U.S. Relations With Indonesia
More information about Indonesia is available on the Indonesia Page and from other Department of State publications and other sources listed at the end of this fact sheet.
U.S.-Indonesia relations have taken on increasing importance. Indonesia is the world’s third largest democracy, has the largest Muslim-majority population, is the tenth-largest economy in the world by purchasing power, and possesses the world’s greatest marine biodiversity and its second greatest terrestrial biodiversity. Indonesia also borders the South China Sea, which has the world’s busiest sea lanes -- over $5 trillion in cargo and as much as 50 percent of the world’s oil tankers pass through the South China Sea every year. The United States was one of the first countries to establish diplomatic relations with Indonesia in 1949, following its independence from the Netherlands. Indonesia’s democratization and reform process since 1998 has increased its stability and security, and resulted in strengthened U.S.-Indonesia relations. The United States and Indonesia initiated in 2010 a Comprehensive Partnership to foster consistent high-level engagement on democracy and civil society, education, security, climate, maritime, energy, and trade issues, among others. Based on its success, in 2015 the two countries upgraded the relationship to the U.S.-Indonesia Strategic Partnership, extending cooperation to issues of regional and global significance.
Bilateral Economic Relations
Indonesia, the largest economy in Southeast Asia, has enjoyed steady economic growth over the past decade, averaging between 5-6 percent, with moderate inflation, rising foreign direct investment, and relatively low interest rates. Indonesia’s annual budget deficit is capped at 3 percent of GDP, and the Government of Indonesia lowered its debt-to-GDP ratio from a peak of 100 percent shortly after the Asian financial crisis in 1999 to less than 25 percent today. Indonesia’s growing middle class, strong domestic demand, large and youthful population, and need for new infrastructure makes it an important potential market for U.S. products and investment. U.S. bilateral goods trade with Indonesia totaled almost $27 billion in 2015, while bilateral trade in services with Indonesia exceeded $3 billion. Principal U.S. exports to Indonesia include transportation equipment, including aircraft, food and agricultural products, machinery and equipment, and chemicals. However, there are significant challenges to our bilateral economic relationship: the implementation of protectionist laws, limited infrastructure, and an unevenly applied legal structure.
Indonesia's Membership in International Organizations
Indonesia and the United States belong to a number of the same international organizations and forums, including the United Nations, ASEAN Regional Forum, the East Asia Summit, Asia-Pacific Economic Cooperation forum, G-20, International Monetary Fund, World Bank, and World Trade Organization. Indonesia also cooperates with the United States on issues of regional and global concern such as violent extremism, global peacekeeping operations, health pandemics, and climate change.
U.S. Assistance to Indonesia
Indonesia faces domestic development challenges; uneven benefits from democratic and economic progress; fragile institutions that lack capacity to adequately address its social service needs; and risks from climate change and environmental degradation. It is also home to 41 million people living below the international poverty line of $1.25 a day. Cooperation extends across a range of key development areas: strengthening education and professional ties, improving governance, strengthening health systems, advancing security, partnering on international issues, and supporting environmental stewardship. Both countries are committed to strengthening university partnerships and increasing the number of American and Indonesian students who study in each other’s country. Currently, approximately 8,000 Indonesians study in the United States, and 500 U.S. citizens study in Indonesia.
U.S. development assistance is delivered through the U.S. Agency for International Development (USAID) , Millennium Challenge Corporation and Peace Corps. USAID has been in Indonesia for over 60 years, enabling Indonesians to realize their full potential by partnering with Indonesians to become self-reliant, advanced, well governed, and prosperous. The innovative programming covers a five-year horizon valued at approximately $700 million in the heath, environment, education, and governance sectors. In 2013, the $600 million Millennium Challenge Corporation Compact entered into force with investments in renewable energy, maternal and child health, and Indonesia’s efforts to modernize its public procurement system. The Peace Corps works in underserved and rural schools and communities to help Indonesia reach its education development goals through grassroots people-to-people contact, cultural exchange, and technical skills transfer.
Indonesia has the third-largest area of tropical rainforest on the planet, with 131.3 million hectares – equivalent to 68% of its landmass – covered by forests. Indonesia is considered one of the world's top greenhouse gas emitters. The majority of Indonesia’s greenhouse gas emissions stem from land use activities and peat fires. U.S. assistance programming supports Indonesia’s goals of reducing greenhouse gas emissions through improved land use practices and increasing the amount of renewable energy generated as a proportion of Indonesia’s overall energy production.
Indonesia maintains an embassy in the United States at 2020 Massachusetts Avenue NW, Washington, DC 20036 (tel. 202-775-5200).
More information about Indonesia is available from the Department of State and other sources, some of which are listed here:
Department of State Indonesia Country Page
Department of State Key Officers List
USAID Indonesia Page
History of U.S. Relations With Indonesia
Human Rights Reports
International Religious Freedom Reports
Trafficking in Persons Reports
Millennium Challenge Corporation: Indonesia
Narcotics Control Reports
Investment Climate Statements
Office of the U.S. Trade Representative Countries Page
U.S. Census Bureau Foreign Trade Statistics
Export.gov International Offices Page
Library of Congress Country Studies