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Friday, February 11, 2011

Indonesia: Domestic Politics, Strategic Dynamics, and U.S. Interests

Bruce Vaughn
Specialist in Asian Affairs

With a population of 240 million, Indonesia is the largest country in Southeast Asia and the most populous Muslim-majority nation in the world. Its size, its emerging democracy and economic vibrancy, and its strategic position across critical sea lanes linking the Middle East with East Asia have led many to consider it an emerging middle-tier power. The U.S. maintains close relations with Indonesia, with considerable security, economic, and trade ties, although human rights concerns about the Indonesian armed forces have long been a thorn in the relationship.

In the 12 years since a catastrophic economic crisis led to the fall of longtime President Suharto, Indonesia has undergone a remarkable transformation. It has held two successful direct Presidential elections, both of which were considered largely free and fair, and conducts dozens of actively contested provincial and local elections each year. Its economy regularly posts growth of better than 6% annually, although poverty remains considerable and corruption widespread.

Discussion of Indonesia has shifted from speculation about its possible breakup due to separatist sentiments in places such as Aceh, the Malukus, West Papua, and the now independent state of Timor Leste to admiration of its democratic transformation, its relatively strong performance in the recent global economic crisis, its cooperation in efforts to combat terrorism, and its growing role in regional diplomatic institutions, international efforts to combat climate change, and its membership in the G-20.

In recent years, U.S. policy towards Indonesia has focused on cementing ties with a geopolitically important state that can play an active role in regional diplomatic institutions, and encouraging Indonesia to combat terrorism and effectively counter the rise of violent Islamic militancy. The United States has also sought to promote democracy, the rule of law and human rights, and to further American trade and investment interests in Indonesia.

The election of President Barack Obama, who spent part of his childhood in Indonesia, did much to spur expectations in Indonesia that the U.S.-Indonesia bilateral relationship would be enhanced. President Obama’s visit to Indonesia in November 2010, with the signing of a Comprehensive Partnership Agreement with Indonesian President Susilo Bambang Yudhoyono (SBY), did much to meet these expectations. The agreement covers a range of issues including trade and investment, food security, science and technology, educational exchanges, and military cooperation.

Congressional concerns have included oversight of the Obama Administration’s policies towards Indonesia, including the Comprehensive Partnership, Indonesia’s role in regional diplomacy, the restarting of comprehensive military-military relations, and policies to encourage human rights performance, particularly in restive West Papua.

Date of Report:
January 31, 2011
Number of Pages: 42
Order Number: RL32394
Price: $29.95

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