More information about Indonesia is available on the Indonesia country page and from other Department of State publications and other sources listed at the end of this fact sheet.
Indonesia is a vital partner in the Indo-Pacific Region and U.S.-Indonesia relations have taken on increasing importance. Indonesia is the world’s third largest democracy, largest Muslim-majority country, the seventh-largest economy by purchasing power, and a leader in ASEAN. It 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, resilience and mitigation , maritime, energy, and trade issues, among others. Based on its success, in 2015, the two countries upgraded the relationship to the , extending cooperation to issues of regional and global significance.
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; economic inequality; and risks from environmental degradation. 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.
The partners with the Government of Indonesia, to advance shared economic and security interests to reinforce a stable, self-reliant and resilient Indonesia. Through results driven investment, USAID works with the Government of Indonesia, local leaders, the private sector, civil society and other development partners to strengthen a just and accountable democracy, expand basic services, and enhance mutual security and prosperity.
Indonesia’s coral reefs, tropical forests, and mangrove ecosystems support one of the greatest concentrations of biodiversity on earth. Indonesia is at the center of the Coral Triangle, the global epicenter of marine biodiversity, and has the third largest tropical rainforest in the world. However, decades of resource-driven development and illegal land clearance have damaged the country’s unique ecosystems and biodiversity. Illegal, unreported, and unregistered fishing (IUU) results in $3-5 billion in economic losses to Indonesia’s economy, threatening both local livelihoods and global food security. USAID assistance programming supports the Government of Indonesia’s efforts to combat IUU fishing and counter illegal wildlife trafficking, while promoting local efforts to improve land use practices and increasing the amount of renewable energy generated as a proportion of Indonesia’s overall energy production.
In 2018, the Millennium Challenge Corporation (MCC) concluded its successful five-year, $474 million compact with the Indonesian government, which aimed to advance renewable energy, improve nutrition to reduce widespread stunting, and modernize Indonesia’s public procurement system.MCC’s Board of Directors also selected Indonesia as eligible to develop a second compact, and MCC and the Indonesian government are working in partnership to identify potential areas for investment for this new program.
The 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.
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 30.1 percent in 2018. 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 more than $29 billion in 2018, while bilateral trade in services totaled an estimated $3.9 billion. Principal U.S. exports to Indonesia include soybeans, aircraft, , mineral fuels, machinery, and cotton. The stock of U.S. foreign direct investment in Indonesia was $11.1 billion in 2018, while Indonesia’s investments in the United States for the same period was $350 million. The United States continues to engage with Indonesia to advance economic reform priorities, such as strengthening the investment climate and reducing barriers to trade, such as 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 serves as a non-permanent member of the UN Security Council in 2019 and 2020. Indonesia also cooperates with the United States on issues of regional and global concern such as countering violent extremism, counterterrorism, global peacekeeping operations, maritime security, and health pandemics.
Principal embassy officials are listed in the Department’s Key Officers List.
More information about Indonesia is available from the Department of State and other sources, some of which are listed here: