Updated December 4, 2020
Indonesia
Overview
on the Law of the Sea (UNCLOS), supporting an UNCLOS
With 270 million citizens, Indonesia is the most populous
ruling that criticized aspects of China’s maritime claims and
country in Southeast Asia, the world’s most populous
behavior in the region.
Muslim-majority nation, and the world’s third-largest
democracy (after India and the United States). It has the
Political Background
world’s 16th-largest economy and the 10th-largest when
President Widodo, universally known by his nickname
ranked by purchasing power parity. It straddles important
“Jokowi,” was reelected in April 2019 elections, winning
sea lanes and borders the Strait of Malacca, one of the
55% of the popular vote. He campaigned on promises to
world’s busiest trade routes, as well as the Indian Ocean
improve Indonesia’s infrastructure and raise living
and the South China Sea.
standards, particularly in underdeveloped areas. He has
delivered on some of those promises, enacting several
Over the past two decades, Indonesia has become a robust
economic reform packages aimed at streamlining
democracy, holding four direct presidential elections, each
bureaucratic processes to boost foreign and domestic
considered by international observers to have been largely
investment. However, poverty and uneven economic
free and fair. In the most recent, held in April 2019,
development remain major issues. Indonesia has been hit
President Joko Widodo was reelected to a second five-year
hard by the COVID-19 pandemic, with over 430,000 cases
term. The U.S.-Indonesia security relationship has
as of early November 2020, the largest number in Southeast
broadened in recent years, with closer military and
Asia. Indonesia also has Southeast Asia’s second highest
counterterrorism cooperation and a range of new
COVID-19 mortality rate, after the Philippines.
educational, environmental, and energy initiatives that were
initiated in the Obama Administration. However,
Indonesia’s foreign policy is guided by its historical role as
a leader of the Non-Aligned Movement, and successive
Indonesian governments have bristled at the notion of
aligning too closely with the United States or with others,
including China. Indonesia is an active member in regional
diplomatic institutions and a leader of the Association of
Southeast Asian Nations (ASEAN), which has a Secretariat
based in Jakarta.
Some 87% of Indonesians are Muslim, with the vast
majority subscribing to moderate, syncretic forms of the
religion. Religious diversity is enshrined in the constitution.
Some observers, however, express concern about growing
political influence of conservative religious groups who
have organized mass demonstrations against non-Muslim
politicians. Indonesia also has a recent history of violent
extremism: several bombings in Jakarta and tourist center
Bali targeted Westerners in the 2000s, and the persistence
of smaller-scale attacks raises concerns about the dangers
posed by Indonesians returning from the Middle East.
Indonesia is increasingly involved in rising South China
Sea tensions. Although the two nations do not dispute

