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ndonesia and Germany have signed an agreement on technical cooperation focused on effective governance, technical and vocational education and training (TVET) and the protection of the environment and biodiversity.

Valued at almost 37 million euro (US$41.4 million) in grant funding, the agreement is financed by the German Federal Ministry for Economic Cooperation and Development in four new projects involving various Indonesian government agencies.

It was signed on Wednesday by the Indonesian Finance Ministry’s director general for financing and risk management, Luky Alfirman, and German Ambassador to Indonesia Peter Schoof at the ministry’s compound in Jakarta.

Schoof said the cooperation aimed to provide the Indonesian side with Germany’s best practices in resource management, with one of the projects offering assistance for improving tax collection.

“One of our objectives is to strengthen the government mechanisms of the Indonesian economy,” he told The Jakarta Post at his embassy office after the signing ceremony.

The grant also covers cooperation on TVET, an area President Joko “Jokowi” Widodo has been keen to explore with Germany.

During his meeting with German Chancellor Angela Merkel in 2016, Jokowi said Indonesia’s vocational education needed help from Germany, especially in electricity generation and transmission, textiles, maritime industries and other sectors.

In 2017, National Development Planning Agency (Bappenas) head Bambang Brodjonegoro and Germany’s Federal Minister for Economic Cooperation and Development Gerd Müller signed a letter of intent (LoI) to deepen their partnership.

According to Statistics Indonesia (BPS) data from last year, vocational school graduates accounted for 11.24 percent of Indonesia’s unemployed.

Wednesday’s agreement was important because President Jokowi had said he would focus more on human development in his second term, Schoof noted.

He said Germany had found success in its vocational education system, owing to a special model that allocates almost 50 percent of the time spent on vocational training for on-the-job training.

“We have a hybrid network of companies organized [under industry] chambers on the one hand and the education ministry, where they are basically [integrated]. In Germany, there’s no technical education at the secondary level without this dual education component,” he said.

The projects under the deal would be implemented by Bappenas and other relevant ministries and subnational institutions with the support of the German Corporation for International Cooperation (GIZ).

Under the same deal, Germany also acknowledged Indonesia’s leadership in climate issues and wanted to help overcome the challenges it faced, specifically in the rehabilitation and conservation of peatland and mangrove ecosystems in the Kayan Sembakung delta of North Kalimantan, which faces major environmental damage due to shrimp farming.

According to 2016 BPS data cited by news agency Antara, shrimp production is one of the top contributors to North Kalimantan’s economy, despite fluctuations in its value over the years.

GIZ country director Martin Hansen, who visited the area last week, said it was not easy to strike a balance between environmental conservation and economic development, particularly with many shrimp farmers living off the commodity as a main source of income.

“We have [sat down] with the local decision-makers, starting with [...] sound diagnostics and mapping out which areas [are affected],” Hansen said.

He said he had met people living in the area to discuss ways to restore the peatland, raise awareness on the importance of the ecosystem for natural carbon storage, all the while still seeking a solution for them to secure income.

“There’s a level of awareness of the people in the provincial government of North Kalimantan about the important role peatland in their region plays in global climate change,” Hansen said.