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Indonesia

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Indonesia country brief

Indonesia — the world’s third largest democracy with the world’s largest Muslim population — is one of Australia’s most important bilateral relationships. We enjoy extensive cooperation including on strategic, economic, security, development and education issues. Australia’s diplomatic network in Indonesia includes our embassy in Jakarta and consulates-general in Bali, Surabaya and Makassar.

Bilateral relations

Indonesia is a vitally important partner for Australia. The Australia-Indonesia bilateral relationship was elevated to a Comprehensive Strategic Partnership (CSP) in 2018. The CPS coalesces bilateral cooperation around five broad pillars:

  • enhanced economic and development partnership
  • connecting people
  • securing our and the region's shared interests
  • maritime cooperation
  • contributing to Indo-Pacific security and prosperity.

The relationship is underpinned by regular high-level meetings. These include the Indonesia-Australia Annual Leaders' Meeting; Foreign and Defence Ministers' 2+2 Meeting; Ministerial Council on Law and Security; Economic, Trade and Investment Ministers' Meeting (ETIMM); the Economic Policy Dialogue and the Ministerial Energy Dialogue.

The most recent Annual Leaders' Meeting was held in Australia on 4 July 2023. Prime Minister Anthony Albanese was accompanied by Foreign Minister Penny Wong, Education Minister Jason Clare, and Industry and Science Minister Ed Husic. In the Joint Communique, leaders discussed new proposals  to increase economic integration and two-way investment, as well as enabling more Australian and Indonesian professionals to work in each country. Additionally, Australia has expanded access to visas for Indonesian business travellers.

The Prime Minister made further commitments on 8 September 2023 while in Jakarta for the 3rd Annual ASEAN-Australia Summit and the 18th East Asia Summit, announcing:

  • a bilateral mechanism to advance cooperation on Indonesia's electric vehicle cooperation
  • the second tranche of funding under the $200 million Climate and Infrastructure Partnership, including $50 million to de-risk private infrastructure projects through the Private Infrastructure Development Group (PIDG), and $100 million to support Indonesia's just energy transition. This is in addition to the $50 million announced at the 2022 Annual Leaders' Meeting to unlock private sector investment through Australian Development Investments (ADI).

The eighth 2+2 Foreign and Defence Ministers' Meeting was held on 9 February 2023. Key outcomes of the 2+2 meeting included announcing an intent to upgrade our Defence Cooperation Arrangement to a treaty-level Defence Cooperation Agreement, enhanced cooperation in trade and investment, and further cooperation to advance Women, Peace and Security initiatives in the region. Ministers also discussed important global and regional issues including Ukraine and Myanmar.

Since taking office in 2014, President Joko Widodo has visited Australia five times. He attended the G20 Summit in Brisbane in 2014, made state visits to Australia in 2017 and 2023, attended the ASEAN-Australia Special Summit in Sydney in March 2018, and visited Australia as a Guest of Government in February 2020 when he addressed the Australian Parliament.

High-level visits

There has been a high tempo of two-way visits by Australian and Indonesian Ministers with Indonesia's G20 Presidency in 2022 and as ASEAN Chair in 2023. Recent bilateral visits include:

  • Australian Assistant Trade Minister Tim Ayres visited Jakarta in January 2024.
  • Indonesian Finance Minister Sri Mulyani visited Canberra in December 2023.
  • Australian Education Minister Jason Clare visited Surabaya in November 2023.
  • Australian Deputy Prime Minister and Defence Minister Richard Marles visited Jakarta in November 2023.
  • Australian Industry and Science Minister Ed Husic visited Jakarta in November 2023.
  • Indonesian Deputy Defence Minister Muhammad Herindra visited Canberra and Melbourne in October 2023.
  • Australian Prime Minister Albanese visited Jakarta in September 2023.
  • Australian Foreign Minister Penny Wong visited Jakarta in September 2023.
  • Australian Assistant Foreign Minister Tim Watts visited Semarang, Bali and Surabaya in August 2023.
  • Australian Foreign Minister Penny Wong visited Jakarta in July 2023.
  • Indonesian President Widodo visited Sydney in July 2023, accompanied by Trade Minister Zulkifli Hasan, Foreign Minister Retno Marsudi, Investment Minister Bahlil Lahadalia, Minister of the State Secretariat Prakitno, and Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaintan.
  • Indonesian Vice Finance Minister Suahasil Nazara visited Canberra in July 2023.
  • Australian Deputy Prime Minister and Defence Minister Richard Marles visited Jakarta in June 2023.
  • Indonesian Vice Trade Minister Dr Jerry Sambuaga visited Canberra in May 2023.
  • Indonesian Minister for Political, Legal, and Security Affairs Mahfud MD visited Melbourne in March 2023.
  • Indonesian Minister for Foreign Affairs Retno Marsudi visited Canberra and Adelaide in February 2023.
  • Indonesian Minister for Defence Prabowo Subianto visited Canberra in February 2023.
  • Indonesian Minister of Law and Human Rights Yasonna Laoly visited Adelaide in February 2023.
  • Indonesian Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan visited Perth in February 2023.

