Challenges in connectivity and trade logistics are undermining Indonesia's competitiveness. Also, a number of investment climate constraints are limiting the potential development of the private sector. The government of Indonesia is well aware that private sector-led growth is vital to Indonesia’s competitiveness in order to create jobs for a growing population, to address the rural-urban income gap and to provide sustainable services for an increasingly modern and urbanized society.

The Multi-Donor Facility for Trade and Investment Climate (MDFTIC) is a program which aims to help strengthen the capacity of Indonesia's institutions to improve trade and investment climate policies. The facility was established in November 2008 at the request of the Ministry of Trade (MoT) and the Coordinating Ministry for Economic Affairs (CMEA), and has been funded by the Government of the Netherlands, the Swiss State Secretariat of Economic Affairs (SECO), and the United States Agency for International Development (USAID). The World Bank manages the MDFTIC program secretariat on behalf of the government and development partners.

1) Imrovement of connectivity through i) enhancing trade facilitation, ii) monitoring progress in implementing logistics reform and iii) supporting public-private dialogue on the importance of logistics for competitiveness.

2) Improvement of the regulatory envrionment through i) business environment reform and investment climate, ii) enhancing competitive clusters.

3) Enhancing the integration with global markets through i) improved policy environment to manage openness, ii) agriculture export competitiveness and iii) risk management and price stability of food commodities.

Expected results:  

Under the governance structure of this Facility, the funds are allocated to specific interventions for policy advice, capacity building and institutional strengthening for governmental institutions involved in the three core areas of intervention of the Facility. They are grouped into two pillar. The first one on investment climate, which enables i) ease of doing buidness and licencing reforms, as well as one-stop shop implementation- and ii) reforms for investment and jobs in the tourism sector. the second pillar focuses on trade and logistics and enables i) reforms in martitime logistics connectivity- strengthens ii) international trade and policy integration- and creates iii) a platform for port investment in Eastern Indonesia.

Phase 1 01.09.2009 - 31.12.2017   (Completed)