Updated March 5, 2024
Indonesia
Overview
Natuna Islands, north of Borneo, the North Natuna Sea.
With over 279 million citizens, Indonesia is the most
More recently, Chinese Coast Guard vessels reportedly
populous country in Southeast Asia, the world’s most
have harassed Indonesian energy exploration vessels in the
populous Muslim-majority nation, and the world’s third-
South China Sea more frequently, and have accompanied
largest democracy (after India and the United States). It has
fleets of Chinese fishing vessels into Indonesia’s EEZ.
the world’s 16th-largest economy—the 7th-largest when
ranked by purchasing power parity. It straddles vital sea
Political Background
lanes and borders the Strait of Malacca, one of the world’s
On February 14, 2024, over 200 million Indonesians voted
busiest trade routes, as well as the Indian Ocean and the
in presidential, parliamentary, and local elections—the
South China Sea. Over the past 25 years, Indonesia has
world’s largest one-day democratic exercise—and appear to
become a robust democracy, holding five direct presidential
have selected Defense Minister Prabowo as president,
elections, each considered by international observers to
according to historically accurate exit polling. If the results
have been largely free and fair. In the most recent, held in
are confirmed, Prabowo would become president in
February 2024, early results indicate that Defense Minister
October. Prabowo, the son-in-law of the country’s former
Prabowo Subianto had won and would succeed President
authoritarian president Suharto, is a former general who
Joko Widodo when his term ends in October. Prabowo’s
was removed from the military in 1998 for allegedly
Vice Presidential running mate was Widodo’s eldest son,
torturing political activists, and who was implicated in 1999
Gibran Rakabuming Raka.
violence in Timor-Leste. A scion of a wealthy Indonesian
family, Prabowo campaigned on promises to continue the
The U.S.-Indonesia relationship has broadened in recent
economic development policies of President Widodo, who
years, with closer military and counterterrorism cooperation
remains popular.
and a range of new educational, environmental, and energy
programs initiated during the Obama 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 others,
including China. Indonesia is an active member in regional
diplomatic institutions, and served as the 2022 chair of the
Group of 20 (G-20) nations and the 2023 chair of the
Association of Southeast Asian Nations (ASEAN).
Some 87% of Indonesians are Muslim, with the vast
majority subscribing to moderate, syncretic forms of Sunni
Islam. Religious diversity is enshrined in the constitution.
Some observers, however, express concern about growing
political influence of conservative religious groups. Non-
Sunni Muslims and other religious minorities have been
targets of violence, and some conservative groups have
organized mass demonstrations against non-Muslim
politicians. Indonesia also has a 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
President Widodo, universally known by his nickname
“Jokowi,” tacitly supported Prabowo’s campaign, and many
sovereignty over any land features, China’s extensive
“
analysts expect the new government to continue Widodo’s
nine-dash line” claims overlap with Indonesia’s Exclusive
populist focus on economic development. One of Widodo’s
Economic Zone (EEZ), the coastal area over which a state
signature initiatives is a plan to move Indonesia’s capital
has the right to regulate economic activity. Indonesian
from Jakarta to East Kalimantan, on the island of Borneo.
authorities periodically confront or warn off Chinese
fishing and law-enforcement vessels seen as encroaching on
Widodo has enacted several economic reform packages
aimed at streamlining bureaucratic processes to boost
Indonesian waters. In 2017, Indonesia elicited a formal
foreign and domestic investment. Poverty and uneven
diplomatic protest from Beijing by renaming waters off the
economic development remain major issues.
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Indonesia
U.S. Engagement with Indonesia
supplier to the large economies of Northeast Asia, including
The United States engages Indonesia across a wide range of
Japan, South Korea, and China. It is also the world’s
issues, encouraging Indonesians to deepen their democratic
leading exporter of palm oil. Despite its large population,
institutions, promote religious tolerance and the rule of law,
Indonesia is the 24th-largest U.S. trading partner, ranking
develop a more liberal trade and investment climate,
below neighbors such as Singapore, Malaysia, and
combat terrorism, and engage on international issues such
Thailand. Bilateral trade totaled $47.5 billion in 2022.
as maritime security and climate change. In 2023, the
United States and Indonesia upgraded their bilateral
Indonesia has imposed some policies criticized by foreign
“Strategic Partnership” to a “Comprehensive Strategic
investors, including foreign ownership restrictions and local
Partnership,” continuing minister-level dialogues intended
content requirements in some industries, and has forced
to address maritime cooperation, defense cooperation,
renegotiation of contracts for some energy and mining
economic growth and development, energy cooperation,
projects. President Widodo has actively courted FDI,
cooperation on global and regional issues, and people-to-
particularly in the infrastructure sector. U.S. investment in
people ties. Most U.S. assistance supports health,
Indonesia totaled $11.9 billion in 2022.