Defence and security

Cooperation between Australia and Indonesia on security matters is underpinned by the Lombok Treaty (2006). Both countries reaffirmed their commitment to strengthening bilateral relations in 2014 by signing a Joint Understanding on the implementation of the Lombok Treaty, which provides an agreed approach to enhancing intelligence cooperation.

Australia's defence relationship with Indonesia is strong. We conduct around 20 exercises a year. Areas of focus include education and training, maritime security, humanitarian assistance, and peacekeeping.

Our current Defence Cooperation Arrangement signed in 2012, was updated in September 2021. In February 2023, Australian and Indonesian Defence Ministers jointly announced an intent to upgrade this arrangement to a Defence Cooperation Agreement that is binding under international law.

Maritime cooperation

Australia and Indonesia share the world's longest maritime boundary and are naturally close maritime partners. Maritime cooperation is one of the five pillars of the Australia-Indonesia CSP and its Plan of Action (2020-2024).

This builds on the Joint Declaration on Maritime Cooperation [PDF 120 KB] signed by Foreign Ministers in February 2017 to drive expansion of cooperation. The focus areas of our cooperation under the Plans include strengthened maritime domain awareness and maritime border protection; combatting illegal, unreported and unregulated fishing; improved information sharing to combat transnational crime; greater regional and coastal interconnectivity; improved reliability and efficiency of shipping in the region; maritime connectivity and the blue economy; maritime safety; and more sustainable management of marine resources, among many more.

Counter-terrorism cooperation

Australian and Indonesian authorities have cooperated closely to detect and deter terrorist attacks in Indonesia since the 2002 Bali bombings. Our counter-terrorism cooperation now involves a wide range of partnerships in law enforcement, legal framework development, criminal justice, counter-terrorism financing, countering violent extremism, defence, transport and border security, intelligence, and the security of chemical, biological, radiological, nuclear and explosive materials.

In October 2022, Australia and Indonesia jointly commemorated the 20th anniversary of the Bali Bombings. A renewal of the Memorandum of Understanding on Counter Terrorism and Violent Extremism was signed in September 2021. The MOU is supported by regular Australia-Indonesia Counter-Terrorism Consultations, last held in Canberra on 14 September 2023.

The Jakarta Centre for Law Enforcement Cooperation (JCLEC), a joint Australia-Indonesia initiative, has become an important regional centre for law enforcement training. More than 28,000 officials from 80 countries have completed training at JCLEC on addressing transnational crimes including terrorism, human trafficking and cybercrime.

Combatting people smuggling cooperation

Australia and Indonesia work closely together to combat people smuggling and human trafficking, including by co-chairing the Bali Process on People Smuggling, Trafficking in Persons and Related Transnational Crime. We strongly support cooperative measures with Indonesia to improve border integrity and enforcement. We also continue to work with our regional partners to combat people smuggling and human trafficking, by strengthening legal frameworks and boosting the capabilities of criminal justice agencies and civil society organisations.

Cyber cooperation

Australia and Indonesia recognise the important role of an open, secure, stable, accessible and peaceful cyber space in driving economic growth, enhancing national security and fostering international stability.

On 12 December 2023, Australia and Indonesia held Cyber Senior Officials Talks in Canberra where an extension of the Australia-Indonesia bilateral Memorandum of Understanding on Cyber and Emerging Cyber Technology Cooperation was signed.

