diversify its funding sources and strengthen its domestic capabilities, particularly by seeking support from philanthropic organizations such as the Walton Family Foundation and the Gates Foundation.
Dr. Naim also emphasized the potential for “people-to-people diplomacy” as a means to forge new partnerships for development aid. “Indonesia is not a poor country. If we can maximize domestic funding, we can tackle this issue independently,” she added.
As Indonesia navigates the complexities of reduced foreign aid, its response to the freeze will determine the future of crucial health programs and its broader development goals.
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