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Indonesia - US Relations

The United States has important economic, commercial, and security interests in Indonesia. The country remains a linchpin of regional security due to its strategic location astride a number of key international maritime straits, particularly the Malacca Strait. Relations between Indonesia and the US are positive and have advanced since the election of President Yudhoyono in October 2004. The US played a role in Indonesian independence in the late 1940s and appreciated Indonesia's role as an anti-communist bulwark after Soekarno during the Cold War. Cooperative relations are maintained today, although no formal security treaties bind the two countries.

The United States and Indonesia share the common goal of maintaining peace, security, and stability in the region and engaging in a dialogue on threats to regional security. Cooperation between the US and Indonesia on counterterrorism has increased steadily since 2002, as terrorist attacks in Bali (October 2002 and October 2005), Jakarta (August 2003 and September 2004), and other regional locations demonstrated the presence of terrorist organizations in Indonesia. The United States has welcomed Indonesia's contributions to regional security, especially its leading role in helping restore democracy in Cambodia, mediating a territorial dispute between Thailand and Cambodia, and mediating territorial disputes in the South China Sea.

When President Yudhoyono visited Washington in May 2006, he and President Bush jointly stated that normal military relations would be in the interest of both countries and undertook to continue working toward that objective. President Yudhoyono also reaffirmed his commitment to further strengthen military reform, civilian control, and accountability. President Bush pledged his full support in these efforts. Secretary Rice's February 2006 decision to resume International Military Education and Training reestablished professional links between our militaries and result in increased professionalism of Indonesian military officers with respect to transparency, human rights, and public accountability. We also think that Foreign Military Financing (FMF) is in the interests of both countries. TNI reform is a long-term project, and President Yudhoyono is committed to take the necessary steps for enhanced military-to-military relations. We are committed to supporting Indonesia in that effort.

In November 2008, President Yudhoyono suggested the US and Indonesia work together to build a comprehensive partnership. Secretary of State Hillary Clinton’s February 2009 visit to Indonesia helped move that partnership forward in a number of key areas. Since her visit, bilateral cooperation on education, climate change, science and technology, health, and other issues has continued to progress. President Obama launched the US-Indonesia Comprehensive Partnership in November 2010.

On Novmber 19, 2011, Secretary Clinton signed a five-year, $600 million Millennium Challenge Corporation (MCC) compact with the Government of Indonesia on the sidelines of the East Asia Summit in Bali. The MCC compact with the Republic of Indonesia is designed to reduce poverty through economic growth. The compact’s three projects are expected to increase household income in project areas through increased productivity, reduced energy costs, and improved provision of public sector growth-enhancing goods and services.

The US is committed to consolidating Indonesia's democratic transition and supports the territorial integrity of the country. Nonetheless, there are friction points in the bilateral political relationship. These conflicts have centered primarily on human rights, as well as on differences in foreign policy. The US Congress cut off grant military training assistance through International Military Education and Training (IMET) to Indonesia in 1992 in response to a November 12, 1991, incident in East Timor when Indonesian security forces shot and killed East Timorese demonstrators. This restriction was partially lifted in 1995. Military assistance programs were again suspended, however, in the aftermath of the violence and destruction in East Timor following the August 30, 1999, referendum favoring independence.

Separately, the US had urged the Indonesian Government to identify and bring to justice the perpetrators of the August 2002 ambush murders of two US teachers near Timika in Papua province. In 2005, the Secretary of State certified that Indonesian cooperation in the murder investigation had met the conditions set by Congress, enabling the resumption of full IMET. Eight suspects were arrested in January 2006, and in November 2006 seven were convicted.

In November 2005, the Under Secretary of State for Political Affairs, under authority delegated by the Secretary of State, exercised a National Security Waiver provision provided in the FY 2006 Foreign Operations Appropriations Act (FOAA) to remove congressional restrictions on Foreign Military Financing (FMF) and lethal defense articles. These actions represented a reestablishment of normalized military relations, allowing the US to provide greater support for Indonesian efforts to reform the military, increase its ability to respond to disasters and participate in global peacekeeping operations, and promote regional stability.

President Barack Obama received a warm welcome when he visited Indonesia November 9-10, 2010. He lived here with his mother and Indonesian stepfather. The president's personal connection to Indonesia opened the door to improving economic and political ties between two of the largest democracies in the world. Indonesians also appreciate how Obama worked to lower tensions between the United States and the Islamic world. They give the president credit for not giving into domestic political pressures on a range of issues from ending combat operations in Iraq to defending religious freedom for Muslims in America.

