Indonesia: Domestic Politics, Strategic
Dynamics, and U.S. Interests
Bruce Vaughn
Specialist in Asian Affairs
October 27, 2010
Congressional Research Service
7-5700
www.crs.gov
RL32394
CRS Report for Congress
P
repared for Members and Committees of Congress
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Summary
With a population of 240 million, Indonesia is the largest country in Southeast Asia and the most
populous Muslim-majority nation in the world. Its size, its emerging democracy and economic
vibrancy, and its strategic position across critical sea lanes linking the Middle East with East Asia
have led many to consider it an emerging middle-tier power. The U.S. maintains close relations
with Indonesia, with considerable security, economic, and trade ties, although human rights
concerns about the Indonesian armed forces have long been a thorn in the relationship.
In the 12 years since a catastrophic economic crisis led to the fall of longtime President Suharto,
Indonesia has undergone a remarkable transformation. It has held two successful direct
Presidential elections, both of which were considered largely free and fair, and conducts dozens
of actively contested provincial and local elections each year. Its economy regularly posts growth
of better than 6% annually, although poverty remains considerable and corruption widespread.
Discussion of Indonesia has shifted from speculation about its possible breakup due to separatist
sentiments in places such as Aceh, the Malukus, West Papua, and the now independent state of
Timor Leste to admiration of its democratic transformation, its relatively strong performance in
the recent global economic crisis, its cooperation in efforts to combat terrorism, and its growing
role in regional diplomatic institutions, international efforts to combat climate change, and its
membership in the G-20.
In recent years, U.S. policy towards Indonesia has focused on cementing ties with a geopolitically
important state that can play an active role in regional diplomatic institutions, and encouraging
Indonesia to combat terrorism and effectively counter the rise of violent Islamic militancy. The
United States has also sought to promote democracy, the rule of law and human rights, and to
further American trade and investment interests in Indonesia.
The election of President Barack Obama, who spent part of his childhood in Indonesia, did much
to spur expectations in Indonesia that the U.S.-Indonesia bilateral relationship would be
enhanced. Expectations have been dampened by planned Presidential trips that were postponed in
2010, but the President plans to visit in November 2010, and is expected to sign a Comprehensive
Partnership Agreement with Indonesian President Susilo Bambang Yudhoyono (SBY). The
agreement is expected to cover a range of issues including trade and investment, food security,
science and technology, educational exchanges, and military cooperation.
Congressional concerns have included oversight of the Obama Administration’s policies towards
Indonesia, including the Comprehensive Partnership, Indonesia’s role in regional diplomacy, the
restarting of comprehensive military-military relations, and policies to encourage human rights
performance, particularly in restive West Papua.
Congressional Research Service
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Contents
Overview .................................................................................................................................... 1
Issues for Congress ..................................................................................................................... 1
Historical Background ................................................................................................................ 3
Political Dynamics ...................................................................................................................... 4
Parliamentary Elections......................................................................................................... 5
Presidential Elections ............................................................................................................ 7
The Role of the Military.............................................................................................................. 8
Autonomous and Secessionist Movements .................................................................................. 9
Timor-Leste ........................................................................................................................ 10
Aceh ................................................................................................................................... 11
West Papua ......................................................................................................................... 12
Current Impasse in West Papua ..................................................................................... 13
Background to the Present Conflict ............................................................................... 15
The Government of Indonesia and West Papua .............................................................. 16
Radical Islam and Inter-Communal Strife.................................................................................. 17
The Struggle Against Radical Islamist Extremists................................................................ 19
The Economy............................................................................................................................ 21
The Environment ...................................................................................................................... 22
Human Rights and Religious Freedom ...................................................................................... 24
The Question of Genocide in Papua..................................................................................... 25
Religious Freedom .............................................................................................................. 27
External Relations..................................................................................................................... 28
Regional Dynamics ............................................................................................................. 29
Australia ............................................................................................................................. 29
China .................................................................................................................................. 29
Malaysia ............................................................................................................................. 30
United States-Indonesian Relations ........................................................................................... 30
U.S. Geopolitical and Strategic Interests.............................................................................. 30
U.S. Assistance to Indonesia................................................................................................ 31
Security Assistance ....................................................................................................... 32
Observations ............................................................................................................................. 33
Figures
Figure 1. Map of Indonesia ....................................................................................................... 34
Tables
Table 1. Recent Indonesian Parliamentary Election Results ......................................................... 7
Table 2. U.S. Foreign Assistance to Indonesia ........................................................................... 32
Congressional Research Service
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Contacts
Author Contact Information ...................................................................................................... 35
Congressional Research Service
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Overview
With an estimated population of 240.3 million,
Indonesia at a Glance
Indonesia is the world’s most populous
Population: 240.3 million with a growth rate of 1.1%
Muslim nation and is the world’s fourth-most
Life expectancy: 70.76
populated nation overall after China, India,
Area: 1,826,440 sq. km (about three times the size of
Texas )
and the United States. Its population is
Geography: An archipelagic state of 17,000 islands,
growing by approximately three million
including some 6,000 occupied islands
people a year.1 It has extensive natural
Capital: Jakarta, 8.8 million
resources. A large percentage of world trade
Ethnic Groups: 490 ethnic groups, Javanese 45%,
transits the strategically important straits of
Sundanese 14%, Madurese 7.5%, coastal Malay 7.5%,
others 26%
Malacca that link the Indian Ocean littoral to
Languages: Bhasa Indonesia, official modified form of
the South China Sea and the larger Pacific
Malay, and local dialects including many Austronesian and
Ocean basin. Indonesia is also perceived by
Papuan languages. 13 languages have over one million
many as the geopolitical center of the
speakers
Association of Southeast Asian Nations
Literacy Rate: 90.4%
Religion: Muslim 86.1%, Protestant 5.7%, Catholic 3%,
(ASEAN), which is a key actor in the
Hindu 1.8%
geopolitical dynamics of the larger Asia-
GDP growth: 5.9% est.
Pacific region.
GDP by Sector: Agriculture 13.5%, industry 45.6%,
services 40.8%
Indonesia continues to emerge from a period
Labor force by sector: Agriculture 42.1%, industry
18.6%, services 39.3%
of authoritarian rule and is consolidating its
Per capita GDP purchasing power parity: $4,149
status as one of the world’s largest
Unemployment rate: 8.4%
democracies. Some 86% of Indonesians are
Main exports: Appliances, textiles, palm oil, rubber
Muslim, and the overwhelming majority
Destination of Exports: Japan 21.6%, Singapore 11.7%,
United States 11.,1%, China 10.1%.
subscribe to a moderate form of the religion,
Natural resources: petroleum, tin, natural gas, nickel,
giving Indonesia the potential to act as a
timber, copper, soils, coal, gold, silver
counterbalance to more extreme expressions
Sources: U.S. Department of State; CIA, The World Fact
of Islam. Despite this, radical Islamists and
Book; Economist Intelligence Unit; BBC News
terrorist cells have operated in the country.
Internal strife and social dislocation stemming
from inter-communal discord, autonomous and secessionist movements, political machinations
among elites, Islamist extremism, government corruption, and economic uncertainty have all
undermined stability in Indonesia in the past. More recently, Indonesia has been conducting
elections widely considered free and fair and building a more robust civil society. While
Indonesia’s economy suffered major setbacks during the Asian financial crisis of 1997/98, it has
weathered the recent global economic downturn relatively well.
Issues for Congress
The key challenge for the United States and Indonesia is how to build on recent progress in the
relationship and the good will felt by Indonesians towards President Obama and by American
decision-makers towards President Yudhoyono and deliver demonstrable results in developing a
comprehensive partnership between the two countries that can further shared interests. High
expectations will likely require tangible progress to be made in the near to mid-term to maintain
1 “Indonesia’s Population Increasing by 3 Million Yearly,” Xinhua News Agency, June 3, 2008.
Congressional Research Service
1
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
positive momentum in the relationship. Despite some disappointments in the past year stemming
from the postponement and then cancelation of a planned trip to Indonesia by President Obama, it
appears that both the Obama and Yudhoyono administrations are committed to taking the
relationship forward.
In 2005, the Administration of President George Bush moved to remove restrictions on
International Military and Education and Training (IMET), Foreign Military Financing (FMF),
and Foreign Military Sales (FMS) programs for Indonesia. This was viewed by many as a first
step toward normalizing the military-to-military relationship. Indonesia has been a key player in
the war against terror in Southeast Asia and an increasingly important geopolitical actor in the
Asia-Pacific region. Despite these developments, many continue to have concern over human
rights abuses in Indonesia. Other Members of Congress, however, have emphasized the progress
Indonesia has made in several areas. An example of military cooperation with Indonesia is the
Tri-border initiative that involves radar and maritime operations in the Makassar Strait to monitor
possible terrorist or pirate activity.2 Other examples include U.S. assistance to Indonesia’s new
defense university and U.S. assistance with the procurement of C-130 Hercules transport aircraft,
which, according to Defense Minister Juwono Sudarsono, will take advantage of U.S. discount
pricing and foreign military financing.3 U.S. Secretary of Defense Robert Gates announced in
Jakarta in July 2010 that the United States would resume a “measured and gradual program of
security cooperation” with Kopassus forces.4
During the Cold War, the United States was primarily concerned about communist influence in
Indonesia. After the Cold War, congressional views on Indonesia were more influenced by
ongoing concerns over alleged human rights abuses by the Indonesian National Defense Forces
(TNI). The events of 9/11 added the concern of how best to pursue the war against terror in
Southeast Asia. Some Members of Congress remain dissatisfied with progress on bringing to
justice Indonesian military personnel and police responsible for past human rights abuses in East
Timor and West Papua. The January 2006 arrest of Anthonius Wamang, who is thought to have
led an attack near the town of Timika in Papua that killed two Americans, did much to resolve
what had been an obstacle to developing the relationship. As the United States moved from the
post-Cold War world to the war against terror, human rights concerns have increasingly been
balanced against American security interests, and particularly the need to develop effective
counterterror cooperation with Indonesia to combat radical Islamic groups. Over the same period,
the human rights record of the TNI is generally perceived to have improved. There is also
increasing appreciation of Indonesia’s geopolitical position within Southeast Asia and the larger
East Asia region among American decision-makers.
Some analysts have argued that the need to obtain effective counterterror cooperation and to
secure American strategic interests in the region necessitates a working relationship with
Indonesia and its key institutions, such as the military. Other observers take the view that the
promotion of American values, such as human rights and religious freedom, should be preeminent
in guiding U.S. relations with Indonesia.
2 John Haseman and Edward Lachica, “The U.S.-Indonesia Security Relationship: The Next Steps,” U.S.-Indonesia
Society, January 2009.
3 “U.S. to Help RI in Procurement of Six Hercules,” Jurnal Nasional, June 1, 2009. “RI’s First Defense University,”
The Jakarta Post, March 12, 2009.
4 United States to Lift Ban on Kopassus,” Jakarta Globe, July 23, 2010.
Congressional Research Service
2
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Historical Background
Modern Indonesia has been shaped by the dynamic interaction of indigenous cultures with
external influences—especially the succession of influences of Hinduism, Buddhism, Islam,
Dutch colonial rule, and a powerful and nationalistic independence movement. The geographic
definition of modern Indonesia began to take shape under Dutch direct colonial rule, which began
in 1799. The Dutch East Indies were occupied by Japan during World War II. Following the
Japanese surrender in 1945, independence was declared by nationalist leader Sukarno. After a
four-year anti-colonial insurrection, the Republic of Indonesia gained its independence from the
Dutch in 1949. The Dutch retained control of the present-day territory of Papua and West Papua,
collectively known to many as West Papua, until the transition period 1963-1969.5
Indonesian independence was followed by a period of parliamentary democracy, which was
replaced in 1959 by President Sukarno’s “Guided Democracy” that lasted until 1965.6 In the late
1950s the United States provided clandestine assistance to military rebellions in outlying
provinces of Indonesia out of fear that the Communist Party of Indonesia (PKI) was gaining
control of the country.7 On September 30, 1965, the military, under General Suharto, marginalized
Sukarno. One interpretation of events is that the military stepped in to avert a communist coup.
Another is that Suharto and officers loyal to him engineered a crisis that allowed him to
consolidate power over first the army and then the state. In the aftermath, an estimated 500,000 or
more Indonesians lost their lives in riots and purges that were characterized as “anti-communist.”
President Suharto ruled Indonesia until 1998. During this 32-year period, his authoritarian “New
Order” regime provided the political stability thought necessary by his supporters for fast-paced
economic growth. Indonesia’s economy grew at an average annual rate of almost 7% from 1987
to 1997.8 Suharto’s death in January 2008 served as a point of reflection on his rule, during which
economic development and political stability came at the price of corruption and repression.9
A period of reform, or “reformasi,” followed Suharto’s fall. Suharto was succeeded by B.J.
Habibie (1998-99), Abdurrahman Wahid (1999-2001), the daughter of former President Sukarno,
Megawati Sukarnoputri (2001-2004), and Susilo Bambang Yudhoyono (2004-present). Despite
the political instability during this period, a number of key reforms designed to enhance good
governance and expand democracy were implemented. Particularly important was a 1999 law that
transferred enormous authority from the central government to provincial and district-level
government. However, by 2003, the momentum for reform appeared to be faltering.10 President
Yudhoyono is thought to have moved the reform agenda forward but only to a limited extent.
