Bilateral Relations

Brief History

The relations between Indonesia and the United States had long been established before Indonesia’s Proclamation of Independence in 1945. Since the early 19th century, numbers of U.S. traders had been regularly visiting Indonesia which was a Dutch colony at the time. The U.S. established its first consular post in Batavia (now Jakarta) on November 24, 1801.

The formal diplomatic relations between Indonesia and the United States were officially marked by the opening of an Embassy in each of the two countries. The United States opened its Embassy in Jakarta on December 28, 1949, and appointed H.E. Horace Merle Cocrhan as the first U.S. Ambassador to Indonesia, whereas Indonesia appointed Dr. Ali Sastroamidjojo as the first Indonesian Ambassador to the United States on February 20, 1950.

Cooperation in Political Sector

The bilateral relations between Indonesia and the U.S. entered a new heightened level in 2015. During President Joko Widodo’s visit to Washington, D.C. in October 2015, Indonesia and the U.S. agreed to expand and enhance its cooperation into a Strategic Partnership. The Partnership will be an avenue to address more strategic issues at the highest level. It will create opportunities to deepen Indonesia and the U.S. joint contribution and collaboration on bilateral, regional, and global issues.

The Partnership focuses on six areas of cooperation: Maritime Cooperation; Defense Cooperation; Economic Growth and Development; Energy Cooperation; Increasing Cooperation on Global and Regional Issues; and People to People Contacts. It also recognized the invaluable contributions of civil society and the private sector by establishing a joint Council to work on Track II. During the visit, President Joko Widodo also had the opportunity to witness the signing of business deals worth more than US$ 22 billion.

Under the Track II cooperation, on August 11, 2016, the United States-Indonesia Society (USINDO) and committed non-government Indonesian and American leaders from the religious, academic, and non-government sectors of each country, announced the creation of an independent, bi-national, non-governmental body, the Indonesia-U.S. Council on Religion and Pluralism, in Yogyakarta, Indonesia. The areas of shared interest, experience, and concern of the Council, are: 1) Increasing religious understanding, mutual respect, and collaboration; 2) Fostering positive civic and religious education models; and 3) Empowering civil society to deter violent extremism.

Cooperation in Defense and Security Sector

Since the U.S. relieved its military embargo on Indonesia in 2006, the defense cooperation between Indonesia and the US has been steadily improving in term of its number of activities, scope of cooperation, as well as level of engagement. For illustration, in 2011-2016, there were at least 998 joint defense and security activities performed by the military officials of Indonesia and the U.S.

Indonesia and the U.S. had been organizing annual military meetings through the Indonesia-United States Security Dialog (IUSSD) since 2002, in which high-ranking military officials of the two countries review their bilateral cooperation, as well as exchange their views on regional and global security issues. The most recent meeting, the 14th IUSSD, was held in Washington, D.C. on September 1-2, 2016.

In 2015, the Minister for Defence of Indonesia and the U.S. Secretary of Defense signed a joint statement, stipulating the focus activities that will be undertaken to advance the cooperation of the two countries, as follows:

  1. Maritime Cooperation;
  2. Defense Procurement and Joint Research and Development;
  3. Improving Professionalism;
  4. Cooperation on Peacekeeping Operations and Training;
  5. Humanitarian Assistance and Disaster Response; and
  6. Countering Trans-National Threats.

Cooperation in Trade, Investment and Tourism Sector

Indonesia and US total trade in 2014 reached a value of US$27.7 billion. The two countries believe that this number does not reflect the full potential given the size of Indonesia’ and the US’ size markets. This is why the two countries are committed to increase its government to government and business to business relations.

In bilateral trade cooperation, since 1998, Indonesia and the US have had “TIFA” (Trade and Investment Framework Agreement). TIFA serves as a forum to discuss issues related to trade and investment between the two countries. Under TIFA, delegations from Indonesia and the U.S. meet annually at senior official and/or Cabinet levels. The Indonesia-US TIFA has four Working Groups (WG), i.e. WG on Industrial and Agricultural Products; WG on Illegal Logging and Associated Trade; WG on Intellectual Property Rights; and WG on Investment. After the U.S.-Indonesia Comprehensive Partnership was announced 2010, the result of TIFA meetings have been shared and reported to the US and Indonesia’s Joint Commission Meeting, co-chaired by both Indonesia’s Minister of Foreign Affairs and the U.S. Secretary of State.