Multilateral and regional cooperation

Australia and Indonesia work closely on a range of common strategic interests in multilateral and regional fora. We cooperate closely with Indonesia in the UN, Asia-Pacific Economic Cooperation (APEC), G20, the East Asia Summit (EAS), ASEAN Regional Forum, Indian Ocean Rim Association (IORA) and the grouping of Mexico, Indonesia, Republic of Korea, Türkiye and Australia, known as MIKTA. We are collaborating in the development of the Indo-Pacific Economic Framework (IPEF). Further, a Memorandum of Understanding on Trilateral Cooperation with the Pacific was signed in September 2021.

We are also supporting Indonesia's ambition to join the Organisation of Economic Co-operation and Development (OECD). Australia supported Indonesia's priorities as Chair of ASEAN and the East Asia Summit in 2023 and will host a Special Summit in March 2024 to celebrate 50 years since Australia became ASEAN's first Dialogue Partner.

Trade and investment

Australia enjoys promising levels of trade with Indonesia. As Indonesia develops its industrial sector it will increasingly demand Australian commodities, as well as financial, mining and ICT services. Indonesia's growing consumer market is also looking to Australia for food and beverages, health care, education, tourism and other quality Australian exports.

In 2022-23 Indonesia was our 13th largest two-way trading partner by value ($26.2 billion) and our 9th largest export market ($15.7 billion). Leading Australian exports include wheat, coal, and gold. Exports grew 25.9 per cent in 2022-23. Indonesia was Australia's largest market for live animals (excluding seafood), and our second largest market for wheat and cotton.

We have seen a strong post-pandemic recovery in our services trade with Indonesia. In 2022-23, Australian service exports to Indonesia (mostly Indonesian students at our universities) rose in value to over $2 billion – well above pre-pandemic figures. The value of Indonesian service imports (predominantly Australian tourists visiting Indonesia) rose to $4.9 billion.

Attracting foreign investment is a priority of the Indonesian government.  Indonesia's economy is the world's 17th largest economy and grew an estimated 5.0 per cent in 2023.   Indonesia's favourable macroeconomic trends, demographic fundamentals and economic policy settings may present opportunities to Australian investors.

In 2022 Australian investment in Indonesian stocks totalled $3.09 billion, and Indonesian investment in Australian stocks totalled 805 million.  Assistant Treasurer Stephen Jones and the Hon Greg Combet led a delegation of investors to Indonesia and Singapore in August 2022. This delegation of large superannuation funds and their advisors explored the prospects for greater Australian investment in our region.

The Australia-Indonesia Partnership for Economic Development (PROSPERA) assists Indonesian economic institutions to implement policies that contribute to strong, sustainable and inclusive economic growth.

Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA)

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) creates the framework for closer economic engagement between Australia and Indonesia. IA-CEPA entered into force on 5 July 2020 and opens new markets and opportunities for businesses, primary producers, service providers and investors.

Established under IA-CEPA, Katalis is a government-backed business development program unlocking the potential of economic partnership between Australia and Indonesia. Katalis takes a commercially oriented approach to maximising the benefits of IA-CEPA for Indonesia and Australia through improved market access, increased two-way trade and investment, and inclusive economic growth.

Also as part of IA-CEPA, the Indonesia-Australia Skills Development Exchange (SDE) Pilot gives businesses from Australia and Indonesia the opportunity to send employees to undertake workplace placements for up to twelve months in the other country. The Pilot aims to provide an opportunity for participants to develop their own workplace skills while strengthening cooperation and understanding between Australia and Indonesia. Through building strong people-to people links, the Pilot will equip participants with the cultural competency and global perspective necessary to make the most of the opportunities offered by an increasingly interconnected world.

Other trade agreements Australia has with Indonesia include the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) and the Regional Comprehensive Economic Partnership Agreement (RCEP). AANZFTA has reduced a wide range of tariffs on trade between Australia and Indonesia. RCEP builds on the outcomes of AANZFTA to promote further growth in the region.

Development cooperation

Australia's development partnership in 2023-24 (estimated $326.1 million) provides support to Indonesia in areas where there is bilateral alignment, a clear need, and where we can make a meaningful difference together in areas such as climate change, economic governance, education, health, research and knowledge-sector partnerships.

We are designing the new Indonesia Development Partnership Plan (DPP) to set out development priorities for 2024-29 in line with the International Development Policy. The Indonesia DPP will be released in 2024 and has been prepared in consultation with government and non-government stakeholders in Indonesia and Australia. It will replace the Indonesia COVID-19 Development Response Plan. 