The source of legitimacy, or lack thereof, for government has changed for the Indonesian people
over time. The Dutch colonial administration was viewed as illegitimate. The Sukarno Presidency
5 Much of the background information is drawn from a comprehensive chapter by Harvey Demaine, “Indonesia:
Physical and Social Geography,” in The Far East and Australasia (Surrey: Europa Publications, 2002).
6 Michael Vatikiotis, Indonesian Politics Under Suharto: The Rise and Fall of the New Order (London: Routledge
Publishers, 1998). p. 1.
7 John Bresnan, ed. Indonesia: The Great Transition. (Lanham: Rowman and Littlefield, 2005) pp. 245-7.
8 “Background Note: Indonesia,” Department of State, Bureau of East Asian and Pacific Affairs, October 2003.
Michael Vatikiotis, Indonesian Politics Under Suharto: The Rise and Fall of the New Order (London: Routledge
Publishers, 1998). p. xviii.
9 “The Death of Suharto: Epitaph of a Crook and a Tyrant,” The Economist, January 31, 2008.
10 “Survey of Indonesian Electorate,” Asia Foundation, December 9, 2003.
Congressional Research Service
3
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
sought to base its rule on moral concepts but it did not provide sufficient economic development.
This was subsequently provided by President Suharto until 1997, when the Asian financial crisis
undermined his ability to do so. At that point, with economic growth declining, Indonesians were
no longer prepared to accept what was increasingly viewed as a corrupt and authoritarian regime.
This brought on the era of democratic reform whose energy, prior to 2004, had appeared to be
dissipating before fully completing its goal of instituting representative government. Many
analysts believe Indonesia’s next challenge is to build government institutions that are effective
and responsive, so as to consolidate the legitimacy of democratic government.
Political Dynamics
Indonesia has made significant progress toward institutionalizing its democracy and more firmly
establishing civil society.11 Since the Suharto era, which ended abruptly amid mass protests in
1998, civil society has expanded, and a vigorous and open media has emerged. In addition to the
direct election of the president, the military no longer has seats in parliament and the police have
been separated from the military. Indonesia’s parliamentary elections in April 2004, and the
Presidential elections of July and September 2004, were deemed by international observers to be
free and fair, and they did much to instill confidence in Indonesia’s democratic process. The
parliamentary and presidential elections of 2009 further consolidated the democratic process in
Indonesia.12
Indonesia’s national legislative structure consists of three separate bodies. First is a House of
Representatives (DPR) of 550 members elected from party lists in multi-seat districts. The DPR
has the primary role in passing laws. Second is a 132-seat Regional Representative Council
(DPD) whose members are elected directly. Third is the People’s Consultative Assembly (MPR),
which is composed of members of both the DPR and the DPD. It is responsible for passing
constitutional amendments and conducting presidential impeachments. Decentralization in recent
years has placed increased importance on government at the local level.
Although President Yudhoyono came to his second term in office in 2009 with a strong mandate,
that support has begun to erode. Despite strong economic indicators, Yudhoyono’s approval rating
dropped from 85% after his reelection to 66% by October 2010.13 Some have attributed this
decline to controversy about a government bailout of Bank Century, a mid-sized Indonesian
Bank, and the departure of reformist Finance Minister Sri Mulyani Indrawati, which damaged
SBY’s reformist credentials with voters.14 Observers believe that Aburizal Bakrie, a tycoon who
heads Golkar, a key coalition partner to SBY’s democratic party, benefits politically from
Indrawati’s departure and enhances his chances to position himself for a possible presidential run
in 2014.15
11 John McBeth, “The Betrayal of Indonesia,” Far Eastern Economic Review, June 26, 2003.
12 Damien Kingsbury, “Indonesia: 2007,” Asian Survey, February 2008.
13 “Yudhoyono Marks First Year of 2nd Term in Office,” Channel News Asia, October 19, 2010.
14 “One Year ON the Thrill is Gone,” The Jakarta Post, October 20, 2010.
15 “Indonesia’s Bakrie Grabs New Post,” Asia Sentinel, May 12, 2010.
Congressional Research Service
4
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Parliamentary Elections
On April 9, 2009, Indonesians went to the polls in the third parliamentary election held since
Indonesia’s transition from the authoritarian New Order era of former President Suharto. The
2009 parliamentary elections followed elections held in 1999 and 2004 and proved a robust
endorsement of President Susilo Bambang Yudhoyono (SBY) and his Democrat Party, and a
strong and increasing preference for secular-nationalist parties over Islamic or Islamist parties.16
The President’s Democratic Party, Partai Demokrat (PD), is now the single largest political party
in Indonesia. The Indonesian Parliament is elected separately from the executive. In 2004, 84% of
the 148 million registered voters cast votes. This was a lower percentage turn out from the 93% of
the 118 million voters that cast ballots in the 1999 parliamentary elections.17
Several factors appear to have contributed to the Democrat Party’s victory in the April 2009
parliamentary elections. Declining food and fuel prices as well as programs for the poor improved
Yudhoyono’s and his Party’s standing.18 According to Marcus Mietzner of the Lowy Institute in
Sydney, Australia: “It was the introduction of massive cash programs for the poor that triggered
Yudhoyono’s meteoric rise from electoral underdog to almost unassailable front runner.... The
government spent approximately $2 billion on compensation payments.”19
A related factor in the election appears to have been shifting Indonesian perceptions of the
economy from 2005 to 2009. More Indonesians generally felt that the national economic
condition was worsening, but by early 2009, this negative perception changed as more
Indonesians came to believe that the national economic condition was now better than the
previous year. In February 2009, 37% believed that the economy was better while 31% believed it
was worse.20
While his popularity and reformist credentials have dropped in public perceptions over the last
year, 80% of Indonesians polled in 2009 believed that SBY was good, or very good, in fighting
corruption. Indonesian voters also believed that the Democrat Party was the least corrupt of the
political parties by an increasing margin in the lead-up to the April 2009 parliamentary election.
That said, Indonesians believe that the parliament and the judiciary are the two most corrupt
institutions in Indonesia.21 Indonesians have a consistently negative perception of the legislative
branch.22
The apparent lack of resonance of Islamist messages with Indonesian voters appears to have been
a key factor in the parliamentary election results.23 Vote tallies for Islamic parties declined from
16 Islamic parties are viewed here as those inspired by Islamic values but that would not seek to use the state to
explicitly codify these values into law that would apply to all Indonesians while Islamists would be more likely to do
so. Militant Islamists are those that would use violence to pursue their agenda.
17 “Election Guide Indonesia,” IFES, http://www.electionguide.org/country.php?ID=102.
18 Country Report Indonesia, Economist Intelligence Unit, May 2009.
19 Marcus Mietzner, ”Indonesia’s 2009 Elections: Populism, Dynasties and the Consolidation of the Party System,”
Lowy Institute for International Affairs, May 2009.
20 Lembaga Survei Indonesia, (Saiful Mujani/William Liddle) as referenced in presentation viewgraphs by Marcus
Mietzner, Lowy Institute, Australia. Marcus Mietzner, ”Indonesia’s 2009 Elections: Populism, Dynasties and the
Consolidation of the Party System,” Lowy Institute for International Affairs, May 2009.
21 “Parliament and the Judiciary the Most Corrupt Institutions,” Media Indonesia, June 4, 2009.
22 “Indonesia,” National Democratic Institute, http://www.ndi.org/content/indonesia.
23 Lembaga Survei Indonesia, (Saiful Mujani/William Liddle) as referenced in presentation viewgraphs by Marcus
(continued...)
Congressional Research Service
5
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
38.1% of the vote in the 2004 election to 27.8% of the vote in 2009. Indonesian Islamic parties
received 44% of the vote in the 1955 election and 37.59% in 1999.24 Some have cautioned that
the fortunes of the Prosperous Justice Party (PKS), the United Development Party (PPP), the
National Mandate Party (PAN), the National Awakening Party (PKB), and other Islamic or
Islamist parties that did not make the representative threshold of 2.5% had stable or declining
performance more because of internal divisions and political stagnation than as a result of a major
shift in voter attitudes.25 Others also point to the inability of Islamic parties to “translate
ideological identity into concrete programs.”26
A politically significant outcome of the parliamentary election is that the Democrat Party attained
sufficient votes and seats to be allowed to nominate its own presidential candidate. Indonesian
election law requires parties to attain 20% of the seats in the 560 Member House of People’s
Representatives (DPR) or 25% of the national vote to be able to nominate a presidential
candidate. The Democrats’ strong performance in the parliamentary election, by nearly tripling
their vote from their 2004 electoral performance and crossing the 20% nomination threshold with
20.9% of the vote, meant that President Yudhoyono was in a stronger position on the issue of
coalition partners and the selection of his vice presidential running mate.
The Indonesian elections in 2009 led some to conclude that conventional wisdom on Indonesia
appears to have overestimated the importance of religion, and civil-military relations. It now
appears to some analysts that religion and civil-military issues are not as salient as they once were
in Indonesian politics.27 Although political stability is enhanced by the decline of divisive issues
in the political milieu, the apparent move toward personality politics may not be stabilizing in the
long run. In the view of many, the Democrat Party lacks structure or strong broad-based
ideological foundations and is driven by its members’ support for Yudhoyono as an individual.
(...continued)
Mietzner, Lowy Institute, Australia.
24 “Indonesian Islamic Parties in Decline,” States News Service, May 12, 2009. Bahtiar Effendi, “Islamic Parties Have
Long Been at an Impasse,” The Jakarta Post, April 17, 2009.
25 Marcus Mietzner, ”Indonesia’s 2009 Elections: Populism, Dynasties and the Consolidation of the Party System,”
Lowy Institute for International Affairs, May 2009.
26 Bahtiar Effendy, “Insight: Islamic parties Have Long Been at an Impasse,” Jakarta Post, April 17, 2009.
27 William Liddle, “Indonesia’s July 9 Presidential Elections,” USINDO Presentation, June 3, 2009.
Congressional Research Service
6
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Table 1. Recent Indonesian Parliamentary Election Results
% votes
Seats
% votes
Seats
% votes
Seats
Party
2009
2009
2004
2004
1999
1999
Democrat
20.9 148 7.45 57
Party
Golkar 14.5
108
21.58
128
22.44
120
PDI-P 14.0
93
18.53
109
33.74
154
PKS 7.9
59
7.34
45
1.4
14
PAN 6.0
42
6.44
52
7.12
35
PPP 5.3
39
8.15
58
10.71
39
PKB 4.9
26
10.57
52
12.61
51
Gerindra 4.5
30
Hanura 3.8
15
Source: IFES, http://www.electionguide.org. The Economist Intelligence Unit, May 2009. Syafiq Hasyim,
“Blending Dakwa and Politics: The Case of PKS Justice Prosperous Party,” in The Rise of Religion-Based Political
movements.
Notes: Data gaps are explained by the parties in question not running in the election year indicated.
Presidential Elections
The Indonesian president is directly elected in a separate presidential election that is held after the
parliamentary elections. Under Indonesian law presidential candidates run with their choice of
vice presidential candidates. The presidential election of July 8, 2009, gave President Yudhoyono
60% of the vote while Megawati Sukarnoputri of PDI-P received 26% of the vote and Jusuf Kalla
of Golkar received 12%.28 If one candidate for president in Indonesia receives over 50% of the
vote in the first round that candidate becomes president. If no single candidate receives over 50%
then a subsequent runoff election is held between the two leading candidates. No second round
was necessary in the 2009 presidential election.
There were three pairs of presidential and vice presidential candidates in the 2009 presidential
election. President Yudhoyono, who has been described as a moderate, cautious, and intelligent
man of common sense, picked Boediono as his vice presidential running mate.29 Some have
observed that Yudhoyono chose Boediono for his abilities rather than for his political standing.
Boediono was Governor of Bank Indonesia, the central bank, and did not bring with him a vote
block in parliament. That said, he has a doctorate from the Wharton School at the University of
Pennsylvania and was Coordinating Minister for Economic Affairs before taking his post at the
Central Bank. He is credited with devising the government initiative to disperse cash to
Indonesia’s poorest 19 million families and is thought to be a key architect of Yudhoyono’s
economic policies.30
28 Country Report Indonesia,” The Economist Intelligence Unit, July 2009.
29 Richard Lloyd Parry, “Dictator’s Former Henchmen Offers Winning Smile to Voters,” The Times, April 9, 2009.
30 “Indonesia’s Yudhoyono Confirms Boediono as YP Candidate,” Channel News Asia, May 15, 2009.
Congressional Research Service
7
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Yudhoyono’s former vice president from the Golkar Party, Jusuf Kalla, ran against Yudhoyono
with former General Wiranto of the Hanura Party. Wiranto was accused of human rights abuses in
East Timor by a U.N.-backed Special Tribunal.31 Former President Megawati Sukarnoputri of
PDI-P ran for president with vice presidential running mate Probowo Subianto. Probowo is leader
of the political party Gerindra, a former Kopassus [Special Forces] Commander, and the former
son-in-law to former President Suharto. Probowo’s critics believe he was responsible for violence
towards anti-Suharto intellectuals and students, as well as against the ethnic Chinese community
in Jakarta, during Indonesia’s transition from Suhato’s authoritarian New Order to reformasi and
more open government in 1998.32
The outcome of the presidential election of 2009, with its strong mandate to return President
Yudhoyono to the office of the presidency, is important for several reasons. The elections marked
the continued development of Indonesia’s democracy and civil society and move away from past
authoritarian government. Indonesian voters continued to prefer national, secular, and democratic
leaders who are likely to continue to pursue reformasi policies. The vote was also an endorsement
of SBY’s handling of the economy under his first watch. This will likely make further economic
development and investment a priority in SBY’s second term.33
The Role of the Military
The Indonesian National Defense Force (TNI) is generally regarded as the strongest institution in
Indonesia. Its origins date to the struggle for independence. The TNI traditionally has been
internally focused, playing a key role in Indonesian politics and preserving the territorial integrity
of the nation—largely from internal threats—rather than focusing on external security concerns.