The US investment in Indonesia reached a value of US$ 930.8 million in 2010 or increased by 542.7% compared to the US$ 171.5 million in 2009. The amount placed the United States as the 3rd biggest investor in Indonesia after Singapore and Britain. For the period of January-March 2011, the investment value stood at US$ 359.1 million which afforded the country as the 2nd biggest investor in Indonesia after Singapore.

Meanwhile, in order to assure the US investment in Indonesia, the Head of Indonesia Investment Coordinating Board and the Acting President of OPIC signed the Indonesia-US Investment Support Agreement-Overseas Private Investment Corporation (ISA-OPIC) on 14 April 2010 in Washington, D.C. The agreement then was ratified through the Presidential Regulation No. 48 Year 2010 issued on 19 July 2010, and it was expected to spark more interest from the US investors to invest in Indonesia.

Related to the tourism sector, in total of 171.528 US tourists visited Indonesia in 2010 entering through Indonesia’s 19 main gates. The number also meant an increase of 5.68% in total number of visitors compared to the 162.302 people in 2009.

Cooperation in Development Sector

Indonesia had been receiving the Millennium Challenge Corporation (MCC) grant from the United States since 2006 with a total amount of US$ 55 million in order to fund immunization and anti-corruption programs inside the country. In December 2008 Indonesia was once again chosen to receive similar grant through the scheme of MCC Compact Program (MCC CP) for the period of 2008-2013. The MCC CP comprised the following programs: e-procurement, education and health as well as natural resources management/REDD+.

In addition, the Government of Indonesia and the United States Agency for International Development (USAID) had agreed on a USAID grant which would be given through the scheme of a Strategic Plan which covers five programs, i.e. education, government and democracy, economic development, health and environment for the period of 2009-2014. Implementation of the grant was then reinforced by signing an Assistance Agreement (AA).

The Government of Indonesia also signed another USAID grant agreement on 24 September 2010. This time, the agreement constituted a grant of US$ 65.358.000 from the World Bank (as coordinator) to the National Program for Community Empowerment (NPCE) in Villages through the scheme of NPCE Support Facility Trust Fund.

Another USAID grant with an amount of US$ 371.3 million was received by Indonesia in order to assist the post-tsunami recovery and reconstruction process in Aceh. It was drafted in the Strategic Objective Grant Agreement (SOAG) to Support Tsunami Recovery and Reconstruction which was jointly signed by the Rehabilitation and Reconstruction Agency and the USAID on 7 July 2005. It had helped funding the construction of 100km-long Banda Aceh-Calang main road as well as the development of FKIP Unsiyah.

Cooperation in Energy Sector

The cooperation between Indonesia and the United States in energy sector was marked by the organizing of Indonesia-US Energy Policy Dialog (EPD) II in Jakarta on 20-21 October 2008. The meeting covered discussion on the cooperation plan to develop renewable technology, the development of geothermal technology through the International Partnership for Geothermal Technology (IPGT), the information exchange concerning investment policy as well as capacity building. Meanwhile, the EPD III in Washington D.C. on 28-30 June 2010 addressed the issues of national energy policy, energy source development and utilization, research and development on capacity building, unconventional gas, methane to market and Human Resource development.

Indonesia-US cooperation in energy sector was greatly supported by the US Trade and Development Agency (USTDA) by granting US$ 1.6 million to fund the development of geothermal plan 370 MW in Halmahera and 300 MW in West Java.

Cooperation in Environmental Sector

Indonesia-US cooperation in environment sector was marked by the signing of the Debt for Nature Swap-Tropical Forest Conservation Act which worth of US$ 19.6 million on 30 June 2009 in Sumatera. Moreover, the Government of Indonesia and the United States planned to establish a Climate Change Center as an effort to mitigate the impact of climate change in Indonesia. The Center would operate for 2 year period starting on 1 July 2010. The US Government would fund the initial operational expenses which would be spent mainly on reducing emission from peat lands and forests.

