ILO work in Indonesia on local-resource intensive rural infrastructure started in 1993 with the management of a World Bank-financed labour-based district roads project, aiming to upgrade labour-based methods already in use in Indonesia. Focussing on four pilot districts in two provinces, the project successfully developed and introduced improved techniques, supervision and organization for labour-based construction and improvement and maintenance of local roads. The project however did not succeed in mainstreaming labour-based technology in the country's mainstream investment programmes as the political climate was not very receptive to the technology during the mid-90s.

As a result of the Asian financial crisis there has been a dramatic increase in the number of Indonesians unemployed and those living in poverty. It is estimated that unemployment will increase and that 45 million people will be unemployed by the year 2004. In 1999 around 15% of the population lived below a poverty line of 1 dollar a day and, around 66% below a poverty line of 2 dollar a day. Poverty and rural infrastructure are linked, also in Indonesia, and with the transfer of responsibilities for rural infrastructure development and maintenance to the local governments in 2001 a new opportunity has been created to introduce local resource intensive strategies for rural infrastructure development in Indonesia.