Its strong tradition of secular nationalism has acted to help integrate the nation. The key elements
of the military in Indonesia are the Army Strategic Reserve Command, the Army Special Forces
Command, other special forces, and the Military Regional Commands. There are also Air Force
and Naval commands. While the military now has a less formal role in the politics of the nation
than it had in the Suharto era, it remains a key actor behind the scenes.34 Some observers are
concerned about its indirect influence over politics. The Indonesian military has attracted
negative attention through its past involvement with human rights abuses in East Timor, Aceh,
Papua, and Maluku, although current problems appear largely limited to Papua and West Papua.
During the initial period of reform, the TNI officially abandoned the doctrine of dwifungsi, or
dual function, which gave it an official role in the politics of the nation.35 Appointed members to
the legislative bodies from the military were removed, while the police were separated from the
TNI. Efforts were also begun to more firmly establish civilian control of the armed forces.
Supporters of the reform agenda in Indonesia would like to see additional measures taken,
including reform of the army’s territorial structure, a full withdrawal of the military from business
31 Philip Bowring, “Indonesia’s Prospects,” International Herald Tribune, May 20, 2009.
32 Adam Gartrell, “Poll fury hits Riot Generals,” The Courier-Mail, May 13, 2009.
33 “Indonesia Politics: Yudhoyono Reelected,” The Economist Intelligence Unit, July 9, 2009.
34 Rizal Sukma, “The Military and Politics in Post-Suharto Indonesia,” in Thang Nguyen and Frank Jurgen Richter,
eds., Indonesia Matters: Diversity, Unity, and Stability in Fragile Times (Singapore: Times Media Private Ltd. 2003).
35 For a detailed analysis of earlier role of the military in politics, see Harold Crouch, The Army and Politics in
Indonesia (Ithaca: Cornell University Press, 1978).
Congressional Research Service
8
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
activities, and improving the military’s sensitivity to human rights.36 The TNI budget is thought to
be to a large extent self-generated. This part of the TNI budget is largely outside governmental
control.37 The TNI will likely continue to play a key role in the evolution of the Indonesian polity
in the years ahead. It will also likely seek to preserve its prominent place in Indonesian society.38
While slowed, there are still signs that the reform process continues in Indonesia. Deputy
Assistant Secretary of Defense Robert Scher has stated that the TNI “continues to shift its mission
away from internal security.”39 There is increased focus on more traditional and professional roles
for the military, such as guaranteeing sovereignty and external security, and relatively less focus
on the political role of the TNI within Indonesia. Proponents of TNI reform have called for
developing military capability and developing responsibility of military actions.40 Admiral Agus
Suhartono is the current head of the TNI. The Indonesian parliament has called on the new TNI
chief to complete the process of internal reform of the TNI, maintain the Army’s neutrality in
politics and strengthen security in border areas.41 TNI Commander Suhartono has stated that he
will carry on the effort to terminate the TNI’s role in business.42
One proposal for how Indonesia could address some of its military budget shortfall involves a
continuation of the reform process. Some have put forward the idea that by dismantling the
territorial command structure, which is a legacy of the former dwifungsi role of the New Order
military, Indonesia could save money that could be redirected to the air force or navy which are
focused on more conventional military roles and are arguably underfunded given the vast sea and
air space encompassed by the Indonesian archipelago.43
Autonomous and Secessionist Movements
Center-periphery tensions between the dominant Javanese culture and minority groups in outlying
regions have been sources of political instability and strife for the Indonesian state. Indonesia has
in recent years adapted its approach to such strife and done much to alleviate autonomous or
secessionist tensions. This relatively more moderate approach has reached accommodation where
other efforts to quell Indonesia’s centrifugal tendencies have failed.
The primary security threats to Indonesia are generally thought to come from within. The political
center of the Indonesian archipelago is located in Jakarta on Java, the densely populated island
36 Angel Rabasa and John Haseman, The Military and Democracy in Indonesia: Challenges, Politics, and Power (Santa
Monica: RAND Corp. 2002).
37 Col. John Haseman, William Liddle and Salim Said, “The Evolving Role of the TNI,” USINDO Security Workshop,
October 16, 2003.
38 Angel Rabasa and John Haseman, The Military and Democracy in Indonesia: Challenges, Politics, and Power (Santa
Monica: RAND Corp. 2002).
39 “Statement of Robert Scher Deputy Assistant Secretary of Defense Asian and Pacific Affairs, OSD,” House Foreign
Affairs Subcommittee on Asia, the Pacific, and the Global Environment, September 22, 2010.
40 “A Professional Track for TNI and Yudhoyono,” The Jakarta Post, October 5, 2010.
41 Maria Patrikainen, “Indonesian Parliament Demands New Military Commander to Continue Army Reform,” Global
Insight, September 27, 2010.
42 “New TNI Commander Vows to Close Military Businesses,” The Jakarta Post, September 29, 2010.
43 Endy Bayuni, “Not Enough Money for the Military? Try Sending them ‘Back to Barracks,’” The Jakarta Post, May
27, 2009.
Congressional Research Service
9
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
where 60% of Indonesia’s population lives. Traditionally, power has extended from Java out to
the outlying areas of Indonesia. This has been true both under Dutch rule, when Jakarta was
known as Batavia, and with the modern Indonesian state. Throughout its history there has been
resistance in peripheral areas to this centralized control. This manifested itself in the
predominantly Catholic former Indonesian province of East Timor, which is now an independent
state, as well as in the far west of Indonesia, in Aceh, and in the far eastern part of the nation, in
Papua and West Papua. Each of these regions has strong ethnic, cultural, and/or religious
identities very different from those of Java.
Such diversity has led to debate about whether Indonesia is an organic state or an artificial
creation of Dutch colonial rule. Analysis of early Indonesian history reveals a level of integration
in terms of economics and trade, if not extensive political unity. While early indigenous empires
were precursors of the Indonesian state, political unity is generally considered to have been a
product of Dutch colonial rule, including a series of lengthy wars to subdue outlying islands and
independent political units. It has been suggested that a key lesson of Indonesian history is that
“unifying the archipelago administratively can only be done by the use of force.”44 Forces of
economic integration, or the creation of a national identity stemming from the nationalist
movement which started in Java in 1908,45 could be viewed as other integrative forces.
Timor-Leste46
The Portuguese, whose influence in Timor-Leste47 dates to the 1600s, gave up control of the
island in 1975. With the Portuguese departure, three main parties emerged. Of these, Frente
Revolucionaria do Timor Leste Independente (Fretelin), a leftist leaning group, soon emerged as
the dominant party. On December 7, 1975, Indonesia invaded East Timor with the then tacit
compliance of the United States and Australia.48 Indonesia, Australia, and the United States are
thought to have been concerned that East Timor would turn into another Soviet satellite state
similar to Cuba. A third of the population of East Timor is thought to have died as a result of
fighting or war-induced famine during the subsequent guerilla war fought by Fretelin against
Indonesia’s occupation.49
On August 30, 1999, East Timorese voted overwhelmingly to become an independent nation.
98.6% of those registered to vote in the referendum voted, with 78.5% rejecting integration with
Indonesia. In the wake of the vote, pro-integrationist militias attacked pro-independence East
Timorese and destroyed much of East Timor’s infrastructure. More than 7,000 East Timorese
were killed and another 300,000, out of a total population of 850,000, were displaced, many to
West Timor. Hard-line elements of TNI formed pro-integrationist militias in East Timor. These
44 Merle Ricklefs, “The Future of Indonesia,” History Today, December 1, 2003.
45 Jusuf Wanandi, “Indonesia: A Failed State?” The Washington Quarterly, Summer, 2002, p. 135.
46 Timor-Leste is also commonly known as East Timor.
47 The nation’s formal name is Timor-Leste, but it is also widely known as East Timor.
48 “Ford and Kissinger Gave Green Light to Indonesia’s Invasion of East Timor, 1975,” The National Security
Archives, December 6, 2001.
49 Michael Mally, “Regions: Centralization and Resistance,” in Donald Emmerson ed. Indonesia Beyond Suharto:
Polity, Economy, Society, Transition (Armonk: M.E. Sharp, 1999). p. 98.
Congressional Research Service
10
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
groups sought to intimidate the East Timorese into voting to remain integrated with Indonesia
under an autonomy package being offered by then President Habibie.50
It is thought that the TNI had two key reasons for trying to forestall an independent East Timor.
First, there was an attachment to the territory after having fought to keep it as a part of Indonesia.
Second, was the fear that East Timorese independence would act as a catalyst for further
secession in Aceh and Papua. The subsequent devastation of East Timor may have been meant as
a warning to others who might seek to follow its secessionist example. Some believe that TNI
involvement in the violence stemmed largely from local “rogue” elements. Others believe that it
was orchestrated higher up in the military command structure. 51
East Timor gained independence in 2002. Since that time, Indonesia and East Timor have worked
to develop good relations. The Joint Commission of Truth and Friendship was established to deal
with past crimes.52 A 2,500-page report issued in early 2006 by the East Timorese Commission
for Reception, Truth and Reconciliation (CAVR), which was given to United Nations General
Secretary, found Indonesia responsible for abuses of East Timorese during its period of rule over
East Timor. The report reportedly found that up to 180,000 East Timorese died as a result of
Indonesian rule.53 This created tension in the bilateral relationship between Indonesia and East
Timor and dilemmas for the U.N. Nevertheless, then East Timorese President Xanana Gusmao
and President Yudhoyono reaffirmed their commitment to continue to work to resolve differences
between the two countries.54 More recently, the new President Ramos-Horta called on the people
of Timor-Leste to accept that Indonesians who committed human rights abuses in East Timor
would never be brought to justice so that East Timor could move forward.55
The United Nations tribunal, which included the Serious Crimes Investigation Unit, shut down in
May 2005. During its six-year operation, the tribunal convicted some East Timorese militia
members for their role in the atrocities of 1999, but was unable to extradite any indictees from
Indonesia. A parallel Indonesian investigation ended in acquittals for all Indonesians. A 2005
U.N. Commission of Experts found the Jakarta trials for crimes committed in 1999 to be
“manifestly inadequate.”56
Aceh
Aceh is located at the extreme northwestern tip of the Indonesian archipelago on the island of
Sumatra. The 4.4 million Acehenese have strong Muslim beliefs as well as an independent ethnic
identity. Many Acehenese have in the past viewed Indonesia as an artificial construct that is no
more than “a Javanese colonial empire enslaving the different peoples of the archipelago whose
only common denominator was that they all had been colonized by the Dutch.”57
50 John Haseman, “Indonesia,” in David Wiencek, ed. Asian Security Handbook 2000 (Armonk: M.E. Sharpe
Publishers, 2000).
51 Emerson, p. 356.
52 “Indonesia: International Relations,” The Economist Intelligence Unit, May 17, 2005.
53 Sian Powell, “Xanana and SBY Let Shame File Slide,” The Australian, February 18, 2006.
54 Rob Taylor and Olivia Rondonuwu, “Gusmao, Yudhoyono Meet in Bali,” AAP Bulletins, February 17, 2006.
55 “East Timor President Sees Bright Future if Country Forgets Past,” Agence France Presse, July 19, 2008.
56 Human Rights Watch, “East Timor,” at http://www.hrw.org.
57 Kirsten Schulze, The Free Aceh Movement (GAM): Anatomy of a Separatist Movement (Washington: East West
(continued...)
Congressional Research Service
11
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
The Acehenese fought the Portuguese in the 1520s as well as the Dutch in later years.58 The
Dutch Aceh War lasted from 1873 to 1913; making it possibly the longest continuous colonial
war in history. As a result of their resistance and independence, Aceh was one of the last areas to
come under Dutch control. Its struggle for independence from Indonesia was once again taken up
by the group Gerakan Aceh Merdeka (GAM) until a peace agreement was reached in the wake of
the December 2004 tsunami which killed over 130,000 people and devastated much of Aceh. The
peace agreement signed by GAM and the government of Indonesia in Helsinki in August of 2005
brought an end to a conflict that claimed an estimated 15,000 lives. Under the agreement, partial
autonomy was granted to Aceh as was the right to retain 70% of the provinces considerable oil
and gas revenue.
The recently resolved struggle dates to 1976. In the late 1980s, many of GAM’s fighters received
training in Libya. GAM then began to reemerge in Aceh. This triggered suppression by the TNI
from which GAM eventually rebounded. Former President Megawati then called on the military
to once again suppress the Free Aceh Movement. This was the largest military operation for the
TNI since East Timor. The decision to take a hard-line, nationalist stance on Aceh was popular at
the time among Indonesian voters outside of Aceh.59
Under the leadership of President Yudhoyono, Indonesia leveraged the opportunity presented by
the 2004 tsunami and achieved a peace settlement where previous peace efforts had come
unraveled. Under the agreement, the Free Aceh Movement (GAM) disarmed in December 2005
as the Indonesian Military TNI dramatically reduced its presence in Aceh.
