Updated July 26, 2022
Indonesia
Overview
shadowed or harassed Indonesian fishing and energy
With over 270 million citizens, Indonesia is the most
exploration vessels in contested waters.
populous country in Southeast Asia, the world’s most
populous Muslim-majority nation, and the world’s third-
Political Background
largest democracy (after India and the United States). It has
President Widodo, universally known by his nickname
the world’s 16th largest economy and the 10th largest when
“Jokowi,” was reelected in April 2019 elections, winning
ranked by purchasing power parity. It straddles important
55% of the popular vote. He campaigned on promises to
sea lanes and borders the Strait of Malacca, one of the
improve Indonesia’s infrastructure and raise living
world’s busiest trade routes, as well as the Indian Ocean
standards, particularly in underdeveloped areas. He has
and the South China Sea.
delivered on some of those promises, enacting several
economic reform packages aimed at streamlining
Over the past two decades, Indonesia has become a robust
bureaucratic processes to boost foreign and domestic
democracy, holding four direct presidential elections, each
investment. However, poverty and uneven economic
considered by international observers to have been largely
development remain major issues. Indonesia has been hit
free and fair. In the most recent, held in April 2019,
hard by the Coronavirus Disease 2019 (COVID-19)
President Joko Widodo was reelected to a second five-year
pandemic, with over 6 million cases reported as of July 22,
term. The U.S.-Indonesia relationship has broadened in
2022, the largest number in Southeast Asia. Indonesia also
recent years, with closer military and counterterrorism
has Southeast Asia’s second highest COVID-19 mortality
cooperation and a range of new educational, environmental,
rate, after the Philippines. About 62% of the population was
and energy initiatives initiated in the Obama
fully vaccinated as of late July 2022.
Administration. 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. It chairs the Group of 20
(G-20) in 2022. In June, President Widodo traveled to Kyiv
and Moscow, meeting with both Ukrainian President
Volodymyr Zelensky and Russian President Vladimir Putin.
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 smaller-scale
attacks have occurred periodically.
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, and Chinese vessels have regularly
side throughout his presidency.
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Indonesia
U.S. Engagement with Indonesia
Asia, including Japan, South Korea, and China. It is also the
The United States engages Indonesia across a wide range of
world’s leading exporter of palm oil. Still, about half of
issues, encouraging Indonesians to deepen their democratic
Indonesian households are near the national poverty line of
institutions, promote religious tolerance and the rule of law,
$24.40 per month. Despite its large population, Indonesia is
develop a more liberal trade and investment climate,
the 26th largest U.S. trading partner, ranking below
combat terrorism, and engage on international issues such
neighbors such as Singapore, Malaysia, and Thailand.
as maritime security and climate change. In October 2015,
Bilateral trade totaled nearly $37 billion in 2021.
the United States and Indonesia upgraded their bilateral
“Comprehensive Partnership” to a “Strategic Partnership,”
Indonesia has imposed some policies criticized by foreign
with a minister-level dialogue intended to address maritime
investors, including foreign ownership restrictions and local
cooperation, defense cooperation, economic growth and
content requirements in some industries, and has
development, energy cooperation, cooperation on global
renegotiated contracts for some energy and mining projects.
and regional issues, and people-to-people ties. Most U.S.
President Widodo has actively courted FDI, particularly in
assistance supports health, environmental, and educational
the infrastructure sector, and in 2021, U.S. investment in
initiatives. Indonesia is part of the Indo-Pacific Maritime
Indonesia increased 75% year-on-year, to $2.5 billion.
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 United States resumed
other Asian nations such as China and India. However,
limited IMET 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
The United States conducts numerous environmental and
civilians, with at least one attack conducted by a family that
clean energy programs in Indonesia, which is among the
had recently been deported from Syria. Indonesia amended
world’s most biodiverse countries. Indonesia’s record of
its 2003 Anti-Terrorism Law following the Surabaya
environmental protection is constrained by weak rule of law
attacks, lengthening periods for which suspects can be
and poor land management. Because of deforestation,
detained without charge and broadening police rights to
Indonesia is a major emitter of greenhouse gases—the
prosecute those who join or recruit for militant groups.
world’s third or fourth largest when emissions from
U.S.-Indonesia counterterrorism cooperation is close; the
deforestation are taken into account. Illegal logging remains
United States and Australia helped to create Indonesia’s
rampant. In the 1960s, forests covered 82% of Indonesia;
elite counterterrorism unit, Densus-88, which has weakened
today, they cover 49%. Extensive wildfires cause severe air
militant groups such as Jemaah Islamiyah (JI), an Al Qaeda
pollution each year. Climate change has led to recurrent
affiliate responsible for several bombings in the 2000s.
poor harvests. In 2022, Indonesia has twice instituted palm
oil export bans, increasing the global costs of cooking oil.
Economic Issues
In recent years, Indonesia’s economy has frequently posted
Rangel Fellow Matthew Eng contributed to this report.
growth of more than 5%-6% annually, buoyed in part by
favorable demographics (66% of its population is of
Ben Dolven, Specialist in Asian Affairs
working age). It is a large producer of natural gas and oil,
and a major supplier to the large economies of Northeast
IF10247
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Indonesia


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https://crsreports.congress.gov | IF10247 · VERSION 16 · UPDATED

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