environmental, and educational initiatives. Indonesia is part
of the Indo-Pacific Maritime Security Initiative, which aims
Human Rights Issues
to strengthen Naval and Coast Guard capabilities in the
Most observers say Indonesian human rights protections
region. In 2022, the two countries finalized several
have improved over the past 15 years. However, abuses still
agreements, including a $698 million Millennium
occur, including some by members of the military. Alleged
Challenge Compact supporting climate-conscious
abuses are particularly frequent in areas with simmering
infrastructure development, as well as pacts on Coast Guard
secessionist movements such as Papua. Some analysts
capacity building and support for sustainable fishing,
argue that religious intolerance is rising. Islamist
marine biodiversity, and reducing plastic pollution.
organizations have harassed and attacked minority religious
groups, including Christians and other Islamic sects, such as
Security Cooperation
the Shia and Ahmadiyya. In 2016, large demonstrations by
U.S.-Indonesia security cooperation has deepened over the
Islamist groups opposed to Jakarta’s Christian governor
past decade, with the two militaries conducting around 170
raised concerns about creeping intolerance.
annual engagements, including on maritime security
cooperation and combatting terrorism. This represents a
The State Department’s 2023 Trafficking in Persons report
sharp change from the early 2000s, when U.S. policies
listed Indonesia as a Tier 2 nation and reported it “does not
enacted in response to earlier human rights abuses by
fully meet the minimum standards for the elimination of
Indonesian forces severely limited bilateral engagements. In
trafficking but is making significant efforts to do so.”
1999, Congress suspended all International Military
Corruption is relatively widespread: Transparency
Education and Training (IMET) programs with Indonesia
International ranked Indonesia 110th out of 180 nations in
after Indonesia’s military, particularly the Kopassus special
its 2022 Corruption Perceptions Index, below other Asian
forces—headed at the time by Defense Minister Prabowo—
nations such as China and India. However, many observers
and militia proxies killed over 1,000 in Timor-Leste
say Indonesia’s democratic system and its growing
following Timor’s vote to pursue independence from
independent press and civil society are creating a more
Indonesia. Programs were restarted on a limited basis in
accountable system in which people can choose their
2002 and, from 2005 to 2010, the United States largely
leaders and participate in policymaking through community
normalized military relations. In 2010, the United States
or nongovernmental organizations.
resumed limited IMET programs with Kopassus.
Environmental Issues
Militancy and Terrorism
The United States conducts numerous environmental and
Indonesia has had a long-running issue of domestic
clean energy programs in Indonesia, which is among the
militancy, and the Islamic State (IS) has raised concerns
world’s most biodiverse countries. In 2022, the United
among many in Indonesia by conducting recruiting in
States, Japan, and Indonesia announced a Just Energy
Bahasa Indonesia, Indonesia’s national language. In 2018,
Transition Partnership (JETP), aimed at accelerating private
Indonesia amended its 2003 Anti-Terrorism Law,
investment in sustainable energy. Indonesia has made some
lengthening periods for which suspects can be detained
progress on environmental issues such as deforestation, but
without charge and broadening police rights to prosecute
its record of environmental protection is constrained by
those who join or recruit for militant groups. U.S.-Indonesia
weak rule of law and poor land management. Because of
counterterrorism cooperation is close; the United States and
deforestation, Indonesia is a major emitter of greenhouse
Australia helped to create Indonesia’s elite counterterrorism
gases—the world’s third- or fourth-largest when emissions
unit, Densus-88, which has weakened militant groups such
from deforestation are considered. Illegal logging remains
as Jemaah Islamiyah (JI), an Al Qaeda affiliate responsible
rampant. In the 1960s, forests covered 82% of Indonesia;
for several bombings in the 2000s.
today, they cover 49%. Extensive wildfires cause severe air
pollution each year. Climate change has led to recurrent
Economic Issues
poor harvests. In 2022, Indonesia twice instituted palm oil
In recent years, Indonesia’s economy has frequently posted
export bans, increasing the global costs of cooking oil.
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, as
well as critical minerals including nickel, and a major
IF10247
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Indonesia


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https://crsreports.congress.gov | IF10247 · VERSION 51 · UPDATED

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