West Papua60
The ongoing conflict in West Papua between the indigenous Melanesian people of the region and
the security forces of the central government of Indonesia, which is overwhelmingly ethnically
Malay, presents Congressional decision-makers with a difficult situation where human rights and
geopolitical interest collide. On the one hand, the historical background and ongoing situation
indicates that the indigenous people of West Papua have suffered great injustices and deprivation
at the hand of Indonesia, which some have described as genocide. (See the “Human Rights and
Religious Freedom” section for more discussion of this point.) West Papua is ethnically, culturally
and linguistically distinct from the rest of Indonesia. On the other hand, the United States has a
strong interest in reaching out to the Islamic world, and is working with a now democratic
Indonesia as a partner in the struggle against Islamist militancy and developing a Comprehensive
Partnership with Indonesia that can further U.S. geopolitical interests.
(...continued)
Center, 2004).
58 S. Wiuryono, “The Aceh Conflict: The Long Road to Peace,” Indonesian Quarterly, 3rd Quarter, 2003.
59 John Haseman, “Indonesia: A Difficult Transition to Democracy,” in David Wiencek and Ted Carpenter eds. Asian
Security Handbook, 3rd ed. Terrorism and the New Security Environment (Armonk: M.E. Sharpe, Inc., 2004).
60 West Papua is both a term used by advocates for the entire region and a term used by the Government of Indonesia
for one of two provinces. The region, formerly known as West Irian or Irian Jaya, refers to the western half of the
island of New Guinea and encompasses the two Indonesian provinces of West Papua and Papua. West Papua and
Papua have an area of approximately 422,000 square kilometers, which represents about 21% of the land mass, and a
little over 1% of the population of Indonesia. Papua has a long land border with Papua New Guinea to the east.
Congressional Research Service
12
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Separatist sentiment and human rights concerns in West Papua are important not only in their own
right but also because they have the potential to limit the growing partnership between the U.S.
and Indonesia. It appears that various Papuan separatist groups have come to the view that
peaceful means will not lead to a referendum on Indonesian rule of Papua and West Papua and
that they must internationalize the conflict to affect change. Some also believe that violence that
would provoke a harsh response by Indonesian security forces is the best way to gain
international attention to their cause. This is apparently inspired at least in part from the
experience of Timor-Leste.61
Central to the conflict in Papua is its vast natural wealth, most of which stems from resource
extraction industry, particularly mining, logging and off-shore natural gas drilling. Fisheries
resources are another potentially valuable resource. Economic activity in built-up areas is
dominated by migrants from elsewhere in Indonesia. Papua and West Papua are two of
Indonesia’s poorest provinces despite their extensive natural resource wealth. Under the Special
Autonomy Law for Papua of 2001, 70% of oil and gas royalties and 80% of mining, forestry and
fisheries royalties are supposed to go to the province. The Grasberg Mine operated by Freeport
Indonesia, a subsidiary of Louisiana-based Freeport McMoran, is the world’s largest gold mine
and is one of the largest copper mines in the world. In the highlands above Timika, Papua it
accounts for 90% of the province’s exports and 50% of the province’s GDP.62 The Freeport mine,
which was first exploited in the 1960s, has been subject to enormous controversy over the
treatment of indigenous people displaced or affected by the enormous project.
Social indicators for West Papua are not good. Papuans have extremely high HIV/AIDS rates. It
is reported that residents of West Papua account for 40% of documented cases in Indonesia and
that 74% of cases in West Papua are indigenous Papuans.63 Infant mortality is also extremely high
in Papua and West Papua at two to six times higher the Indonesian national average.64 An
estimated 36% of the people do not have access to health facilities.65 Poverty in Papua and West
Papua is reportedly twice the national average.66
Current Impasse in West Papua
A March 2010 International Crisis Group (ICG) report has highlighted three key components that
in its view need to be addressed by the government of Indonesia with credible Papuan leaders in
order for the current impasse to be overcome. They are as follows:
• Explore how political autonomy can be expanded
• Strengthen affirmative action policies for Papuans across sectors
• Substantively address Papuan fears of in-migration of non-Papuans from
elsewhere in Indonesia
61 “Radicalisation and Dialogue in Papua,” International Crisis Group, March 11, 2010.
62 Chris Ballard and Glenn Banks, “Between a Rock and a Hard Place: Corporate Strategy at the Freeport Mine in
Papua, 2001-2006,” in Budy Resosudarmo and Frank Jotzo eds. Working with Nature Against Poverty: Development
Resources and the Environment (Canberra: The Indonesia Project, Australian National University, 2006).
63 “News From the Field,” Caritas Australia, http://www.caritas.org.
64 “Oil and Politics Prove a Fatal Mix for the people of West Papua,” The Age, December 31, 2009.
65 “Govt Ignores Human Rights in Papua,” The Jakarta Post, January 20, 2010.
66 Philippe Pataud Celerier, “Indonesian Democracy Stops in Papua,” Le Monde Diplomatique, June 1, 2010.
Congressional Research Service
13
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
The ICG report states that the current impasse is unlikely to be broken and that “increased
radicalization is likely” if these key issues are not addressed.67
Migration by non-Melanesian Indonesians from elsewhere in the nation appears to be a critical
part of the mounting tensions. By some accounts, Melanesian Papuans will be in the minority in
their homeland by 2015.68 Other accounts suggest they may already be in the minority.69
Preliminary data from the 2010 census indicates a huge increase in population in the states of
Papua and West Papua, to 2.9 million and 761,000 respectively from a combined total of 2.2
million people in the 2002 census. Much of the increase is thought to be due to massive migration
to the region.70
Some research has indicated that the process of modernization and integration pursued by the
government of Indonesia that led to a great influx of non-Papuan trans-migrants into West Papua
and Papua has led to the displacement, dislocation, alienation, and marginalization of local
Papuans that has in turn fueled Papuan’s resentment and demands for autonomy or independence.
This ongoing dynamic has “… given rise to a collective sense among Papuans that they are facing
a serious threat to their demographic and cultural survival.”71
There is reportedly a widespread view among Papuans that Special Autonomy as currently
administered has failed. In June 2010, the Papuan People’s Assembly voted to reject special
autonomy status that was introduced in 2001 asserting it was failing indigenous Papuans. In
Jayapura, Papua’s capital, a protest group of an estimated 1,000 Papuans marched to symbolically
hand back autonomy to the central government. Some protestors called for a referendum and
independence and urged a rejection of special autonomy. Papuans feel the autonomy funds are
going to non-Melanesians through corruption and the creation of new bureaucracies when the
funds should be used for community level health, education, or job creation.72 By some estimates
95% of autonomy funds are spent outside the two provinces.73 There are also calls for
international mediation of the dispute.74 The Free Papua Movement (OPM) has reportedly stated
that it would welcome dialogue with Jakarta as long as an international organization, preferably
the United Nations, acted as mediator.75 At the international level, Vanuatu, a Melanesian Pacific
island nation, has stated that it will raise the issue of West Papua at the United Nations.76
67 “Indonesia: The Deepening Impasse in Papua,” International Crisis Group, No. 108, August 3, 2010.
68 Philippe Pataud Celerier, “Indonesian Democracy Stops in Papua,” Le Monde Diplomatique, June 1, 2010.
69 Timo Kivimaki, “Initiating a Peace Process in Papua,” Policy Studies 25, East-West Center, Washington 2006.
70 “Population Growth Good for Papua,” The Jakarta Post, August 23, 2010.
71 Rodd McGibbon, “Plural Society in Peril: Migration, Economic Change, and the Papua Conflict,” East West Center
–Washington, 2004.
72 Tom Allard, “Autonomy Failing in West Papua,” The Age, September 4, 2010.
73 “Prejudice and Distrust Leave Papua Roadmap in Limbo,” The Jakarta Post, July 29, 2010.
74 “Papuans Rally for Independence From Indonesia,” Agence France Presse, June 18, 2010.
75 Evi Mariani, “OPM Military Wing Calls for UN Mediated Dialogue,” The Jakarta Post, March 15, 2010.
76 “Pacific Islands Forum,” Scoop, August 3, 2010.
Congressional Research Service
14
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Background to the Present Conflict
Papuans are a Melanesian people like the people of Papua New Guinea (PNG) which is situated
on the eastern half of the island of New Guinea.77 The indigenous Melanesian people78 of Papua
have a culture dating back, by some estimates, 40,000 years. This background differs significantly
from the Malay character of the rest of the Indonesian archipelago. The Spanish were the first
Europeans to discover the islands that make up present-day Indonesia, in 1546. The Dutch laid
claim to Papua in 1828, and by 1910 they had an agreement with Britain and Germany (who
controlled the southeast and northeastern parts of New Guinea, respectively) which recognized
Dutch control over the western half of New Guinea. Like Indonesia, Papua was a Dutch colonial
possession. Unlike Indonesia, it did not become a part of newly independent Indonesia at the time
of Indonesia’s independence in 1949. The Dutch argued that its ethnic and cultural difference
justified Dutch control until a later date. Under former President Sukarno, Indonesia began
mounting military pressure on Dutch West Papua in 1961.
As outlined in a report by the Council on Foreign Relations, in 1962 the United States pressured
the Dutch to turn over control of West Papua to the United Nations. Under the U.S.-brokered New
York Agreement of 1962, Indonesia was to “make arrangements with the assistance and
participation of the United Nations” to give Papuans an opportunity to determine whether they
wished to become part of Indonesia or not. Indonesia assumed control over Papua in 1963. In the
“Act of Free Choice,” carried out in 1969, selected delegates decided to join Indonesia.79
The Act of Free Choice is generally not considered to have been representative of the will of most
Papuans. A broad-based referendum on Indonesian control over West Papua was not held.
Instead, a selected group of 1,025 local officials voted in favor of merging with Indonesia. As a
result, the U.N. is generally considered to have failed in its mission to give the people of Papua an
opportunity for self determination.80 To some, “while Western colonial policy was coming to an
end—a new chapter of Asiatic colonial policy was opening.”81 The pro-independence Free Papua
Movement emerged as these events were unfolding. Human rights advocate groups estimate that
100,000 Papuans have died as the result of Indonesian control in Papua due to military action and
population displacement, though others have challenged the scale of this figure.82
Declassified documents released in July 2004 indicate that the United States supported
Indonesia’s take over of Papua in the lead up to the 1969 Act of Free Choice even as it was
understood that such a move was likely unpopular with Papuans. The documents reportedly
indicate that the United States estimated that between 85% and 90% of Papuans were opposed to
Indonesian rule and that as a result the Indonesians were incapable of winning an open
referendum at the time of Papua’s transition from Dutch colonial rule. Such steps were evidently
considered necessary to maintain the support of Suharto’s Indonesia during the Cold War. A
similar view was taken towards Timor-Leste.83
77 “West Papua’s Cultural Identity,” BBC News, http://www.bbc.co.uk/worldservice.
78 Other Melanesian states include Papua New Guinea, Vanuatu, The Solomon Islands, New Caledonia and Fiji.
79 Council on Foreign Relations, Indonesia Commission: Peace and Progress in Papua, New York, 2003, p. 25.
80 John Saltford, The United Nations and the Indonesian Take Over of West Papua (London: Routledge, 2003).
81 Herb Thompson’s review of Saltford’s work in the Journal of Contemporary Asia, Vol. 34, No. 1, 2004.
82 Don McFeteridge, “Indonesia and Papua - A View From the Birds Head,” September 9, 2005, United States -
Indonesia Society, Washington.
83 National Security Archives, “Indonesia’s 1969 Takeover of West Papua Not by “Free Choice”: Secret Files Show
(continued...)
Congressional Research Service
15
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
The Government of Indonesia and West Papua
President Yudhoyono has ruled out independence for Papua but has at times appeared open to
some degree of autonomy for the province. In August 2010, Yudhoyono called for an audit of
Special Autonomy programs for Papua and West Papua.84 Yudhoyono is opposed to the
internationalization of the conflict and views it as an internal affair for Indonesia.85 In 2005, the
year Indonesia concluded a peace-and-regional-autonomy agreement with separatist groups in the
province of Aceh, then-Communications and Information Minister Sofyan Djalil, a key
government player in the deal, stated before a working group of the DPD, or Regional
Representatives Council, that the government of Indonesia viewed Papua as a different situation
from Aceh and as such would not involve the international community in the settlement of the
dispute there.86 President Yudhoyono has stated that “the government wishes to solve the issue in
Papua in a peaceful, just, and dignified manner by emphasizing dialogue and persuasive
approach.” He added that “we decline foreign interference in settling this issue.”87
A measure of openness in government led to moves towards autonomy for Papua in the reformasi
period following the end of President Suharto’s authoritarian rule. This led President B.J. Habibie
in 1999 to enact laws to allow Papua to keep an increased share of locally generated wealth. The
Indonesian People’s Legislative Council (DPR) also passed legislation granting Special
Autonomy for Papua which called for the establishment of a Papua People’s Council and
reaffirmed customary law. 88 This period of openness to local autonomy lost momentum and its
provisions were never fully implemented. Subsequently in January 2003, then-President
Megawati Sukarnoputri moved to divide the province into three provinces, an action viewed by
many Papuans as designed to undermine and divide their cause.
