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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 an extensive cooperation spanning political, economic, security, development, education and people-to-people ties. 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, and the Ministerial Council on Law and Security.

Australia and Indonesia also work closely on a range of common strategic interests in regional and global fora. We are the only two members from Southeast Asia 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.

Prime Minister Scott Morrison's first overseas first in his capacity 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: enhanced economic and development partnership, connecting people, securing our and the region's shared interests, maritime cooperation and 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 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.

High-level visits

Recent bilateral visits include:

  • President Widodo visited Australia as a Guest of Government in February 2020
  • Minister for Foreign Affairs Marise Payne met with her counterpart, Minister for Foreign Affairs Retno Marsudi in Bali in December 2019 at the Bali Democracy Forum and for the 2+2 Foreign and Defence Ministers’ Meeting
  • 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
  • Minister for Foreign Affairs Marise Payne met with Minister for Foreign Affairs Retno Marsudi during the G20 Osaka Summit in June 2019
  • Minister for Foreign Affairs Marise Payne attended the High-Level Dialogue on Indo-Pacific Cooperation in Jakarta on 20 March 2019 hosted by her counterpart, Minister for 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. 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 Plan's focus includes: 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.

Australia and Indonesia are working to enhance maritime trilateral cooperation with India and Timor-Leste.

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.

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.

Trade and investment

There is considerable opportunity for Australia to expand its trade, investment and economic cooperation relationship with Indonesia, which is the largest economy in Southeast Asia and 16th largest economy in the world.

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.

Australia's total two-way goods and services trade with Indonesia was worth $17.7 billion in 2019, making Indonesia our 13th largest trade partner:

  • Two-way trade in goods was valued at $11.3 billion in 2019. Agricultural products are among Australia's key merchandise exports to Indonesia, while crude petroleum and manufactured goods are key imports.
  • Two-way trade in services was valued at $6.4 billion in 2019. Education-related travel dominated Australian services exports to Indonesia, while our services imports were driven primarily by Australian tourists in Indonesia, especially Bali.

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.

Our existing trade agreement with Indonesia, 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. We are both negotiating the Regional Comprehensive Economic Partnership (RCEP), which will build on the outcomes of AANZFTA to promote further growth in the region.

Development cooperation

Australia has reoriented its development program in Indonesia to respond directly to COVID-19, including a step up of $21 million to support Indonesia’s immediate health, humanitarian and economic response.

The Australian Government is committed to working with Indonesia to support its response to the humanitarian, health, economic and social challenges posed by the COVID-19 pandemic

  • this is in the long-term interest of the stability, prosperity and resilience of our region
  • as close friends and neighbours, it is vital for both our countries and the region, that Australia and Indonesia emerge from this crisis stable and resilient.

Australia’s new development strategy, Partnerships for Recovery sets out how Australia’s development program will respond to COVID-19, including in Indonesia. Our partnership with Indonesia will help maximise the effectiveness of Indonesia’s own national response efforts

  • we will jointly determine shared priorities
  • we will develop a new COVID-19 Country Response Plan, in close consultation with the Government of Indonesia.

We are working with our Indonesian partners to support them to plug critical gaps in the health system, improve cross-agency emergency coordination. We are also providing high-level economic and fiscal policy advice. Simultaneously, we are supporting food security and helping to implement social safety nets, including cash transfers to the poor and social protections for vulnerable groups such as women and girls, minority groups, and people with disabilities.

The step up of $21 million in 2019-2020 uses existing programs and partnerships to address immediate health and humanitarian needs, including

  • improving disease prevention, surveillance and control through the World Health Organization ($5m)
  • support through the Red Cross and local civil society partners to enhance community preparedness and response measures ($6.4m)
  • provision of essential health supplies through the Centre for Health Security ($2m)
  • enhancement of sanitation and hygiene measures through UNICEF ($4m)
  • support for economic stimulation and maintenance of essential services delivery through the World Bank ($2.6m).

We are continuing to explore opportunities for further support through existing development partnerships and programs in support of Indonesia’s COVID-19 response and recovery, and are continuing to engage with key development partners to coordinate efforts.

Education

Indonesia and Australia enjoy a strong relationship in education. Indonesia is the most popular destination for students under the Australian Government's New Colombo Plan, an initiative to encourage young Australians to study and undertake work-based experiences in the Indo-Pacific region. Since 2014, the New Colombo Plan has awarded over 9,700 scholarships and mobility grants for Australian undergraduates to undertake study and work-based experiences in Indonesia.

The Australia Awards program for Indonesia is the largest and longest running scholarship program of its kind offered by the Australian Government. The program focuses on areas of importance to the development of Indonesia's human resource gaps, including those aimed at strengthening economic governance and the delivery of services in health and education.

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.

Australia-Indonesia Institute

The Australia-Indonesia Institute, established in 1989, promotes greater mutual understanding and contact between Australians and Indonesians. Its flagship programs include BRIDGE, the Australia-Indonesia Youth Exchange Program (AIYEP) and the Muslim Exchange Program (MEP). The AII also runs public grant rounds, which fund innovative programs in arts and culture, education, technology and innovation, civil society and media, and religion.

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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