Integrating climate action into Australia's development assistance is a joint priority. The $200 million Climate and Infrastructure Partnership (2022-2027) will catalyse private investment into Indonesia's clean energy transition, facilitate the construction of green infrastructure in Indonesia, assist Indonesia to build a regulatory framework for a clean energy future, and help ensure that women, people with disabilities and other vulnerable groups are able to benefit in the transition to net-zero. 

Program highlights include:

  • Providing economic governance advice through PROSPERA ($259 million 2018-2026). 
  • Fostering people-to-people and strong institutional linkages through the Australia-Indonesia Knowledge Partnerships Platform KONEKSI ($50 million 2022-2027). 
  • Supporting the development of high-quality infrastructure projects through our infrastructure partnership, KIAT ($300 million 2017-2026). 
  • Driving reform on poverty alleviation through PROAKTIF ($30 million  2023-2025). 
  • Strengthening of learning outcomes for all children in Indonesia's basic education sector through INOVASI ($105 million 2016-2023). 

Education

Indonesia and Australia enjoy a strong relationship in education. 2023 marked 70 years of Australian scholarships to Indonesia. Since then, more than 200,000 Indonesians have studied in Australia. Indonesia remains the most popular host location for students under the Australian Government's New Colombo Plan, an initiative that supports Australian undergraduates to undertake study, language training and internships across the Indo-Pacific. Since 2014, 113 NCP scholarships and 12,559 NCP mobility grants have been awarded for Indonesia. This includes 11 scholarships and 608 mobility grants in the 2024 round.

Australia has supported education reform in Indonesia for many years through the development cooperation program. From 2011-2017, we supported Indonesia to build more than 3,000 junior secondary schools across Indonesia, providing around 495,000 new places for children in disadvantaged areas. Currently, through the Innovation for Indonesia's School Children Program (INOVASI), Australia provides support to improve learning outcomes for children in Indonesia's basic education sector. INOVASI focuses on the foundational skills of literacy, numeracy and character education. It seeks to identify and support changes to education practice, systems and policy, in areas that improve student learning outcomes. In addition, INOVASI has supported the Indonesian Government's response to COVID-19 by conducting studies on learning from home in different contexts, supporting the development and implementation of the emergency curriculum, and advising on the impact of the pandemic.

Australia Awards are prestigious, transformational scholarships and short courses offered to emerging leaders from developing countries for study, research and professional development in Australia and the region so they can return home and contribute to their nations' development, prosperity and resilience. Since 1953, more than 13,000 Indonesians have received short course and postgraduate scholarships to study at Australian tertiary institutions.

The BRIDGE Program (Building Relationships through Intercultural Dialogue and Growing Engagement), established in 2008 by the Australia-Indonesia Institute, uses technology to build links between Australian and Indonesian teachers and students. The project has established 200 school partnerships and has involved 800 Australian and Indonesian teachers.

Australian universities are growing their presence in Indonesia. Western Sydney University launched its new campus in Surabaya in November 2023. In January 2024, Deakin University, in collaboration with Lancaster University (United Kingdom), announced that it had received approval to open a campus in Bandung. This follows the success of Monash University, which opened its Jakarta campus in 2022.

People connections

People connections are an important component of the bilateral relationship with Indonesia. There are long-standing cultural, sporting education, and tourism connections.

Links between schools, exchanges, visits and scholarships provide an important foundation for engagement. Organisations including Asia Education Foundation, Australia-Indonesia Centre, ANU Indonesia Project, Australia-Indonesia Youth Association and student associations play a key role in building these links.

Established in 1989, the Australia-Indonesia Institute (AII) has a long history of fostering greater mutual understanding and amplifying Australia's standing in Indonesia. Through its programs and networks, AII contributions to a more broadly based and enduring relationship  facilitating increased contact between Australians and Indonesians and projecting positive images of Australia and Indonesia in each other's country.

AII flagship programs include:

  • the Australia-Indonesia Youth Exchange Program (AIYEP), established in 1982.
  • the Australia-Indonesia Muslim Exchange Program (AIMEP).
  • the Australia-Indonesia Institute Indonesian Studies Award.
  • the Elizabeth O'Neill Journalism Award.
  • the Australia-Indonesia Senior Editors' Program.
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