It was reported in March 2010 that the military was considering basing a new infantry division in
Papua.89 In April 2010, Major General Hotma Marbun, a former Kopassus special forces officer
who was appointed regional military commander for Papua and West Papua in January 2010,
stated that the reportedly 10,000 strong infantry brigade unit, which includes naval and air forces
in Papua, was sufficient to carry out its duties in Papua and West Papua.90
(...continued)
U.S. Support for Indonesia, Human Rights Abuses by Indonesian Military,” Edited by Brad Simpson, Posted July 9,
2004 http://www.gwu.edu/~nsarchiv. See also Jim Lobe, “US Sacrificed Papua to Court Suharto,”
http://www.atimes.com “US ‘Concern’ Over West Papua,” The Australian, and Alan Sipress, “Declassified US Papers
Spark Indonesian Rebuke,” Washington Post, July 18, 2004.
84 “West Papua Autonomy to be Reviewed,” PACNEWS, August 2, 2010.
85 Michael Casey, “Indonesia’s President Vows to Solve Papua Conflict, Rejects International Help,” Associated Press,
August 16, 2005.
86 “Papua Settlement Won’t Involve Foreign Parties,” Bisnis Indonesia, September 30, 2005.
87 Michael Casey, “Indonesia’s President Vows to Solve Papua Conflict, Rejects International Help,” Associated Press,
August 16, 2005.
88 Council on Foreign Relations, Indonesia Commission: Peace and Progress in Papua, New York, 2003, p. 43.
89 “Indonesian Army to Set up New Commands,” BBC News, March 31, 2010.
90 Markus Makur, “Security Condition Conducive, Military Chief,” April 13, 2010. “Indonesia Appoints New Military
Commander,” Radio New Zealand, January 20, 2010.
Congressional Research Service
16
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Radical Islam and Inter-Communal Strife
While the vast majority of Indonesians practice a moderate form of Islam, a very small radical
minority have sought to establish an Islamic state. Some extremists are hostile to the Christian
minority and an even smaller group would use violence to establish an Islamic Khalifate
throughout the Muslim areas of Southeast Asia. While they represent an extremely small
percentage of the population, such groups have created much internal turmoil in Indonesia. A
distinction can be drawn between groups such as the now disbanded Lashkar Jihad that focused
on Indonesian inter-communal conflict between Muslims and Christians in Maluku, and factions
of Jemaah Islamiya (JI), which have used terrorist methods to promote an extreme Islamist
agenda with linkages to al Qaeda. There have also been allegations that Lashkar Jihad was a tool
of hard-liners within the military that opposed the reform movement and who allowed, or
possibly even assisted, Lashkar Jihad activities that destabilized the nation, thereby highlighting
the need for a strong military that could impose order.91 There has also been inter-group conflict
elsewhere in Indonesia such as between Muslims and Christians in Sulawesi and the Maluku, and
between local Dayaks and internal Madurese migrants in Kalimantan.92
Much attention has been focused on the potential rise of Islamic sentiment in Indonesia in recent
years. This was most notable in a political context with the rise of the Islamist PKS Justice Party
in the 2004 election. In that election, the PKS increased its seats to 45 from 7 (out of 550)
following the 1999 parliamentary election. Many attributed the success of the PKS in
parliamentary elections in 2004 to its campaign platform of good governance and its party
organization rather than to its Islamist character. The PKS is not the largest Muslim party and
does not represent the large Muslim mainstream groups. Some 90.4% of Indonesians believe
religious affairs should be within the framework of the state ideology of Pancasila, which
encompasses five key guiding principles for the state, and the constitution. Some 91.6% of
Indonesians believe that Indonesia’s state ideology is correctly based on Pancasila.93 The lack of
further success by Islamic political parties in the 2009 election allayed concerns that political
Islam would radicalize Indonesia.
Despite the success of the national-secular political parties, there have been challenges to the
secular nature of the Indonesian state over cultural and moral issues. Not only the strictly
fundamentalist Muslims but also more traditional Muslims protest the influence of Western
cultural and moral values in Indonesian society. The challenge has four components.
First is the direct action by radical Muslim groups against businesses and institutions which they
accuse of representing Western cultural and moral values. The most widely publicized group is
the Islamic Defenders Front (FPI). The FPI targets such businesses for direct, violent action.
Squads of FPI cadre have forcibly shut down gambling dens, discos, nightclubs and bars that
serve alcoholic beverages, and brothels. The FPI also has targeted Christian churches. Attacks by
the FPI and like-minded Muslim groups have forced the closure of upwards of 100 Christian
churches since September 2004, including more than 30 in West Java alone.94 The FPI is
91 See Sydney Jones’ work for the International Crisis Group, http://www.crisisgroup.org.
92 Amit Chanda, “Seven Killed in Indonesia, as Violence Flares up Again in Restive Maluku Province,” Global Insight
Daily, May 17, 2005.
93 Robin Bush, “The Future of Islamic Parties and Islamic Politics in Indonesia,” The Asia Foundation, 2008.
94 Yuli Tri Suwarni, “Another Christian Church Attacked in Bandung, Jakarta Post (internet version), June 4, 2007.
Congressional Research Service
17
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
estimated to have supporters in the tens of thousands at most. It and similar groups receive
financial backing from Saudi Arabia. Its influence is felt widely partly because police and law
enforcement authorities have adopted a permissive attitude toward its activities. Arrests of FPI
members are few and infrequent despite the government’s revisions of public assembly laws to
make it easier to disband violence-prone groups.95 Despite some ongoing activity it appears that
this type of militant action is less intense than in years past.
The second component is pressure by Muslim groups on authorities to establish Islamic Sharia
law. This is felt primarily on the provincial and local levels. The State Department’s human rights
report for 2006 cited an estimate that more than 56 Sharia-based local laws have been issued
throughout Indonesia. These laws often require that women wear head scarves, require that
officials read the Koran in Arabic, segregate men and women in public places, and prohibit
alcohol and gambling. So far, the central government have not challenged the constitutionality of
such laws.96
The third component is judicial action against non-Muslims or Indonesians who are accused of
insulting Muslim beliefs. The fact that the Indonesian government prosecuted the editor of
Playboy Indonesia for breaching the country’s indecency laws after mounting protest against the
magazine by fundamentalist Muslim groups is one example.97
The fourth component is in education, particularly in the thousands of “pesantren” Islamic
boarding schools in Indonesia. Observers warn that the instruction in these schools increasingly is
of a fundamentalist nature that emphasizes intolerance of other religions and non-Muslim, secular
practices. Former Indonesian President Abdurrahman Wahid warned in April 2007 that the
teaching of fundamentalist Islam in the pesantren schools is an acute problem and that the
problem is spreading into Indonesian universities.98
There are other areas of inter-communal strife in Indonesia. Two ethnic groups in East
Kalimantan, the Bugis and the Tidung who are the indigenous people of Tarakan, have clashed
over the years. Tensions appeared to be mounting between these two groups in the fall of 2010 as
a inter-communal riot broke out between these two groups in September 2010. In 2000, in what is
known as the Sampit incident of central Kalimantan, over 500 were killed and 100,000 displaced
as a result of such clashes.99 Elements of the Air Force Special Troops Corps were deployed to
quell the violence in Tandung in 2010.100
95 Tom McCawley, “Once Free, Indonesian Cleric Could ‘Revitalize’ Radicals,” Christian Science Monitor, June 14,
2006. Bret Stephens, “The Arab Invasion,” The Wall Street Journal Asia, April 18, 2007.
96 Blake Respini, and Herdi Sahrasad, “The Rise of Sharia Seems not a Threat to Civil Society,” Jakarta Post (internet
version), May 19, 2007. Jane Perlez, “ Spread of Islamic Law in Indonesia Takes Toll on Women,” New York Times,
June 27, 2006.
97 Sadanand Dhume, “ Playboy in Indonesia,” The Wall Street Journal Asia, March 30, 2007. “Playboy Exposes
Indonesian Tensions,” The Wall Street Journal Asia, April 11, 2007.
98 Bret Stephens, “The Journal Interview with Abdurrahman Wahid: the Last King of Java,” The Wall Street Journal
Asia, April 10, 2007. Alpha Amirrachman, “Pesantren Communities unable to Accept Pluralism, Tolerance,” Jakarta
Post (internet version), January 27, 2006.
99 Maria Patrikainen, “Five Killed in Ethnic Clashes in east Kalimantan,” Global Insight, September 29, 2010.
100 “Aior Force Special Troops Deployed to Tarakan to Prevent Clashes,” BBC News, September 30, 2010.
Congressional Research Service
18
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
The Struggle Against Radical Islamist Extremists
The United States and Indonesia have a common interest in addressing the threat of militant
Islamists in Indonesia and Southeast Asia. The syncretic nature of Islam in Indonesia, which has
overlaid earlier animist, Buddhist, and Hindu traditions, is more moderate in character than Islam
is in the Middle East or Pakistan. Further, the main political parties in Indonesia are secular-
nationalist in their outlook. However, radical or militant Islamists are a threat to the largely
secular state and moderate Muslim society of Indonesia. Terrorist activity is not limited to
attacking Western targets in Indonesia. In June 2010, one militant was sentenced for his role in a
plan to assassinate President Yudhoyono as well as for his involvement in two hotel bombings in
Jakarta in 2009.101
Indonesian views of the nature of the threat from militant Islamists have evolved over time.
Islamists were generally suppressed under the New Order regime of former President Suharto.
The reformasi period that followed Suharto’s fall allowed an opening up of society that gave such
views space that was absent under the New Order. After the 2002 Bali bombing that killed over
200 people, Indonesia moved from seeing local militant Islamist groups, such as Jemaah Islamiya
(JI), as threats not only to Western and American interests in Indonesia but also as direct threats to
the Indonesian government and the Indonesian people. (For background information on JI and
militant Islam in Indonesia see CRS Report RL34194, Terrorism in Southeast Asia, coordinated
by Bruce Vaughn.) Key terrorist attacks in Indonesia include the Bali bombing of 2002, the 2003
bombing of the Marriott Hotel in Jakarta, the 2004 bombing of the Australian Embassy, and
bombing attacks against Western hotels in Jakarta in 2009.
While for most of the 2000s, JI was the key terrorist organization in Indonesia, this now appears
to be shifting. According to Sidney Jones of the International Crisis Group, it now appears that
militant Islamists can be identified with one of three groups: JI; the remaining members of the
network of Noordin Top, a militant killed in 2009; and a new alliance of various Jihadists that had
set up a training camp in Aceh. JI is evidently now focused on rebuilding its organization after
having been effectively pursued by the Indonesian government. JI is also focused on establishing
an Islamist state in Indonesia and possibly the region, as opposed to the Noordin Top network that
is more focused on attacking Western targets in Indonesia.
The raid on the new alliance of Jihadists in Aceh, which began on February 22, 2010, has
uncovered a group which according to Sydney Jones “… is a composite of people from a number
of different militant groups like Jemaah Islamiya, Kompak and Darul Islam, who are frustrated
with what they see as a lack of action within these groups. They’re more radical, and apparently
see themselves as Indonesia’s al-Qaeda.”102 The February Aceh raid apparently led to the March
2010 raid that killed a militant named Dulmatin, who is thought to be one of the planners and
executers of the 2002 Bali bombing. It is thought that a militant named Saptono took over the
Aceh cell after Dulmatin was killed. Saptono was in turn killed during a raid in May 2010.103
Some experts have observed that the capture, rather than the killing, of such leaders could yield
valuable intelligence.
101 “Indonesia Jails Driver Over Jakarta Hotel Bomb,” BBC News, June 14, 2010.
102 “Are Indonesian Terror Networks Regrouping?” BBC News, March 10, 2010. Sydney Jones, Remarks with Ernest
Bower, Center for Strategic and International Studies, Washington, DC, 2010.
103 Tom Allard, “Police Mount Terrorist Raids in Lead-up to Obama’s Visit,” The Sydney Morning Herald, May 14,
2010.
Congressional Research Service
19
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
In May 2010, it was reported that a plot to assassinate President Yudhoyono and other national
leaders in a rifle/grenade attack on Indonesia’s Independence day (August 17, 2010) was
disrupted. It was also reported that the plotters were considering moving the attack up to coincide
with President Obama’s now canceled June 2010 visit.104 A leader of the Aceh cell that was
reportedly planning to assassinate President Yudhoyono, Abdullah Sunata, was captured in June,
2010. He was previously released from prison after having been imprisoned for his role in the
Australian embassy bombing.105
The government’s response to militant Islamists has been largely effective, though there are some
problem areas. Rivalry between the Indonesian military (TNI), the police, and the state
intelligence agency BIN probably keeps the state’s response from being as effective as it could
be. Lax standards at prisons have reportedly allowed militants to communicate with their
organizations while in prison. Government-run deradicalization programs, which are more
cooptative than ideological in nature, have reportedly allowed some militants to rejoin their
organizations after their release from prison.106 Indonesia has reportedly arrested 400 terror
suspects and released 242.107
In September 2010, General Ansyaad Mbai was appointed head of Indonesia’s new National
Counter Terrorism Agency (BNPT) that was formed by presidential decree. The BNPT will carry
out its functions under the Coordinating Minister of Security, Political, and Legal Affairs and is
tasked with formulating policies and programmes and coordinating the implementation of
policies.108 Some fears have been voiced that the BNPT will act in ways similar to former
President Suharto’s New Order regime. Others are concerned that BNPT may find it difficult to
effectively coordinate the counterterror efforts of the police, TNI, and BIN.109 Security Affairs
Minister Djoko Suyanto stated that there was no room for complacency during his remarks to a
BNPT-organized conference on counterterrorism in October 2010.110 Another new development
in Indonesia’s counter-terror operations in 2010 includes the use of TNI troops, particularly
Kopassus troops, in counter-terror operations.111
There reportedly was an increase in low-level terrorism activity in Indonesia in 2010 which
appears to be aimed at building up terrorist groups financial resources. In the fall of 2010 there
were a number of robberies that were believed to be linked to efforts to fund radical
organizations. Three policemen were killed at the Hamparan Perak police station a few days after
police arrested robbers of a bank in Medan. Police killed three who robbed a bank in Padang.112
The Indonesian police reportedly believe that Abu Bakar Ba’asyir delivered sermons in Medan
104 Ashish Kumar Sen, “”Terrorists Planned to Kill President During Obama Visit; Mumbai-Style Strike was Goal,”
The Washington Times, May 18, 2010.
