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.
The bilateral 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; Economic Policy Dialogue and the Ministerial Energy Dialogue.
The most recent Annual Leaders’ Meeting was held in Indonesia on 6 June 2022. Prime Minister Anthony Albanese was accompanied by Foreign Minister Penny Wong, Trade and Tourism Minister Don Farrell, Industry and Science Minister Ed Husic, and Mr Luke Gosling OAM MP. An Australian business leaders delegation also joined to discuss trade and investment opportunities.
During his visit, the Prime Minister discussed the bilateral relationship, trade and investment, regional and global interests and cooperation on climate and energy. In the Prime Minister and President’s joint statement, leaders discussed new opportunities to deepen collaboration on climate change, including the Australian Government’s proposed $200 million climate and infrastructure partnership with Indonesia.
The seventh 2+2 Foreign and Defence Ministers’ Meeting was held on 9 September 2021. Key outcomes of the 2+2 meeting include memorandums of understanding (MOUs) on cyber and emerging cyber technology cooperation, trilateral cooperation in the Pacific, renewed counter-terrorism MOU; 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.
Australia and Indonesia work closely on a range of common strategic interests in regional and global fora. We cooperate closely with Indonesia in the G20, the East Asia Summit (EAS), ASEAN Regional Forum, Indian Ocean Rim Association (IORA) and Mexico, Indonesia, Republic of Korea, Türkiye and Australia (MIKTA). Australia is supporting Indonesia’s priorities as G20 President in 2022 and Chair of ASEAN in 2023.
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. The 2020 visit focused on the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).
The Australia-Indonesia relationship was elevated to a Comprehensive Strategic Partnership (CSP) in 2018. The CSP 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.
A Plan of Action for the CSP was signed during President Widodo’s visit to Australia in February 2020.
There has been a return to a steady tempo of two-way visits by Australian and Indonesian Ministers as border restrictions relaxed and with Indonesia’s G20 Presidency in 2022. Recent bilateral visits include:
- Australian Assistant Minister for Foreign Affairs Tim Watts attended a commemorative ceremony at the Australian Consulate-General in Bali for the 20th anniversary of the Bali bombings on 12 October 2022.
- Indonesian Minister of Finance Sri Mulyani Indrawati visited Australia to participate in the Economic Policy Dialogue in September 2022.
- Australian Assistant Minister for Trade Tim Ayres attended the G20 Tourism Ministers’ Meeting and the G20 Agriculture Ministers’ Meeting in Indonesia in September 2022.
- Australian Assistant Minister for Foreign Affairs Tim Watts attended the G20 Digital Economy Ministers’ Meeting in Indonesia in August 2022.
- Australian Minister for Early Childhood Education and Minister for Youth, Dr Anne Aly attended the G20 Education Ministers’ Meeting in August 2022.
- Australian Climate Change and Energy Minister Chris Bowen and Environment Minister Tanya Plibersek attended the G20 Climate and Environment Ministerial Meeting in August 2022. Minister Bowen also attended the G20 Energy Transition Ministerial Meeting and the inaugural Australia-Indonesia Ministerial Energy Dialogue.
- Australian Minister for Women Katy Gallagher visited Indonesia for the G20 Ministerial Conference on Women’s Empowerment in August 2022.
- Indonesian Minister for Energy and Mineral Resources visited Australia for the Sydney Energy Forum in July 2022.
- Australian Treasurer Jim Chalmers attended the G20 Finance Ministers and Central Bank Governors Meeting in Indonesia in July 2022.
- Australian Agriculture Minister Murray Watt visited Indonesia in July 2022.
- Australian Foreign Minister Penny Wong attended the G20 Foreign Ministers’ Meeting in Indonesia in July 2022.
- Indonesian Tourism and Creative Economy Minister Sandiaga Uno visited Australia in March 2022.
- Former Treasurer Josh Frydenberg visited Indonesia for the G20 Finance Ministers’ and Central Bank Governors Meeting in February 2022.
