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Indonesia

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Indonesia country brief

Bilateral relations

Overview

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 the embassy in Jakarta and consulates in Bali, Surabaya and Makassar.

The bilateral relationship is underpinned by regular high-level meetings. These include the Indonesia-Australia Annual Leaders' Meeting, the Foreign and Defence Ministers' 2+2 Meeting, the Ministerial Council on Law and Security, and the Economic, Trade and Investment Ministers’ meeting.

Former Foreign Minister Marise Payne and Defence Minister Peter Dutton most recently visited Indonesia for the 2+2 Foreign and Defence Ministers Meeting on 9 September 2021. Key outcomes of the meeting include signing MOUs on cyber and emerging cyber technology cooperation, trilateral cooperation in the Pacific, and a renewed Counter Terrorism MOU; the signing of a renewed Defence Cooperation Arrangement to support the growing operational complexity of our defence partnership; and agreement to increase defence education links and commitment to support Indonesian peacekeeping efforts. Ministers discussed important global and regional issues including Afghanistan and Myanmar and Australia’s strong commitment to supporting Indonesia during the pandemic and in its economic recovery.

On 29 September 2021, then Trade, Tourism and Investment Minister Dan Tehan visited Jakarta to meet his Indonesian trade and investment counterparts to highlight the mutual benefits of strengthening our economic relationship. Then Minister Tehan also co-hosted the inaugural Indonesia-Australia CEO Roundtable with the Indonesian Minister for Trade, Muhammad Lutfi.

Australia and Indonesia work closely on a range of common strategic interests in regional and global fora. We are the only two members from the Southeast Asia region in the G20 and cooperate in the East Asia Summit (EAS), ASEAN Regional Forum, Indian Ocean Rim Association (IORA) and Mexico, Indonesia, Republic of Korea, Turkey and Australia (MIKTA).

Since taking office in 2014, President Joko Widodo has visited Australia four times. He attended the G20 Summit in Brisbane in 2014, made his first state visit to Australia in 2017, 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.

Prime Minister Scott Morrison's first overseas visit as Leader was to Indonesia in August/September 2018 where he and President Widodo elevated relations to a Comprehensive Strategic Partnership (CSP) and announced the conclusion of negotiations on the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

The Australia-Indonesia CSP coalesces bilateral cooperation around five broad pillars

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

A Plan of Action for the CSP was signed during President Widodo’s visit to Australia in February 2020.

The President’s visit also foreshadowed closer engagement on the emerging COVID‑19 crisis, including the announcement of a new health security partnership.

Trade Ministers signed the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in Jakarta in March 2019 and the agreement entered into force on 5 July 2020, opening new markets and opportunities for Australian businesses, primary producers, service providers and investors.

Complementing IA-CEPA, the September 2021 Blueprint for Trade and Investment with Indonesia aims to assist Australian companies to take advantage of IA-CEPA and deepen their engagement with Indonesia.

High-level visits

Recent bilateral visits include:

  • Then Minister for Trade, Tourism and Investment Dan Tehan visited Indonesia to meet with his Indonesian trade and investment counterparts, host the inaugural CEO Roundtable, and launch the Blueprint for Trade and Investment with Indonesia in September 2021.
  • Former Foreign Minister Marise Payne and Defence Minister Peter Dutton visited Indonesia for the 2+2 Foreign and Defence Ministers Meeting in September 2021
  • President Widodo visited Australia as a Guest of Government in February 2020
  • Former Minister for Foreign Affairs and Former Minister for Women Marise Payne met with her counterpart, Minister of Foreign Affairs Retno Marsudi in Bali in December 2019 at the Bali Democracy Forum and for the 2+2 Foreign and Defence Ministers’ Meeting
  • Former Minister for Foreign Affairs and Former Minister for Women Marise Payne met with Minister of Foreign Affairs Retno Marsudi during the G20 Foreign Ministers’ Meeting in Japan in November 2019
  • Prime Minister Scott Morrison met President Widodo at the East Asia Summit on 4 November 2019
  • Prime Minister Scott Morrison attended the inauguration of President Widodo on 20 October 2019 and also had a bilateral meeting with President Widodo
  • Former Minister for Foreign Affairs and Former Minister for Women Marise Payne attended the High-Level Dialogue on Indo-Pacific Cooperation in Jakarta on 20 March 2019 hosted by her counterpart, Minister of Foreign Affairs Retno Marsudi
  • Minister for Trade, Tourism and Investment Simon Birmingham met with his counterpart Trade Minister Lukita Enggartiasto to sign the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in Jakarta on 4 March 2019

Strategic and security cooperation

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. A Defence Cooperation Arrangement was signed in 2012 and an updated arrangement signed in February 2018 to enhance defence cooperation on shared security challenges.