sovereignty over any land features, China’s extensive nine-
Some observers have bristled at Widodo’s willingness to
dash line claims overlap with Indonesia’s Exclusive
bring authoritarian and conservative Islamist voices into his
Economic Zone (EEZ), the coastal area over which a state
coalition. Defense Minister Prabowo Subianto, a former
has the right to regulate economic activity. Indonesian
Army Special Forces Commander, was implicated in a
authorities have periodically confronted or warned off
range of human rights violations in the 1990s. Vice
Chinese fishing and law-enforcement vessels seen as
President Ma’ruf Amin, a conservative Islamic leader, was
encroaching on Indonesian waters. In 2017, Indonesia
chosen at least in part to quell criticism from some Islamic
elicited a formal diplomatic protest from Beijing by
groups that Widodo’s government is not sufficiently
renaming waters off the Natuna Islands, north of Borneo,
conservative. Such criticism has been a thorn in Widodo’s
the North Natuna Sea. In May 2020, Jakarta angered China
side throughout his presidency, particularly in 2016-2017,
with a formal submission to the United Nations Convention
when Basuki Tjahaja Purmama, a political ally who is an
ethnically Chinese Christian, was charged and convicted of
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Indonesia
blasphemy for a comment he allegedly made about the
favorable demographics (66% of its population is of
Koran at a campaign rally.
working age). It is a large producer of natural gas and oil,
and is a member of the Organization of the Petroleum
U.S. Engagement with Indonesia
Exporting Countries. It is also the world’s leading exporter
The United States engages Indonesia across a wide range of
of palm oil. Still, about half of Indonesian households are
issues, encouraging Indonesians to deepen their democratic
near the national poverty line of $24.40 per month. Despite
institutions, promote religious tolerance and the rule of law,
its large population, Indonesia is the 26th largest U.S.
develop a more liberal trade and investment climate,
trading partner, ranking below neighbors such as Singapore,
combat terrorism, and engage on international issues such
Malaysia, and Thailand. Over recent years, Indonesia has
as maritime security and climate change. In October 2015,
imposed some policies criticized by foreign investors,
the United States and Indonesia upgraded their bilateral
including foreign ownership restrictions and local content
“Comprehensive Partnership” to a “Strategic Partnership,”
requirements in some industries, as well as renegotiation of
with a minister-level dialogue intended to address maritime
contracts for some energy and mining projects. President
cooperation, defense cooperation, economic growth and
Widodo has sought to lift bureaucratic obstacles facing
development, energy cooperation, cooperation on global
foreign direct investment (FDI), and has actively courted
and regional issues, and people-to-people ties. U.S.
more FDI, particularly in the infrastructure sector.
assistance to Indonesia totaled an estimated $132 million in
FY2019. Most U.S. assistance supports health,
Human Rights Issues
environmental, and educational initiatives. Indonesia is part
Most observers believe Indonesian human rights protections
of the Indo-Pacific Maritime Security Initiative, which aims
have improved over the past 15 years. However, abuses still
to strengthen Naval and Coast Guard capabilities in the
occur, including some by members of the military. Alleged
region.
abuses are particularly frequent in areas with simmering
secessionist movements such as Papua. Some argue that
Security Cooperation
religious intolerance is rising. Islamist organizations have
U.S.-Indonesia security cooperation has deepened over the
harassed and attacked minority religious groups, including
past decade, with the two militaries regularly conducting
Christians and other Islamic sects, such as the Shia and
around 170 annual engagements, including efforts to
Ahmadiyya, and, in 2016, large demonstrations by Islamist
deepen maritime security cooperation and to combat
groups opposed to Jakarta’s Christian governor raised
terrorism. This represents a sharp change from the early
concerns about creeping intolerance.
2000s, when U.S. policies enacted in response to earlier
human rights abuses by Indonesian forces severely limited
Indonesia is labeled a Tier 2 nation in the State
bilateral engagements. In 1999, Congress suspended all
Department’s 2020 Trafficking in Persons report, which
International Military Education and Training (IMET)
reported that it “does not fully meet the minimum standards
programs with Indonesia after Indonesia’s military and its
for the elimination of trafficking but is making significant
militia proxies killed over 1,000 in Timor-Leste following
efforts to do so.” Corruption is widespread: Transparency
Timor’s vote to pursue independence from Indonesia.
International ranked Indonesia 85th out of 180 nations in its
Programs were restarted on a limited basis in 2002 and,
2019 Corruption Perceptions Index, below other Asian
from 2005 to 2010, the United States largely normalized
nations such as China and India. However, many observers
military relations. In 2010, the U.S. resumed limited IMET
believe that Indonesia’s democratic development and the
programs with the Kopassus special forces and in 2018,
growth of its independent press and civil society have
then-Defense Secretary Jim Mattis voiced his intention to
created a more accountable system in which people can
continue strengthening ties, including with Kopassus.
choose their leaders and participate in policymaking
through community or nongovernmental organizations.
Militancy and Terrorism
Indonesia has had a long-running issue of domestic
Environmental Issues
militancy, and the Islamic State (IS) has raised concerns
Indonesia is among the world’s most bio-diverse regions,
among many in Indonesia by conducting recruiting in
but its record of environmental protection is constrained by
Bahasa Indonesia, Indonesia’s national language. In May
weak rule of law and poor land management. Because of
2018, a set of suicide attacks in Surabaya killed 12
deforestation, Indonesia is a major emitter of greenhouse
civilians, with at least one attack conducted by a family that
gases—the world’s third or fourth largest when emissions
had recently been deported from Syria. Indonesia amended
from deforestation are taken into account. Illegal logging
its 2003 Anti-Terrorism Law following the Surabaya
remains rampant. In the 1960s, forests covered 82% of
attacks, lengthening periods in which suspects can be
Indonesia; today, they cover 49%. Extensive wildfires
detained without charge and broadening police rights to
cause severe air pollution each year. The United States
prosecute those who join or recruit for militant groups.
conducts numerous environmental and clean energy
U.S.-Indonesia counterterrorism cooperation is close; the
programs in Indonesia. A $600 million Millennium
United States and Australia helped to create Indonesia’s
Challenge Corporation (MCC) compact concluded in 2018,
elite counterterrorism unit, Densus-88, which has weakened
with about $332 million devoted to a “Green Prosperity”
militant groups such as Jemaah Islamiyah (JI), an al-Qaeda
program aimed at renewable energy and land management.
affiliate responsible for several bombings in the 2000s.
Economic Issues
Ben Dolven, Specialist in Asian Affairs
In recent years, Indonesia’s economy has frequently posted
IF10247
growth of more than 5%-6% annually, buoyed in part by its
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Indonesia


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https://crsreports.congress.gov | IF10247 · VERSION 10 · UPDATED

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