- Former Minister for Agriculture and Northern Australia David Littleproud visited Indonesia in January 2022 in which he signed the MoU on Agricultural Cooperation.
- Former Minister for Foreign Affairs and Former Minister for Women Marise Payne visited Indonesia in November 2021.
- Former Minister for Trade, Tourism and Investment Dan Tehan visited Indonesia to launch the Blueprint for Trade and Investment with Indonesia in September 2021.
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.
A Defence Cooperation Arrangement was signed in 2012 and an updated arrangement signed in February 2018 to enhance defence cooperation on shared security challenges. At the 2+2 Foreign and Defence Ministers Meeting in September 2021 Defence Ministers signed a renewed Defence Cooperation Arrangement to support the growing operational complexity of our defence partnership.
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 and a Maritime Cooperation Plan of Action [PDF 555 KB] to implement this declaration (2018). 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.
At the 2021 2+2 Foreign and Defence Ministers Meeting, Ministers committed to build on successful bilateral passage exercises and coordinated patrols conducted by the Royal Australian Navy and the Indonesian Navy.
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.
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 Sydney on 12 April 2022.
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.
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. A Memorandum of Understanding on Cyber and Emerging Cyber Technology Cooperation was signed in September 2021.
Australia and Indonesia are committed to working cooperatively with other regional partners and in multilateral forums. A Memorandum of Understanding on Trilateral Cooperation with the Pacific was signed in September 2021. Australia and Indonesia have 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
Economic forecasters predict that Indonesia will become a top five 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 relationship with Indonesia, one of the world’s fastest growing consumer markets.
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 Australian Government is committed to strengthening our trade and investment relationship with Indonesia. The Blueprint for Trade and Investment with Indonesia provides practical guidance for Australian businesses considering market opportunities in Indonesia. It helps Australian business take advantage of complementarities between the two economies – Australia has goods, expertise and know-how which align with Indonesia's major economic priorities.
Indonesia is an important market for Australian exports, and our minerals, energy, agricultural and livestock products support Indonesia’s continuing economic growth and expanding industrial base. Our two-way services exports in education and tourism contribute to economic growth and people-to-people links.
The Assistant Treasurer 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.
Trade and investment agreements
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) creates the framework for a new era of closer economic engagement between Australia and Indonesia. IA-CEPA entered into force on 5 July 2020. IA-CEPA opens new markets and opportunities for businesses, primary producers, service providers and investors.
Katalis is a government-backed business development program unlocking the potential of economic partnership between Australia and Indonesia. Established under the IA-CEPA Economic Cooperation Program, 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.
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.
Australia is committed to supporting Indonesia to recover from COVID-19 and tackle climate change. 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 worked with Indonesia to overcome the shared challenges of COVID-19. As part of our support during the COVID-19 pandemic, Australia has delivered 8.4 million vaccines from our own supply to Indonesia.
An updated version of the Australia-Indonesia Memorandum of Understanding on Health Cooperation, originally in place since 1992, between the Australian Department of Health and the Ministry of Health of the Republic of Indonesia was signed in February 2022.
Australia and Indonesia further reinforced our strong ongoing cooperation in response to COVID-19 by accelerating the roll-out and scaling up support through the Australia-Indonesia Health Security Partnership (AIHSP) in September 2021.
The Australian Government announced in September 2021 the expansion of the Australia-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 in July 2021 that is delivering critical medical equipment and supplies to help front line medical staff provide life-saving assistance.
Building on the foundations of our CSP, 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 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.
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 10,700 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) Program, 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.
People connections 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 mutual understanding.
Links between schools, exchanges, visits and scholarships provide an important foundation for engagement. Organisations including Asia Education Foundation, Australia-Indonesia Centre, Australia‑Indonesia Youth Association and student associations play a key role in building these links.
The Australia-Indonesia Institute (AII), established in 1989, is the department’s longest standing bilateral institute, promoting greater mutual understanding and contact between Australians and Indonesians.
The Indonesia-Australia Dialogue (IAD) is a 1.5 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.