Regarding worker rights, Indonesia was the target of several petitions filed under the Generalized System of Preferences (GSP) legislation arguing that Indonesia did not meet internationally recognized labor standards. A formal GSP review was suspended in February 1994 without terminating GSP benefits for Indonesia. Since 1998, Indonesia has ratified all eight International Labor Organization core conventions on protecting internationally recognized worker rights and allowed trade unions to organize. However, enforcement of labor laws and protection of workers' rights remain inconsistent and weak in some areas. Indonesia's slow economic recovery has pushed more workers into the informal sector, which reduces legal protection and could create conditions for increases in child labor.

About 60,000 Indonesians seek US nonimmigrant visas each year; the eligibility rate is in the 80% range. Most applicants are intending visitors, and others are ship’s crew (12,000), students (3,500), and government officials (2,000). About 1,000 Indonesians immigrate to the US annually; most are newlywed spouses or family members of US citizens. About 24,000 Americans live in Indonesia, mostly in Jakarta on 3-4 year business assignments, but there are 1,000-2,000 Americans retired on Bali, either as permanent or part-time residents. Indonesia treats foreigners relatively well; however, criminal penalties for narcotics or religious offenses are very harsh. The lack of adequate, reliable infrastructure and public services, and a low level of public health, are cautionary notes to Americans coming to Indonesia.

The US Agency for International Development (USAID) and its predecessor agencies have provided development assistance to Indonesia since 1950. Initial assistance focused on the most urgent needs, including food aid, infrastructure rehabilitation, health care, and training. Throughout the 1970s and 1980s, a time of great economic growth in Indonesia, USAID played a major role in helping the country achieve self-sufficiency in rice production and in reducing the fertility rate.

As part of the US-Indonesia Comprehensive Partnership, the 2009-2014 USAID Assistance Strategy for Indonesia responds to the country’s remarkable democratic and economic transformation over the last decade. The strategy moved towards a development partnership joining US and Indonesian resources to further reduce poverty and mitigate global threats such as climate change. Investments target basic and higher education, democratic governance, economic growth, primary health care, the environment, renewable energy and disaster risk reduction.

USAID assistance is part of a larger international effort to achieve the Government of Indonesia’s objectives for climate change, sustainable forest management, and low carbon emissions development. This includes commitments within the UN REDD+ (Reducing Emissions from Deforestation and Forest Degradation) initiative. USAID's investments to achieve these objectives are threefold. The first is to build sustainable forest management practices in targeted landscapes. The second is to improve forest governance through spatial planning, climate change adaptation, and low emissions development strategies. Finally investments develop local economies surrounding the targeted landscapes. Assistance targets eight sites in Sumatra, Kalimantan, and Papua, including at least 1.7 million hectares of orangutan habitat.

In June 2011, the US Environmental Protection Agency (EPA) and Indonesia’s Ministry of Environment signed an MOU, expanding environmental cooperation and formalizing cooperation on the “Breathe Easy, Jakarta” initiative to improve air quality and protect public health.

US support to Indonesia’s globally important marine resources includes USAID’s five year $35 million Marine Resources Program, partnerships on ocean research and exploration, and maritime law enforcement capacity-building. From June to August 2010, the National Oceanic and Atmospheric Administration (NOAA) research vessel Okeanos Explorer and the Indonesian Baruna Jaya research fleet made a pioneering joint mission to the "Coral Triangle" in the Indo-Pacific region. NOAA works actively with Indonesian marine scientists on research and capacity-building efforts, including developing tsunami early detection systems, deploying ocean instruments that allow scientists to predict long-term climate change, exploring uncharted deepwater habitats, and anticipating and monitoring outbreaks of harmful toxins affecting our food sources. The United States and Indonesia are also working with private sector partners to develop sustainable alternative business models to improve food security and increase incomes in economically disadvantaged coastal communities.

USAID supports the Government of Indonesia’s dual goals of expanding the domestic energy supply to provide modern grid service to 95% of the population and reducing emissions by 41% by 2020. The approach addresses four key areas: improving energy sector policy and coordination; increasing development of clean energy projects; increasing linkages between private sector financial institutions and small energy producers; and increasing public awareness of alternative renewable energy.

USAID is providing assistance to vulnerable communities that reduces their susceptibility to climate change and other natural disasters while strengthening their ability to respond when natural events occur. Assistance to a community begins with a vulnerability assessment of an area to identify risks and opportunities. The assessment is followed by technical support and education which strengthens governance in local communities. Climate change solutions provided to local communities address areas such as in agriculture, water, and natural resource management.

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Page last modified: 17-08-2013 19:10:16 ZULU