105 Tom Allard, “Indonesia Terror Laws to Change,” The Age, June 5, 2010. “SBY Hopes Terrorist Arrest Cripples
Cell,” The Jakarta Post, June 24, 2010.
106 Sydney Jones, Remarks with Ernest Bower, Center for Strategic and International Studies, Washington, DC, 2010.
107 “Bali Bomber Dulmatin Confirmed Dead,” BBC News, March 10, 2010.
108 Fatima Astuti, “Indonesia’s National Counter Terrorism Agency,” International Centre for Political Violence and
Terrorism, October 2010.
109 “Indonesia’s National Counter Terrorism Agency,” Eurasia Review, October 11, 2010.
110 “Indonesia Seeks Renewed Anti-Terror Fight,” Sydney Morning Herald, October 18, 2010.
111 Salim Osman, “Joint Terror Op Sparks Debate in Indonesia,” The Straits Times, October 12, 2010.
112 “Military Vows to Crush Terrorist Network,” The Jakareta Post, September 27, 2010.
Congressional Research Service
20
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
which motivated the attacks on the Hamparan police station and the robbery of the Bank in
Medan.113
The Economy
Indonesia has weathered the recent global economic downturn comparatively well. While GNP
growth dipped from 6% in 2008 to 4.5% in 2009, it is expected to increase to 5.9% in 2010 and
6% in 2011. The dip was less of a downturn than was expected. Projected growth in 2010 and
2011 is thought to be driven largely by private consumption and investment.114 Indonesia’s
relative lack of exposure to export markets in the United States and Europe have helped, as has its
deep resource base and very favorable demographics.
Indonesia benefited from inflows of capital in 2010. An estimated $9 billion flowed into the
Rupiah bond market and an additional $2.5 billion into local stocks while Indonesia reportedly
received $8 billion in foreign direct investment and further significant investment in infrastructure
and real estate.115 Listed companies reportedly attained strong earnings growth of 36.9% year on
year in August 2010 and the Jakarta composite index rose 22% from January 1 to August 13,
2010.116
The relatively good performance of the Indonesian economy was thought to be at least partially
responsible for the electorate’s support for President SBY and his Democrat Party in the 2009
elections. Poverty alleviation, social welfare, and jobs were central issues in those elections.117
For this reason economic growth will likely continue to be a priority for the Democrat Party.
Even as the economy is performing well and attracting investment, Indonesia continues to
struggle to lift masses out of poverty while developing its infrastructure. The World Bank
Country Partnership Strategy (2009-12): Investing in Indonesia’s Institutions stated that in 2007
nearly half of Indonesia’s population was living below or just above the poverty line, that job
creation was growing at a slower rate than the rate of population growth, that parts of eastern
Indonesia remained underdeveloped, and that Indonesia received low marks in certain health and
infrastructure indicators.118
113 “Ba’asyir Linked to Medan Group,” Koran Tempo, October 9, 2010.
114 “Indonesia: Country Report,” The Economist Intelligence Unit, September 2010.
115 Assif Shameen, “Is Indonesia the New China?” Barrons, October 9, 2010.
116 “Indonesia: Capital Inflows Rise on Investor Confidence,” Oxford Analytica, August 13, 2010.
117 “Country Report: Indonesia,” The Economist Intelligence Unit, July 2009.
118 “Country Partnership Strategy (2009-2012): Investing in Indonesia’s Institutions,” The World Bank,
http://www.worldbank.org/mitrindonesia.
Congressional Research Service
21
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Despite having long been a key oil exporter, Indonesia has in
Indonesian GDP
recent years become a net oil importer. Indonesia’s oil
2008
6.0%
production peaked at 1.6 million barrels per day (bpd) in
1995. Observers note that Indonesia will need foreign
2009
4.5%
investment to help it boost production in its aging oil
2010
5.9% Est.
fields.119 It is, however, the world’s second largest producer
2011
6.0% Est.
of liquefied natural gas (LNG). Indonesia is thought to have
an estimated 8.6 billion barrels of oil and 182 trillion cubic
Source: Economist Intelligence Unit.
feet of natural gas in reserves.120
The Environment
As the world’s third largest contributor to rising greenhouse gasses, largely due to deforestation,
Indonesia has the potential to play a key role in mitigating climate change. Much of Indonesia’s
logging is illegal. President Yudhoyono has pledged to cut Indonesia’s carbon emissions by 26%
by 2020.121 As part of this agenda Indonesia and Norway have agreed to a $1 billion deal to
preserve Indonesian natural forests and peatlands. This led Yudhoyono to announce a two-year
moratorium on the clearing of natural forests.122 Approximately 85% of Indonesian emissions are
from deforestation.123 Indonesian efforts to preserve its and the region’s maritime environment
can also play a positive role in promoting Pacific tuna and other fish stocks.
President Yudhoyono has raised Indonesia’s profile on environmental issues in recent years, and
the United States and Indonesia have begun to cooperate in the area. In June 2010, the U.S. and
Indonesia announced the establishment of a center to focus on linking science and policy
including public-private partnerships in the area of climate change.124 In 2009 President
Yudhoyono made a pledge to reduce Indonesia’s carbon emissions by up to 41% below business-
as-usual levels by 2020.125 Indonesia hosted the 13th Conference of the Parties of the United
Nations Framework Convention on Climate Change in December 2007 and the World Ocean
Conference in May 2009. Deforestation is the main contributor to Indonesia’s carbon emissions,
which are the third highest in the world after the United States and China when deforestation
effects are taken into account. Indonesia has immense biological diversity in its tropical
rainforests and in its archipelagic marine environment. This is under threat from various pressures
including, logging, climate change, and pollution.126
The logging of Indonesia’s forests, both legal and illegal, is an issue of increasing concern to
many. Indonesia has the world’s third-largest tropical forests and the world’s largest timber trade.
Rain forests are thought to be an important sink for global atmospheric carbon and play a vital
119 Andi Abdussalam, “Indonesian Oil Output Showing Upward Trend,” Antara News, May 14, 2008.
120 “Pertamina, Talisman to Cooperate on Indonesia Oil,” Reuters, June 23, 2008.
121 “US Hails Growing RI Role in World Affairs,” The Jakarta Post, June 7, 2010.
122 “Shock and Uncertainty Over Forest Clearing Moratorium,” Jakarta Globe, May 31, 2010.
123 “Indonesia 3rd Largest Greenhouse Gas Producer Due to Deforestation,” mongabay.com, March 26, 2007.
124 Statement of Maura O’Neill, USAID, Before the House Foreign Affairs Subcommittee on Asia , The Pacific and the
Global Environment, July 27, 2010.
125 State Department, “Background Notes: Indonesia,” August 2010.
126 “Background Note: Indonesia,” U.S. Department of State, March 2009.
Congressional Research Service
22
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
role in climate. Rain forests contain an estimated two-thirds of the planet’s plant and animal
species. It is estimated that logging and other clearing of rain forests has reduced their extent
from 14% of the earth’s surface to 6%. A special report by The Economist estimated that about 2
million hectares of Indonesian forest, an area the size of Massachusetts, are logged each year.
In the 15 years leading up to 2006, Indonesia lost one quarter of its forests. One 2006 estimate
projected that at current rates of logging Indonesia’s forests would be logged out in 10 years.127
The destruction of Indonesia’s forests would likely lead to widespread species extinction. It is
estimated that illegal logging deprives Indonesia of some $3 billion annually. Burning of logged
land to clear it for palm plantations and other uses in Southeast Asia led to widespread haze over
the region in 1997, which accounted for an estimated 8% of greenhouse gasses emitted
worldwide in that year.128 In the years since, Indonesian fires have contributed to haze in the
region, including 2010 when Singapore and parts of Malaysia were clocked in such pollutants.
From 1998 to 2010 it is estimated that about quarter of West Papua’s forests have disappeared due
to logging and clearing.129
The United States and Indonesia moved to begin to address the problem of illegal logging in April
2006. Bilateral talks were initiated to reach an agreement to deal with the problem of illegal
logging in Indonesia which is estimated to account for 80% of all logging in Indonesia.130 The
United States and Indonesia signed a bilateral agreement to combat illegal logging and associated
trade in November 2006. The United States initially committed $1 million to fund remote sensing
of illegal logging and to develop partnerships with non-governmental organizations and the
private sector. The agreement established a working group under the U.S.-Indonesia Trade and
Investment Framework Agreement.131
Indonesia has been working with Norway to develop and implement a national Reduce Emissions
from Deforestation and Degradation (REDD) program. Norway has pledged one billion dollars
for the purpose. In October 2010 Indonesia asked Norway to postpone disbursement of funds
under its climate partnership deal as Indonesia had yet to complete preparatory steps to
implement the project.132 Concerns remain that corruption in the forestry sector may thwart
efforts to reduce carbon emissions in this area.133
Indonesia has the most threatened species of mammals in the world. Poaching, deforestation, and
illegal logging continue to threaten the existence of orangutans, the Sumatran Tiger, and the Javan
Rhino. Ninety percent of the orangutan’s habitat has been destroyed as land is cleared with fire by
illegal logging, plantation companies, and farmers. It is thought that orangutans will disappear in
the wild in Indonesia if present deforestation trends continue.134 The Javanese Tiger and the
127 Tanja Vestergaard, “Indonesia Launches Talks with U.S. on Fight Against Illegal Logging,” Global Insight Daily
Analysis, April 5, 2006.
128 “Special Report: The Logging Trade,” The Economist, March 25, 2006.
129 “Rogue traders in timber Smuggling Exposed,” Newswire, August 5, 2010.
130 Tanja Vestergaard, “Indonesia Launches Talks with U.S. on Fight Against Illegal Logging,” Global Insight Daily
Analysis, April 5, 2006.
131 Office of the U.S. Trade Representative, “Agreement on Illegal Logging as Part of Effort to Deepen Trade and
Investment Relations,” November 16, 2008.
132 “Government Puts Off Norway Fund Disbursement,” The Jakarta Post, October 7, 2010.
133 Sunanda Creagh, “Graft Could Jeopardise Indonesia’s Climate Deal,” Reuters, September 17, 2010.
134 Niniek Karmini, “Orangutans Flee Indonesian Forest Fires,” The Associated Press, November 6, 2006.
Congressional Research Service
23
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Balinese Tiger became extinct in the 1970s. Only about 400 Sumatran Tigers are thought to
remain alive. This is a dramatic decrease from an estimated 1,000 Sumatran Tigers in the 1970s.
Their decrease is similarly attributed to a combination of deforestation, illegal logging, and
poaching. Effective control of the illegal trade in wild animal parts is thought to be essential for
the species survival.135 The Javanese Rhino is similarly threatened with only 60 thought to remain
in the wild.136
Indonesia hosted the World Ocean Conference in May 2009 where Indonesia, Malaysia, Timor-
Leste, Papua New Guinea, the Solomon Islands, and the Philippines met and adopted a 10-year
action plan to address threats to the maritime environment, particularly with coral reefs, fish, and
mangroves. The agreement, the Coral Triangle Initiative on Coral Reefs, Fisheries and Food
Security, is not legally binding but covers some six million square-kilometers of ocean.137 Climate
change is particularly threatening to Indonesia as sea level rise would adversely affect many of
Indonesia’s low-lying coastal areas.
Human Rights and Religious Freedom
Much attention in the United States has been focused on human rights in Indonesia. The State
Department’s annual human rights report states that the Indonesian government “generally
respected the human rights of its citizens and upheld civil liberties.” The report noted that
problems remain, including “killings by security forces; vigilantism; harsh prison conditions;
impunity for prison authorities and some other officials; corruption in the judicial system;
limitations on free speech; societal abuse and discrimination against religious groups” among
other concerns. The report also noted that civilian control of the military was weakened by the
partially self-financed nature of the TNI and that Indonesia continued to make progress in
strengthening and consolidating its democracy.138 The West Papua Advocacy Team stated that the
State Department report “pulled its punches” when describing Indonesian human rights violations
and stated that security forces “remain largely unaccountable to a judicial system that is deeply
corrupt and cowed by the power of the security forces.”139
Human Rights Watch observed in its 2009 World Report that Indonesia “saw little human rights
progress.” The report was critical of Indonesia for a general lack of effort to “pursue
accountability” for past abuses and observed that “endemic police torture also routinely goes
unpunished.” The report also criticized the government for bowing to pressure from Islamic hard-
line groups on the Ahmadiyya140 and stated that “deeply rooted distrust of Jakarta [in Papua] is
still a time bomb; failure to address human rights—including security force abuse—is one
135 Oyos Saroso, “Poachers Moving into Northern Sumatra,” The Jakarta Post, May 31, 2008.
136 “World’s Rarest Rhinos Captured on Video,” Reuters, May 29, 2008.
