In 1952, Switzerland and Indonesia established diplomatic relations. Development Cooperation between Indonesia and Switzerland began in the 1960s and a legal framework for technical cooperation was established in 1971.
For some 20 years (1976-1996), Indonesia was a priority country for the Swiss Agency for Development and Cooperation (SDC). SDC activities - totaling CHF 265.5 million - focused on four main sectors: human resources development, urban planning and infrastructure development, health care and rural development. In 1992 SDC decided to phase out its activities over a period of 10 years. The funds earmarked for assistance dropped from an annual CHF 20 million in 1992 to around CHF 4 million in 1998. The Cooperation Office closed its doors in 1998.
During this period, Switzerland extended some support in the area of economic development cooperation through the State Secretariat for Economic Affairs (SECO), mainly through mixed credits. The first credit line was approved in 1983, followed by a second in 1991. Transport infrastructure was the sectoral focus.
In 2003, SECO began to scale back its assistance through this instrument, but continued to grant support through the IFC PENSA project (Program for Eastern Indonesia SME Assistance), business promotion projects implemented through the Swiss Import Promotion Programme (SIPPO), and projects for sustainable forest management implemented by the International Tropical Timber Organization (ITTO).
In the wake of the tsunami of 2004, SDC allocated around CHF 13 million in humanitarian aid for reconstruction and emergency relief in Aceh. These programs came to an end in 2010, with one exception: technical assistance for the drinking water treatment plant in Banda Aceh will continue until the end of 2011.
In 2008, Indonesia became a priority country for SECO’s economic development cooperation under the 2009-2012 framework credit for development cooperation approved by the Swiss Parliament. At this point, SECO was refocusing its work on a limited number of developing countries reaching the status of middle-income countries.