Indonesia country brief

Bilateral relations

Indonesia – the world’s third largest democracy with the world’s largest Muslim population – is one of Australia’s most important bilateral relationships. As strategic partners, we enjoy an extensive framework of cooperation spanning political, economic, security, development, education and people-to-people ties.

The bilateral relationship is underpinned by a series of regular high level meetings. These include the Indonesia-Australia Annual Leaders’ Meeting, the Foreign and Defence Ministers’ 2+2 Dialogue and the Trade Ministers’ Meeting.

The Australian and Indonesian Foreign and Defence Ministers held the third 2+2 Dialogue on 21 December 2015 in Sydney. Ministers welcomed strong and growing defence, security and strategic ties and recommitted Australia and Indonesia to work more closely to address the threat of terrorism through sharing of intelligence and counter-messaging strategies. Joint Communiqué: Third Australia-Indonesia Foreign and Defence Ministers 2+2 Dialogue.

The Australian Attorney-General and Minister for Justice and Minister Assisting the Prime Minister on Counter-Terrorism met Indonesian counterparts for the inaugural Indonesia Australia Ministerial Council on Law and Security in Jakarta on 21 December 2015. Ministers agreed to further strengthen counter-terrorism, intelligence and cyber security cooperation.

Prime Minister Turnbull visited Indonesia on 12 November 2015 and met President Joko Widodo. Both leaders discussed infrastructure, trade and investment and our common interest in countering violent extremism before making one of President Widodo’s famous impromptu blusukan visits, to the Tanah Abang textile market in Jakarta.

Former Prime Minister Abbott made three official visits to Indonesia, including to attend President Widodo’s inauguration on 20 October 2014. President Widodo attended the G20 Leaders’ Meeting in Brisbane on 15-16 November 2014.

Foreign Minister Bishop has visited Indonesia six times since coming to office. Most recently, Ms Bishop visited Indonesia for the Indian Ocean Rim Association (IORA) Council of Ministers Meeting on 22-23 October 2015. Ms Bishop made earlier visits to Indonesia in September 2013, October 2013, November 2013, December 2013 and August 2014.

Former Trade and Investment Minister, now Special Envoy for Trade Robb has visited Indonesia four times, most recently to lead a delegation of 355 Australian business representatives to Indonesia Australia Business Week on 17-20 November 2015. Mr Robb was accompanied by the Minister for Tourism and International Education, Senator Richard Colbeck, and Health Minister Sussan Ley. Mr Robb made earlier visits to Indonesia in September 2013, December 2013 and September 2015.

Other recent bilateral visits include:

  • Justice Minister Michael Keenan (August 2015)
  • Indonesia Investment Coordination Board chair Franky Sibarani (August 2015)
  • Agriculture and Water Resources Minister Barnaby Joyce (October 2015)
  • Indonesia’s Coordinating Minister for Political, Legal and Security Affairs Luhut Panjaitan (November 2015)
  • Indonesia’s Cultural and Primary and Secondary Education Minister Anies Baswedan (November 2015)
  • Assistant Minister for Multicultural Affairs Concetta Fierravanti-Wells (December 2015).
  • Indonesia’s Minister for Energy and Mineral Resources Sudirman Said (January 2016)
  • Minister for Trade and Investment, then-Minister for International Development and the Pacific Steven Ciobo (February 2016).

Strategic and security cooperation

Cooperation between Australia and Indonesia on security matters is underpinned by the Lombok Treaty (2006), with a Defence Cooperation Arrangement signed in September 2012. Both countries reaffirmed their commitment to strengthening bilateral relations in August 2014 by signing a Joint Understanding on the implementation of the Lombok Treaty, which provides an agreed approach to enhancing intelligence cooperation.

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 the Southeast Asian region in the G20 and cooperate in the East Asia Summit, ASEAN Regional Forum, IORA and MIKTA (an innovative grouping comprising Mexico, Indonesia, South Korea, Turkey and Australia).

Cooperation on counter-terrorism

Australian and Indonesian authorities have cooperated closely to investigate several major 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, defence, transport and border security, intelligence, and the security of chemical, biological, radiological, nuclear and explosive (CBRNE) materials. A Memorandum of Understanding on Combatting International Terrorism signed at the 2+2 Dialogue in Sydney on 21 December 2015 will underpin counter-terrorism cooperation with Indonesia to 2018.

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 15,000 officials from 70 countries have completed over 650 training courses at JCLEC on addressing transnational crimes – such as people smuggling and money laundering – as well as terrorism.

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. Australian companies are among the leading investors in Indonesia’s resources and energy sector.

More than 250 Australian companies have a presence in Indonesia. Two-way investment between Australia and Indonesia was valued at $9.6 billion in 2014, with Australian in investment in Indonesia at $8.1 billion and Indonesia investment in Australia at $1.5 billion.

Australia’s two-way trade with Indonesia was worth $14.8 billion in 2014-5, making Indonesia our 12th largest trade partner. Agricultural products (such as wheat, live animals and sugar) are Australia’s key merchandise exports to Indonesia, valued at $3.4 billion in 2014-15, while manufactured goods are key imports ($3.1 billion).

Two-way trade in services was valued at $3.8 billion in 2014-15. Education is Australia’s key services export to Indonesia ($585 million) and tourism is our main services import from Indonesia (almost $2 billion).

On 17 November 2015, Trade and Investment Minister Robb announced our intention to reinvigorate negotiations towards the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), to boost two-way trade and investment flows and provide a framework for closer economic cooperation.

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.

Australia also works closely with Indonesia in in multilateral, global and regional fora, including the World Trade Organization (WTO), APEC and the G20, to support global and regional trade liberalisation and economic growth.

Development cooperation

Australia is committed to supporting development in Indonesia. Reflecting our transition from a donor-recipient development cooperation model to an economic partnership, we are supporting Indonesia’s efforts to distribute the benefits of growth to a larger number of its people.

The Australian Government will deliver an estimated $375.7 million in total Official Development Assistance (ODA) in Indonesia in 2015-16, including an estimated $323 million in bilateral funding managed by DFAT.

We are working with Indonesia to provide the foundation for higher economic growth, private sector investment and increased levels of trade. Assistance focuses on areas such as financial sector supervision, budgeting, and macroeconomic management.

In human development, our programs catalyse change and build capacity to provide better quality health and education outcomes at the community level, including in eastern Indonesia.

We promote an inclusive society through better service provision, social assistance, poverty reduction policy advice and support for the rule of law.

Gender equality is a priority for the program, with an emphasis on women’s economic empowerment and a gender focus across all investments.


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 work and study in the region. Over 13,000 Indonesian students enrolled in over 17,100 courses in 2013, making Indonesia the seventh largest source of international students in Australia.

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 96 school partnerships, directly involving over 380 Australian and Indonesian teachers. A further 1,000 Australian and Indonesian teachers and 90,000 Indonesian and 30,000 Australian students have benefitted from the project.

People-to-people links

People-to-people links are an important component of the bilateral relationship with Indonesia. Through tourism and cultural, sporting and educational engagement, 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.

The 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, religion and society, media, youth, women and girls and science and technology.

Indonesia-Australia Dialogue

The Indonesia-Australia Dialogue 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 second Indonesia-Australia Dialogue was held in Sydney on 3-4 March 2013 and explored new ways to deepen and expand people-to-people links. It drew together high-calibre delegations from both countries led by former Ambassador to Indonesia John McCarthy and the Centre for Strategic and International Studies (Jakarta) Executive Director, Rizal Sukma. The next dialogue is expected to take place in March 2016.

Last Updated: 24 January 2014