137 Jonathan Wootliff, “Historic Agreement in Manado Throws Coral Habitats a Lifeline,” Jakarta Post, May 19, 2009.
138 2009 Human Rights Report: Indonesia, Bureau of Democracy, Human Rights, and Labor, Department of State,
March 11, 2010.
139 ETAN/WPAT, “Comments on the U.S. Department of State Country Reports on Human Rights Practices for 2009,”
http://www.etan.org/news/2010/04statehr.htm.
140 The Ahmadiya are a group that while viewing themselves as Muslim do not hold all the same views as the
mainstream Muslim community. As a result, they are often criticized or persecuted by some mainstream Muslim
believers.
Congressional Research Service
24
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
important reason the distrust has not been dispelled.”141 Others have pointed to the candidacy of
former General Wiranto and General Prabowo Subianto, both of whom are suspected of Suharto-
era human rights abuses, as vice presidential candidates in the July 2009 presidential election as
evidence of a lack of forward progress on human rights in Indonesia.142
The Question of Genocide in Papua
Key decision makers and observers of the conflict in West Papua have expressed their concern
that “there is strong indication that the Indonesian government has committed genocide against
the Papuans.”143 Fifty members of Congress signed a letter to President Obama in August 2010
stating that there are strong indications that the government of Indonesia has committed
genocide.144 Among others, Indonesian journalist Andreas Harsono, who is also reportedly a
consultant to Human Rights Watch, stated that political repression and genocide are occurring in
West Papua.145 Recent reports appear to indicate that abuses continue. It has been reported that a
Papuan journalist was recently found dead with signs of torture. A video of a wounded Papuan
separatist being tortured while he was questioned by uniformed personnel on YouTube also raises
concerns over ongoing abuse.146
Webster’s dictionary defines genocide as the “the deliberate and systemic destruction of a racial,
political, or cultural group.” There is widespread concern over the survival of the indigenous
Melanesian people and their culture in West Papua. While actions by Indonesian security forces
and the government of Indonesia are cited as being responsible for widespread human rights
abuses of Papuan people over many years, leading to the death of a significant proportion of the
Papuan population, there is less agreement that this has been done in a deliberate and systemic
way by the central government in Jakarta.
While noting that Indonesia generally “respected the human rights of its citizens” the United
States Department of State Country Report on Human Rights Practices of 2009, which was
released in March 2010, states that “there were problems during the year in the following areas:
killings by security forces….” The report also noted that “violence affected the provinces of
Papua and West Papua.”147
In August 2005, the Centre for Peace and Conflict Studies at the University of Sydney in New
South Wales, Australia, published a report, Genocide in West Papua, which assesses the treatment
of Papuans by the TNI. The report details
141 “World Report 2009: Indonesia,” Human Rights Watch, 2009, http://www.hrw.org.
142 Sunanda Creah, “Indonesian Election Setback for Human Rights,” Reuters, May 19, 2009.
143 Press Release, “Calling on the Obama Administration to Make West Papua One of Its Priorities,” Office of
Congressman Faleomavaega, July 31, 2010.
144 “50 Members of Congress Call Upon Obama Administration to Make West Papua One of its Highest Priorities,”
Mediacom NZPAME, August 1, 2010.
145 Lynette Lee Corporal, “Journalists Lament Media Bias Against Ethnic Minorities,” Inter Press Service, April 29,
2010.
146 Sunanda Creagh, “Treatment of Suspected Indonesian Separatist Raises Alarm,” Reuters, August 8, 2010.
147 United States Department of State, Country Report on Human Rights Practices 2009, “Indonesia,” Released by the
Bureau of Democracy, Human Rights, and Labor, March 2010.
Congressional Research Service
25
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
a series of concerns which, if not acted upon, may pose serious threats to the survival of the
indigenous people of the Indonesian province of Papua. It covers the threats posed by the
Indonesian military to the province’s stability, the recent increase in large scale military
campaigns which are decimating highland tribal communities, the HIV/AIDS explosion and
persistent Papuan underdevelopment in the face of rapid and threatening demographic
transition in which the Papuans face becoming a minority in their own land.148
The report also states that “a culture of impunity exists in Indonesia which sees its highest
manifestation currently in Papua ... military operations have led to thousands of deaths in
Papua ... the Republic’s armed forces act as a law unto themselves.”149 The report cites
eyewitness accounts of Indonesian “military involvement in acts of arson, theft, rape, and
torture.”150
Other groups have similarly asserted evidence of repression. A 2004 report by the East-West
Center on the conflict in Papua found that the Indonesian government’s approach to Papua has
ranged from “the overtly repressive to the occasionally accommodative” and observed that “the
cycles of repression and alienation simply consolidate Papuan identity and support for
independence.”151 Human Rights Watch (HRW) has described the TNI’s actions in Papua as
responding to the OPM with “disproportionate force” adding that “unarmed civilians continue to
be among those injured or killed in military reprisals. Arbitrary detention, torture, disappearances,
and arson are widespread in this vast and isolated region of Indonesia.” HRW has also pointed to
the influx of non-Melanesian Indonesians, who remain largely in the towns and are mostly Malay
Muslims as opposed to the more rural and Christian native Melanesian Papuans. This division
presents a “volatile mix susceptible to manipulation by unscrupulous political leaders.”152 While
the 2004 report Indonesian Human Rights Abuses in West Papua, by the Allard K. Lowenstein
International Human Rights Clinic at Yale University Law School did “not offer a definitive
conclusion about whether genocide has occurred [in Papua] it finds in the available evidence a
strong indication that the Indonesia government has committed genocide against the West
Papuans.” It goes on to state that even if the violence committed against Papuans were not
committed with the intent to destroy the Papuans as a group “many of these acts clearly constitute
crime against humanity.”153 An international dimension to the conflict arose in January 2006
when a group of 43 Papuans fled to Australia in an outrigger canoe and asked for political
asylum.154
148 Centre for Peace and Conflict, University of Sydney, New South Wales, Australia.
149 John Wing and Peter King, Genocide in West Papua? The Role of the Indonesian State Apparatus and a Current
Needs Assessment of the Papuan People (Sydney: University of Sydney, August 2005).
150 Samantha Hawley, “Indonesian Military Accused of Calculated Violence in Papua,” Australian Broadcast
Corporation, August 18, 2005.
151 Richard Chauvel and Ikrar Nusa Bhakti, The Papuan Conflict: Jakarta’s Perceptions and Policies, (Washington:
East-West Center, Policy Studies 5, 2004).
152 Human Rights Watch Asia, “Overview of Human Rights Issues in Indonesia.”
153 Allard K. Lowenstein International Human Rights Clinic paper prepared for the Indonesian Human Rights Network,
“Indonesia Human Rights Abuses in West Papua: Application of the Law of Genocide to the History of Indonesian
Control,” Yale University Law School, April 2004.
154 A. Sukarsono, “Jakarta Warns Australia not to Give Papuans Asylum,” Reuters, January 20, 2006.
Congressional Research Service
26
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Religious Freedom
Though Indonesia is overwhelmingly Muslim, its constitution protects religious minority groups.
Non-Muslims generally enjoy a general level of freedom in their beliefs within Indonesian
society. That said, inter-communal strife has boiled over into violence in places such as Poso and
Ambon. A government panel recommended in April 2008 that the Ahmadiyya group, a Muslim
sect, be banned. This decision followed a January 2008 fatwa by Indonesia’s highest religious
authority, the Indonesian Ulama Council, to ban the sect for its deviance. The Ulama Council
shortly thereafter submitted its fatwa to the Indonesian Attorney General’s Office.
The Ahmadiyya of Indonesia, like other Ahmadiyya around the world, believe that their founder
Mirza Ghulam Ahmad, who founded the religion in 1889 in the Punjab in British India, was a
prophet. The Ahmadiyya belief was first brought to Indonesia from India in 1925. Their views
place them at odds with more mainstream Muslims who believe that The Prophet Mohammad
was the last prophet. Ahmadiyya do accept Mohammad as a prophet and one of God’s
messengers. As a result of their differences, many in Muslim society, including in Indonesia, do
not view Ahmadiyya as true Muslims. It is reported that they have no open supporters among
Indonesia’s elite.155 Some Indonesians have been calling for the Ahmadiyya to be banned and
driven out of Indonesia. It is estimated that there are some 200,000 to 500,000 Ahmadiyya in
Indonesia.156
Attacks against Ahmadiyya and their Mosques have grown in recent years. The extremist
Komando Laskar Islam, thought to be affiliated with the Islamic Defenders Front (FPI), attacked
an alliance of moderate groups, known as the National Alliance for Freedom of Religion and
Faith, that was demonstrating peacefully in support of religious freedom on June 1, 2008, at the
Indonesian National Monument Square (Monas) in Jakarta. The FPI has in the past been involved
with demonstrations against the U.S. Embassy and the offices of Playboy magazine.
According to one report, the government of Indonesia through the Attorney General’s Office has
banned the group from practicing in Indonesia due to its view that the Ahmadiyya are a deviant
sect and because they are causing restlessness in the Muslim community in Indonesia.157 On April
18, 2008, the day following reports that the group had been banned, Indonesian Vice President
Jusuf Kalla stated that there would be no detention of Ahmadis.158
The Ulama Council subsequently felt that the government did not go far enough in its actions. On
April 20th thousands of Muslim hard-liners protested to demand the active disbanding of the
Ahmadiyya. It is thought that Muslim extremists would go beyond banning of the practicing of
the Ahmadiyya belief and would favor adopting further measures that would actively seek to
disband and/or drive the group out of Indonesia.159 Some outside commentators view the decision
to crackdown on the Ahmadiyya as pandering to Islamic extremism. This placed the government
155 Bramantyo Prijosusilo, “Comparing the Ahmadiyah and the Hizbut Tahrir,” The Jakarta Post, April 16, 2008.
156 Salim Osman, “Ban Minority Sect, Islamic Holy Body Urges Jakarta Govt,” The Straits Times, January 2, 2008.
157 Salim Osman, “Jakarta Cracks Down on Deviant Islamic Sect,” The Straits Times, April 17, 2008.
158 “Indonesian Vice President Says No Arrest on Followers of Banned-Sect,” Xinhua News Agency, April 18, 2008.
159 Salim Osman, “Ban Minority Sect, Islamic Holy Body Urges Jakarta Govt,” The Straits Times, January 2, 2008.
Congressional Research Service
27
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
of Susilo Bambang Yudhoyono in a difficult position in the lead-up to elections scheduled for
April 2009.160
The government’s response in 2008 appeared to seek to avoid alienating both religious extremists
and moderates in the period leading up to elections in 2009. On the one hand, the government
issued a decree banning the sect from spreading its message. On the other hand, it pledged not to
persecute Ahmadiyya. Its move to arrest those extremists that used violence against moderates
demonstrating in support of religious tolerance in 2008 also demonstrates the government’s desire
to place limits on how far the extremists can go.
The State Department International Religious Freedom Report 2008 stated that
“recommendations by government appointed bodies and a subsequent government decree
restricting the ability of the Ahmediya to practice freely were significant exceptions” to the
general practice of respecting religious freedom in Indonesia. The report also noted the use by
some groups of “violence and intimidation to force at least 12 churches and 21 Ahmadiya
mosques to close.”
External Relations
Indonesian foreign policy has been shaped largely by two men, Presidents Sukarno and Suharto,
although more recent presidents, particularly Yudhoyono, have sought to increase the nation’s
presence on the world stage. Once a leading force in the Non-Aligned Movement (NAM) of the
early Cold War era, Indonesia has traditionally sought to remain largely independent from great
power conflict and entangling alliances. Sukarno’s world view divided the world into new
emerging forces and old established forces. Sukarno sought to fight the forces of neo-colonialism,
colonialism, and imperialism, which brought his government closer to China in 1964-65. By
contrast, Suharto’s New Order lessened Sukarno’s anti-western rhetoric and focused on better
relations with other Southeast Asian nations. Under Suharto, Indonesia was one of the founding
members of the Association of Southeast Asian States (ASEAN) in 1967 and played a key
leadership role in the organization. Indonesia’s internal problems since 1998 have kept it largely
internally focused. As a result, it has not played as active a role in the organization as in past
years. Indonesia exerts a moderate voice in the Organization of Islamic Conference (OIC) and is a
member of Asia-Pacific Economic Cooperation (APEC). In recent years, Indonesia has done
more to project itself as a moderating force in the Muslim world, positioning itself as a potential
bridge between Islam and the West.161
Democracy is increasingly a component of Indonesia’s engagement with its external environment.
Indonesia launched the Bali Democracy Forum in November 2008 with the aim of “promoting
regional and international cooperation in the field of democracy.” The Bali Forum is taking an
inclusive approach that brings together democracies as well as those “aspiring to be more
democratic.” The forum is to act as a platform for countries to “exchange ideas and knowledge
and share experience and best practices.”162 Indonesia also established the Institute for Peace and
Democracy at the University of Udayana on Bali to support the initiative. Indonesia has also
160 “Indonesians Demand Ban on Sect,” BBC News, April 20, 2008.
161 Rizal Sukma, “Indonesia’s Foreign Policy Since Reformasi: Change and Continuity,” CSIS Southeast Asia Bulletin,
June 2008.
162 “The Bali Democracy Forum Inauguration,” Institute for Peace and Democracy, November 9-11, 2008.