Maritime cooperation

Australia and Indonesia share the world's longest maritime boundary and are natural maritime partners. Maritime cooperation is one of five pillars in the Australia-Indonesia Comprehensive Strategic Partnership and its Plan of Action (2020-2024) Foreign Ministers signed a Joint Declaration on Maritime Cooperation [PDF 117 KB] in February 2017 to drive expansion of cooperation.

A Maritime Cooperation Plan of Action [PDF 554 KB] to implement this declaration was signed in March 2018. The  focus areas of our cooperation under the Plans include strengthened maritime domain awareness and maritime border protection; improved information sharing to combat transnational crime; greater regional and coastal interconnectivity; improved reliability and efficiency of shipping in the region; and more sustainable management of marine resources.

At the 2+2 Foreign and Defence Ministers Meeting held in September 2021, Ministers committed to build on successful bilateral passage exercises and coordinated patrols conducted by the Royal Australian Navy and the Indonesian Navy (TNI‑AL).

Cooperation on counter-terrorism

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 (CBRNE) materials.

A renewed Memorandum of Understanding on Countering Terrorism and Violent Extremism was signed at the fifth Australia-Indonesia bilateral counter-terrorism consultations in Yogyakarta in December 2018 and will underpin counter-terrorism cooperation with Indonesia to 2021. At the 2+2 Foreign and Defence Ministers Meeting held in September 2021, Ministers welcomed the signing of the renewal of the Memorandum of Understanding on Counter Terrorism.

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.

Cooperation on combatting people smuggling

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

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. The Third Australia-Indonesia Cyber Policy Dialogue took place in September 2020. At the 2+2 Foreign and Defence Ministers Meeting held in September 2021, Ministers welcomed the signing of Memorandum of Understanding on Cyber and Emerging Cyber Technology Cooperation.

Multilateral Cooperation

At the 2+2 Foreign and Defence Ministers Meeting held in September 2021 Ministers recognised the value of working cooperatively with other regional partners and in multilateral forums. They committed to enhanced trilateral cooperation with Pacific nations through the signing of a Memorandum of Understanding on Trilateral Cooperation with the Pacific. Ministers also agreed to work together in the United Nations, Asia-Pacific Economic Cooperation (APEC), and Indian Ocean Rim Association (IORA), to address shared challenges and ensure these institutions are effective, open and transparent.

Trade and investment

While COVID-19 has suppressed economic activity in the short-term, economic forecasters still predict that Indonesia will become a top-5 global economy – adjusted for purchasing power parity – within the next two or three decades.

There is considerable opportunity for Australia to expand its trade, investment and economic cooperation relationship with Indonesia, the world’s fastest growing consumer market after China and India.

Demand in Indonesia for consumer goods and services — particularly for premium food and beverages, education and healthcare, financial and ICT services and tourism — and its ambitious infrastructure investment agenda aligns well with Australian industry capabilities.

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

The IA-CEPA Economic Cooperation Program Katalis is a government-backed Indonesia-Australia business development program helping to realise complementary commercial opportunities between countries.

The Association of Southeast Asian Nations-Australia-New Zealand Free Trade Area (AANZFTA) has reduced a wide range of tariffs on trade between Australia and Indonesia. Australia and Indonesia have  both signed the Regional Comprehensive Economic Partnership (RCEP), which will build on the outcomes of AANZFTA to promote further growth in the region.

To assist Australian companies to deepen their engagement with Indonesia, the Australian government has produced a Blueprint for Trade and Investment with Indonesia.

Development cooperation

Australia has reshaped our development partnership to work with Indonesia to respond to the challenges posed by the COVID-19 pandemic. Our approach is outlined in the Indonesia COVID-19 Development Response Plan.  

Australia and Indonesia have a long and proud history of supporting each other in times of need, and we have a shared commitment to combatting COVID-19 together. Our development partnership is helping Indonesia to maximise the effectiveness of its national response efforts. We are responding to Indonesia’s priorities as set by its Committee for the Handling of COVID-19 and National Economic Recovery, and in its National Medium-term Development Plan.