Cooperation in Food Security

The Indonesia-United States Agricultural Technology and Investment Forum was organized in Jakarta on 6-7 October 2010 as a part of the Plan of Action to implement the Indonesia-US Comprehensive Partnership, particularly in food security. The forum then agreed that there needed to be a greater participation from Public Private Partnership which involved academicians in order to attain food security. Therefore, any policy and action would be decided based on credible research and study.

Cooperation in Marine Sector

Cooperation between Indonesia-United States in marine sector was founded on an MoU between the Indonesian Ministry of Marine Affairs and Fisheries and the National Oceanic and Atmospheric Administration (NOAA) which was drafted on 18 September 2007 and the Implementation Arrangement of the respective MoU which was signed on 10 June 2010. As a follow up, Indonesia and the United States agreed on a joint exploration using NOAA’s expedition ship, “OKEANOS EXPLORER”. In addition to the joint exploration, the two also agreed to cooperate on a sustainable fisheries management, the Coral Triangle Initiative (CTI) and the Maritime Partnership Program.

Cooperation in Education, Peace Corps, Science and Technology and Interfaith Dialog

Cooperation in education between Indonesia and the United States began in 1952 through the granting of Fulbright Scholarship which in its development later on was organized by the American Indonesian Exchange Foundation (AMINEF). An MoU between Indonesia and the US on AMINEF signed on 16 February 2009 regulated the technical procedure of granting the Fulbright scholarship through the mechanism of tuition waiver or remission as well as living expenses coverage while the grantee attending US higher education institutions. In addition, the Education and Training Center of the Indonesian Ministry of Foreign Affairs and AMINEF signed a cooperation agreement on capacity building of Indonesian diplomats on 17 December 2009.

Cooperation in education between the two was also implemented through the USINDO by signing an MoU on Educational, Social and Cultural Cooperation on 15 May 2006. The USINDO provided opportunities for Indonesian diplomats to enroll in US education institutions and also sent volunteers to teach at English language programs in Indonesia.

Meanwhile, the signing of an MoU on Peace Corps by Indonesia and the United States on 11 December 2009 marked another cooperation between the two. A number of US volunteers were sent in March 2010 to give training to English teachers in public schools and Madrasah (Islamic school) in East Java province as the implementation of the MoU. Judging from the positive result gained by the program, the United States would increase the total number of volunteers to 33 people in 2011 and 50 people in 2012 as well as decided to expand the program outside of East Java province.

In response to the US President Barack Obama’s speech at Al-Azhar University, Cairo on 4 June 2009 proposing a fight against negative stereotype towards Islam, Indonesian President Susilo Bambang Yudhoyono promptly declared the Government of Indonesia’s commitment to bridge the Islamic world and the West during his speech at Harvard University on 29 September 2009. From that point forward, the two countries agreed to unite all the related parties in the region in an Interfaith Dialog between Indonesia and the United States which was held on 25-27 January 2010. The meeting resulted in a number of cooperation pointers which were later drafted in the Shared Concerns and Commitments Indonesia-US Interfaith Cooperation. As a follow up action, the Indonesian Ministry of Foreign Affairs then arranged academicians, religious figures and society figures to give public lectures on Democracy and Moderate Islam in Indonesia at several US universities (Chicago, Houston, Los Angeles and San Francisco) on 8-12 November 2010.

A cooperation agreement in Science and Technology was signed by both countries in Jakarta on 29 March 2010. It renewed the similar agreement which had expired in 2002. The agreement constituted an MTA (Material Transfer Agreement) and verses on the protection of Intellectual Property Rights of GRTK (Genetic Resources and Traditional Knowledge). As an implementation of the agreement, Dr. Bruce Alberts (US Science Envoy) visited Indonesia with the missions of identifying cooperation potentials in research and technology and forming a Joint Work Group in Education.

The US Embassy also participated in encouraging understanding and friendship among Indonesian and American youth by opening a US cultural center, @america, in the 3rd Floor of Pacific Place Mall, Jakarta on 6 December 2010. @america become the only US cultural center in the world where visitors would be able to watch various advance multimedia and interactive broadcast about the American way of life.