Congressional Research Service
28
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
supported the new ASEAN Charter, which is supportive of democratic development and human
rights.
Regional Dynamics
Indonesia’s large population of 240 million, its strategic location, and its political leadership have
established its central place in Southeast Asia. The strategically vital Straits of Malacca are
located to the north and east of the Indonesian island of Sumatra. Indonesia has been playing a
larger strategic role in the region under the leadership of President Yudhoyono. While Indonesia
plays a key role within ASEAN, ASEAN as a group continues to seek a central role in shaping the
evolving strategic and economic architectures of Asia through such groups as the East Asian
Summit. Some have speculated that Indonesia may be reaching a point in its development where
it will begin to look beyond ASEAN in formulating its foreign policy stance. Indonesia is
increasingly active in multilateral fora such as the OIC and the G-20.163
Australia
Indonesia’s geographic proximity to Australia makes its bilateral relationship with Australia a key
one for Indonesia. Indonesia signed the Timor Gap Treaty with Australia in 1991. The treaty
provided for a mutual sharing of resources located in the seabed between Australia and the then-
Indonesian province of East Timor. This lapsed with the independence of East Timor. Australia
and Indonesia also signed a security agreement in 1995 that fell short of an alliance but called for
mutual consultations on security matters. Indonesian displeasure with Australia’s support of East
Timor independence in 1999 led Indonesia to renounce the agreement. Indonesian ties with
Australia have at times been strained over alleged human rights abuses by the TNI. Indonesia and
Australia have cooperated in the area of counterterrorism in recent years. Indonesia and Australia
signed a new security pact in 2006, known as the Lombok Treaty, which came into force in
2008.164
China
In 1990 Indonesia and China normalized ties, which had been strained since the alleged abortive
coup by the Indonesian Communist Party (PKI) in 1965. China’s claim to the South China Sea
(SCS) extends to the southern reach of the SCS near Indonesia’s the Natuna Islands. President
Yudhoyono traveled to Beijing in 2005 and signed a strategic agreement with Chinese President
Hu Jintao.165 In June 2008, Zhou Yongkang, a Member of the Standing Committee of the Political
Bureau of the Communist Party of China Central Committee stated that China wanted to push
forward the strategic partnership with Indonesia and further promote the growth of bilateral
relations between Indonesia and China while he was visiting Jakarta.166 Chinese investments in
Indonesia, particularly in the energy and mineral realms, have grown markedly in recent years. In
2010, ties between China and Southeast Asia, including Indonesia, appeared to cool somewhat as
compared to the earlier period of China’s ‘charm offensive’ with the region.
163 Barry Desker, “Is Indonesia Foreign Policy Looking Beyond ASEAN?” The Korea Herald, October 2, 2010.
164 “Australia-Indonesia Security Pact Comes Into Force,” Agence France Presse, February 6, 2008.
165 “Indonesia: International Relations and Defense,” The Economist Intelligence Unit, May 27, 2008.
166 “Senior CPC Leader Vows to Enhance Cooperation with Indonesia,” Xinhua News Agency, June 18, 2008.
Congressional Research Service
29
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Security and economic ties between Indonesia and China are developing. While there have been
historical tensions and mistrust, Indonesia’s development of military to military relations with
China appears to have been motivated by a desire to diversify its defense and arms procurement
relationships at a time when the United States was sanctioning Indonesia for past human rights
abuses by the Indonesian military. Indonesia’s enthusiasm for developing ties with China has
apparently lessened somewhat as confidence in the relationship with the United States has
improved. Nevertheless, Indonesia will likely seek to maintain a diversified set of defense and
arms relationships that may continue to include China, as well as Russia and other Western states.
Trade and investment between Indonesia and China has increased substantially in recent years.
China recently pledged to increase direct foreign investment and to increase trade with Indonesia
to $50 billion by 2014. Bilateral trade between the two states was $25.5 billion in 2009. Direct
investment over the past four years by China has totaled $265.5 million.167
Malaysia
Indonesia’s and Malaysia’s key recent border disputes have been largely maritime in nature. Both
claimed Sipadan and Ligitan Islands in the Celebes Sea which the International Court of Justice
ruled in Malaysia’s favor. Dispute continues over the Ambalat sea bloc also in the Celebes Sea.
Tensions between Indonesia and Malaysia flared in May 2009 over conflicting maritime claims to
the oil-rich waters near their border between Kalimantan and Sabah in the Celebes Sea. A Naval
confrontation occurred in May 2009. The two nations had a similar naval confrontation in March
2005 over the area. Both Indonesia and Malaysia have granted concessions to Shell, Unocal, and
the Italian oil and gas firm ENI SPA in the disputed region.168 Indonesia deployed troops to the
border in September, 2010, and later announced plans to deploy a tank battalion to the Malaysian
border in response to tensions in 2010. Indonesia will reinforce its military assets in the border
region of Kodam XII in Bengkayang District, considered to be a pivotal point in West
Kalimantan.169
United States-Indonesian Relations
U.S. Geopolitical and Strategic Interests
The Malacca, Sunda, and Lombok straits are some of the world’s most important strategic sea
lanes. Close to half of the total global merchant fleet capacity transits the straits around
Indonesia.170 A significant proportion of Northeast Asia’s energy resources transit these straits.
The United States continues to have both economic and military interest in keeping the sea lanes
167 “Chinese Eye $50 Billion Stake in Indonesia,” The Jakarta Post, June 28, 2010.
168 “Indonesia, Malaysia Face Off at Sea,” Asia Sentinel, May 29, 2009.
169 “TNI Sends Troops to the Indonesia-Malaysia Border,” Indonesia News September 4, 2010. “Army to Deploy Tank
Battalion Near Malaysian Border,” BBC News, September 28, 2010.
170 Ed Masters, Report of the National Commission on U.S. Indonesian Relations (Seattle: National Bureau of Asian
Research, 2003).
Congressional Research Service
30
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
of communication open.171 The waters around Indonesia have had some of the highest incidents
of piracy in the world. Further energy deposits may also be found in the waters of Southeast Asia.
China’s relations with Indonesia and Southeast Asia have shifted over the years. China was
perceived as being assertive in the 1990s, for example, by fortifying a disputed shoal in the South
China Sea known as Mischief Reef. China however subsequently developed a more
accommodative approach to Southeast Asia known to many as its “charm offensive” and agreed
to a regional code of conduct in the South China Sea in 2002. China also signed a Joint
Declaration on Strategic Partnership with ASEAN in October 2003 and initiated a China-ASEAN
Free Trade Agreement to augment its existing bilateral trade agreements with many ASEAN
members.172 More recently, China’s relations with Indonesia and the region appear to have
reached limits as regional states now appear to have concerns over what some see as increased
assertiveness by China, and Indonesia in particular has voiced worries about the impact of
Chinese competition on many of its domestic industries. China is also expanding its naval
capability which is of concern to some.
U.S. Assistance to Indonesia
The bilateral comprehensive partnership between the United States and Indonesia provides a
framework for the U.S. assistance program for Indonesia. U.S. assistance is focused on several
key areas including “basic and higher education; forestry; marine and fisheries management;
clean energy and climate change; regional security and stability; government service delivery;
health services; and employment.”173 Other priorities of U.S. assistance include support for the
further development of democracy in Indonesia, support for the rule of law and human rights,
maternal and child health, and support for economic growth through the development of trade,
investment, and infrastructure.
171 John Noer with David Gregory, Chokepoint: Maritime Economic Concerns in Southeast Asia (Washington:
National Defense University Press, 1996).
172 Edward Masters, House Committee on International Relations, Subcommittee on Asia and the Pacific, Testimony
for a Hearing on the United States and Asia: Continuity, Instability, and Transition, March 17, 2004.
173 “FY2011 Congressional Budget Justification for Foreign Operations,” U.S. Department of State, released May
2010.
Congressional Research Service
31
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Table 2. U.S. Foreign Assistance to Indonesia
(in thousands of dollars)
Account
FY2008
FY2009
FY2010 est.
FY2011 req
CSHa
$25,737 $30,500 36,950 36,950
CSH-State
250 5,250 5,250 5,250
DA
70,953 71,000 71,000 142,886
ESF 64,474
126,500
65,000
0
FMF
12,872 15,700 20,000 22,000
IMET
1,037 1,547 1,750 1,800
INCLE
6,150 6,150 11,570 11,570
NADR
5,117 6,450 6,650 7,000
Total
186,590 263,097 218,170 227,456
Source: “FY2011 Congressional Budget Justification for Foreign Operations,” U.S. Department of State,
released May 2010.
a. Child Survival and Health (CSH), Development Assistance (DA), Economic Support Funds (ESF), Foreign
Military Financing (FMF), International Military Education and Training (IMET), International Narcotics
Control and Law Enforcement (INCLE), Non-proliferation Anti-terrorism Demining and Related Programs
Export Control and Border Security Assistance NADR-EXBS, Non-proliferation Anti-terrorism Demining
and Related Programs Antiterrorism Assistance (NADR-ATA).
Security Assistance
The State Department FY2011 Budget Justification for Foreign Operations anticipates continued
support to Indonesia with counterterrorism including developing Detachment 88 counterterrorism
skills and points out that U.S. assistance will also “strengthen Indonesia’s leading role in regional
peace and security.” Indonesia has participated in the Regional Defense Counter Terrorism
Fellowship Program, which includes intelligence cooperation, civil-military cooperation in
combating terrorism and maritime security. Indonesia has also participated in the Theater Security
Cooperation Program with the U.S. Pacific Command. This has involved Indonesia in
counterterrorism seminars promoting cooperation on security as well as subject matter expert
exchanges.174
Military-to-military ties between the United States and Indonesia have ebbed and flowed since
the 1950s. This has been conditioned by both the disposition of the regime in Jakarta to the
United States and by U.S. perceptions of the TNI’s record on human rights. A significant
relationship was established by the 1960s. This was expanded in the wake of Sukarno’s demise.
The Administration’s policy on assistance to Indonesia is informed by the role that Indonesia
plays in the war against terror in Southeast Asia. U.S.-Indonesian counterterror capacity building
programs have included funds for the establishment of a national police counterterrorism unit and
for counterterrorism training for police and security officials. Such assistance has also included
financial intelligence unit training to strengthen anti-money laundering, counterterror intelligence
analysts training, an analyst exchange program with the Treasury Department, and training and
assistance to establish a border security system as part of the Terrorist Interdiction Program.175 A
174 “United States-Indonesia Military Relations,” Congressional Record, Senate, Page S734, February 1, 2005.
175 Information drawn from State Department Fact Sheet, “Summary of Counter Terrorism Assistance for Indonesia,”
(continued...)
Congressional Research Service
32
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
major accomplishment of these programs is the increasing capabilities of Detachment 88, an elite
counterterrorism unit that has received assistance from the United States and Australia.
Detachment 88 has been responsible for tracking down scores of JI cadre, including Azahari bin
Husin, Zarkasih, and Abu Dujana.176
The United States is promoting counterterrorism in Southeast Asia on a regional and multilateral
basis as well as on a bilateral basis with Indonesia. Such an approach is viewed as complementing
and promoting bilateral assistance and focuses on diplomatic, financial, law enforcement,
intelligence and military tools. Two key objectives of the U.S. government are to build the
capacity and will of regional states to fight terror. These objectives are pursued through a number
of programs. The United States-ASEAN Work Plan for Counter-Terrorism has identified
information sharing, enhancing liaison relationships, capacity building through training and
education, transportation, maritime security, border and immigration controls, and compliance
with United Nations and international conventions, as goals for enhanced regional anti-terrorism
cooperation.
The Anti-Terrorism Assistance Program, directed at law enforcement training and associated
hardware, has aided Indonesia, among others. In addition, Financial Systems Assessment Teams
and the Terrorist Interdiction Program (which focuses on border controls) have also assisted
Indonesia. The United States has also supported the Southeast Asian Regional Center for Counter-
terrorism in Kuala Lumpur. Foreign Emergency Support Teams are designed for rapid
deployment in response to a terrorist related event while Technical Support Working Groups work
with regional partners to find technical solutions to problems such as bio-terrorism warning
sensors.177
Observations
Many observers believe the present offers a unique moment for a significant expansion and
deepening of bilateral relations with Indonesia that could have broader implications for the
evolving correlates of power in Asia as well as for U.S. engagement with ASEAN and with
Muslim nations. Such observers often argue that Indonesia has since 2004 made dramatic
progress in developing its democracy and civil society even as some reform issues remain to be
resolved. Others remain focused on human rights abuses by the Indonesian military. Although
most of these date back to 1999 or before, concern remains over Indonesian security forces
conduct in West Papua. In this way, decision makers’ approaches to Indonesia will likely involve
a consideration of a mix of U.S. foreign and strategic policy interests with regard to Indonesia.
These may include consideration of possible tradeoffs between a foreign policy approach that
stresses the promotion of human rights and those that seeks to strengthen bilateral ties in order to
assist in the struggle against violent Islamist extremists and to promote U.S. geopolitical interests.
(...continued)
October 2003 update.
176 Tom McCawley, “Indonesia’s terrorist hunt bears fruit,” Christian Science Monitor, June 15, 2007.
177 Drawn from State Department budget justification material.
Congressional Research Service
33
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Figure 1. Map of Indonesia
Source: Map Resources. Adapted by CRS.
CRS-34
Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests
Author Contact Information
Bruce Vaughn
Specialist in Asian Affairs
bvaughn@crs.loc.gov, 7-3144
Congressional Research Service
35