Australia and Indonesia’s strong ongoing cooperation in response to COVID-19 was recognised by Foreign Ministers and Defence Ministers at the 2021 2+2 meetings, including opportunities for increased collaboration in heath security through the Australia-Indonesia Health Security Partnership (AIHSP).

Former Foreign Minister Payne announced during her visit to Indonesia in September 2021 the expansion of the Australian-Indonesia COVID-19 partnership through a further commitment of $13 million for enhanced local health responses and community resilience, through partnerships with NGOs, UN agencies, community organisations and provincial governments.  This support builds on the immediate COVID-19 health package for Indonesia announced by former Foreign Minister Payne in July 2021 that is delivering critical medical equipment and supplies to help front line medical staff provide life-saving assistance. Australia has also committed to share 2.5 million vaccine doses with Indonesia in 2021.

Building on the foundations of our Comprehensive Strategic Partnership, we are working across the Australian Government, using diplomacy, and our economic, defence and security partnerships, to ensure our development efforts have the greatest impact. We will leverage the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) to contribute to our mutual economic recovery through trade and investment.

Our support to Indonesia is structured around the three pillars of our COVID-19 Development Response Plan – health security, stability and economic recovery. Across our work we focus on advancing gender equality and empowering women and girls, including the most vulnerable and marginalised groups, such as people with disabilities.

Education

Indonesia and Australia enjoy a strong relationship in education. Prior to the disruptions caused by the COVID-19 Pandemic, Indonesia was one of the most popular destinations for students under the Australian Government's New Colombo Plan, an initiative to encourage young Australians to study and undertake internships in the Indo-Pacific region. Since 2014, the New Colombo Plan has awarded over 9,400 scholarships and mobility grants for Australian undergraduates to undertake study and work-based experiences in Indonesia.

Australia has been supporting education reform in Indonesia for many years through the development cooperation program. From 2011-2017, we supported Indonesia to construct more than 3,000 junior secondary schools across Indonesia, providing around 495,000 new places for children in disadvantaged areas. Currently, Australia is providing support to improve foundational skills in basic education (school years 1-9), and supporting Indonesia’s COVID-19 response in the education sector, including their ‘learning from home’ policy, and school reopening and district readiness.

The Australia Awards program aims to support Indonesia’s development through the positive contributions of Australian qualified professionals and by strengthening the relationship between Australia and Indonesia. Since 1953, more than 11,500 Indonesians have received scholarships to study at Australian tertiary institutions.

The Building Relationships through Intercultural Dialogue and Growing Engagement (BRIDGE) Project, established in 2008 by the Australia-Indonesia Institute, uses technology to build links between Australian and Indonesian teachers and students. The project has established 189 school partnerships, directly involving 780 Australian and Indonesian teachers.

People-to-people links

People-to-people links are an important component of the bilateral relationship with Indonesia. Through cultural, sporting and educational engagement and tourism, Australian and Indonesian people and communities enhance their mutual understanding of each other.

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

Programs have been affected by health risks from the COVID-19 pandemic and the significant disruptions in global travel, but will pick up again in 2022.

Australia-Indonesia Institute

The Australia-Indonesia Institute, established in 1989, promotes greater mutual understanding and contact between Australians and Indonesians. Its flagship programs have included BRIDGE, the Australia-Indonesia Youth Exchange Program (AIYEP) and the Muslim Exchange Program (MEP). The Australia-Indonesia Institute also runs public grant rounds, which fund innovative programs in arts and culture, education, technology and innovation, civil society and media, and religion. The COVID-19 Special Grants Round supported 18 grants targeting online activities and other forms of engagement that build cross-cultural linkages but do not require travel.

Indonesia-Australia Dialogue

The Indonesia-Australia Dialogue (IAD) is a second track activity that facilitates people-to-people links and discussion on a broad range of topics covering domestic, regional and global issues and opportunities for closer engagement in business, culture, education, science and technology.

The fourth IAD was held in in Sydney in April 2018 and explored new ways to deepen and expand people-to-people links. It drew together high-calibre delegations from both countries and was co-convened by the Honourable John Anderson AO and former Indonesian Ambassador to Australia Hamzah Thayeb. The next IAD will be hosted by Indonesia.

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