Updated April 7, 2022
Indonesia
Overview
on the Law of the Sea (UNCLOS), supporting an UNCLOS
With over 270 million citizens, Indonesia is the most
ruling that criticized aspects of China’s maritime claims and
populous country in Southeast Asia, the world’s most
behavior in the region.
populous Muslim-majority nation, and the world’s third-
largest democracy (after India and the United States). It has
Political Background
the 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 6 million cases
term. The U.S.-Indonesia relationship has broadened in
as of March 30, 2022, the largest number in Southeast Asia.
recent years, with closer military and counterterrorism
Indonesia also has Southeast Asia’s second highest
cooperation and a range of new educational, environmental,
COVID-19 mortality rate, after the Philippines. About 58%
and energy initiatives that were initiated in the Obama
of the population was fully vaccinated as of late March
Administration. However, Indonesia’s foreign policy is
2022.
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. It
chairs the Group of 20 (G-20) in 2022.
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-
dash line claims overlap with Indonesia’s Exclusive

Economic Zone (EEZ), the coastal area over which a state
Some observers have bristled at Widodo’s willingness to
has the right to regulate economic activity. Indonesian
bring authoritarian and conservative Islamist voices into his
authorities have periodically confronted or warned off
coalition. Defense Minister Prabowo Subianto, a former
Chinese fishing and law-enforcement vessels seen as
Army Special Forces Commander, was implicated in a
encroaching on Indonesian waters. In 2017, Indonesia
range of human rights violations in the 1990s. Vice
elicited a formal diplomatic protest from Beijing by
President Ma’ruf Amin, a conservative Islamic leader, was
renaming waters off the Natuna Islands, north of Borneo,
chosen at least in part to quell criticism from some Islamic
the North Natuna Sea. In May 2020, Jakarta angered China
groups that Widodo’s government is not sufficiently
with a formal submission to the United Nations Convention
conservative. Such criticism has been a thorn in Widodo’s
side throughout his presidency, particularly in 2016-2017,
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Indonesia
when Basuki Tjahaja Purmama, a political ally who is an
Economic Issues
ethnically Chinese Christian, was charged and convicted of
In recent years, Indonesia’s economy has frequently posted
blasphemy for a comment he allegedly made about the
growth of more than 5%-6% annually, buoyed in part by its
Quran at a campaign rally.
favorable demographics (66% of its population is of
working age). It is a large producer of natural gas and oil,
U.S. Engagement with Indonesia
and a major supplier to the large economies of Northeast
The United States engages Indonesia across a wide range of
Asia, including Japan, South Korea, and China. It is also the
issues, encouraging Indonesians to deepen their democratic
world’s leading exporter of palm oil. Still, about half of
institutions, promote religious tolerance and the rule of law,
Indonesian households are near the national poverty line of
develop a more liberal trade and investment climate,
$24.40 per month. Despite its large population, Indonesia is
combat terrorism, and engage on international issues such
the 26th largest U.S. trading partner, ranking below
as maritime security and climate change. In October 2015,
neighbors such as Singapore, Malaysia, and Thailand. In
the United States and Indonesia upgraded their bilateral
recent years, Indonesia has imposed some policies criticized
“Comprehensive Partnership” to a “Strategic Partnership,”
by foreign investors, including foreign ownership
with a minister-level dialogue intended to address maritime
restrictions and local content requirements in some
cooperation, defense cooperation, economic growth and
industries, as well as renegotiation of contracts for some
development, energy cooperation, cooperation on global
energy and mining projects. President Widodo has sought
and regional issues, and people-to-people ties. Most U.S.
to lift bureaucratic obstacles facing foreign direct
assistance supports health, environmental, and educational
investment (FDI), and has actively courted more FDI,
initiatives. Indonesia is part of the Indo-Pacific Maritime
particularly in the infrastructure sector.
Security Initiative, which aims to strengthen Naval and
Coast Guard capabilities in the region. In December 2021,
Human Rights Issues
the United States and Indonesia signed MOUs on maritime
Most observers believe Indonesian human rights protections
cooperation, education, and the reestablishment of a Peace
have improved over the past 15 years. However, abuses still
Corps program in Indonesia.
occur, including some by members of the military. Alleged
abuses are particularly frequent in areas with simmering
Security Cooperation
secessionist movements such as Papua. Some argue that
U.S.-Indonesia security cooperation has deepened over the
religious intolerance is rising. Islamist organizations have
past decade, with the two militaries regularly conducting
harassed and attacked minority religious groups, including
around 170 annual engagements, including efforts to
Christians and other Islamic sects, such as the Shia and
deepen maritime security cooperation and to combat
Ahmadiyya, and, in 2016, large demonstrations by Islamist
terrorism. This represents a sharp change from the early
groups opposed to Jakarta’s Christian governor raised
2000s, when U.S. policies enacted in response to earlier
concerns about creeping intolerance.
human rights abuses by Indonesian forces severely limited
bilateral engagements. In 1999, Congress suspended all
Indonesia is labeled a Tier 2 nation in the State
International Military Education and Training (IMET)
Department’s 2021 Trafficking in Persons report, which
programs with Indonesia after Indonesia’s military and its
reported that it “does not fully meet the minimum standards
militia proxies killed over 1,000 in Timor-Leste following
for the elimination of trafficking but is making significant
Timor’s vote to pursue independence from Indonesia.
efforts to do so.” Corruption is relatively widespread:
Programs were restarted on a limited basis in 2002 and,
Transparency International ranked Indonesia 96th out of 180
from 2005 to 2010, the United States largely normalized
nations in its 2021 Corruption Perceptions Index, below
military relations. In 2010, the U.S. resumed limited IMET
other Asian nations such as China and India. However,
programs with the Kopassus special forces.
many observers believe that Indonesia’s democratic system
and the growth of its independent press and civil society
Militancy and Terrorism
have created a more accountable system in which people
Indonesia has had a long-running issue of domestic
can choose their leaders and participate in policymaking
militancy, and the Islamic State (IS) has raised concerns
through community or nongovernmental organizations.
among many in Indonesia by conducting recruiting in
Bahasa Indonesia, Indonesia’s national language. In May
Environmental Issues
2018, a set of suicide attacks in Surabaya killed 12
Indonesia is among the world’s most biodiverse regions,
civilians, with at least one attack conducted by a family that
but its record of environmental protection is constrained by
had recently been deported from Syria. Indonesia amended
weak rule of law and poor land management. Because of
its 2003 Anti-Terrorism Law following the Surabaya
deforestation, Indonesia is a major emitter of greenhouse
attacks, lengthening periods in which suspects can be
gases—the world’s third or fourth largest when emissions
detained without charge and broadening police rights to
from deforestation are taken into account. Illegal logging
prosecute those who join or recruit for militant groups.
remains rampant. In the 1960s, forests covered 82% of
U.S.-Indonesia counterterrorism cooperation is close; the
Indonesia; today, they cover 49%. Extensive wildfires
United States and Australia helped to create Indonesia’s
cause severe air pollution each year. The United States
elite counterterrorism unit, Densus-88, which has weakened
conducts numerous environmental and clean energy
militant groups such as Jemaah Islamiyah (JI), an Al Qaeda
programs in Indonesia. A $600 million Millennium
affiliate responsible for several bombings in the 2000s.
Challenge Corporation (MCC) compact concluded in 2018,
with about $332 million devoted to a “Green Prosperity”
program aimed at renewable energy and land management.
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Indonesia

IF10247
Ben Dolven, Specialist in Asian Affairs


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https://crsreports.congress.gov | IF10247 · VERSION 12 · UPDATED

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