U.S. Dept. of State: Updated Background Note on Indonesia, October
2009 [incl:
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Tapol
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Oct 08, 2009 09:03 PDT
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[Note: Thanks to ETAN for heads up on this report]
U.S. Department of State
Bureau of East Asian and Pacific Affairs
October, 2009
Background Note: Indonesia
Flag of Indonesia is two equal horizontal bands of red (top)
and white.
PROFILE
Official Name: Republic of Indonesia
Geography
Area: 2 million sq. km. (736,000 sq. mi.), about three times the
size of Texas; maritime area: 7,900,000 sq. km.
Cities: Capital--Jakarta (est. 8.8 million). Other
cities--Surabaya 3.0 million, Medan 2.5 million, Bandung 2.5
million.
Terrain: More than 17,500 islands; 6,000 are inhabited; 1,000 of
which are permanently settled. Large islands consist of coastal
plains with mountainous interiors.
Climate: Equatorial but cooler in the highlands.
People
Nationality: Noun and adjective--Indonesian(s).
Population (July 2009 est.): 240.3 million.
Annual population growth rate (2009 est.): 1.136%.
Ethnic groups (2000 census): Javanese 40.6%, Sundanese 15%,
Madurese 3.3%, Minangkabau 2.7%, others 38.4%.
Religions (2000 census): Muslim 86.1%, Protestant 5.7%, Catholic
3%, Hindu 1.8%, others 3.4%.
Languages: Indonesian (official), local languages, the most
prevalent of which is Javanese.
Education: Years compulsory--9. Enrollment--94% of eligible
primary school-age children.
Literacy--90.4% (2007).
Health: Infant mortality rate (2009 est.)--29.97/1,000. Life
expectancy at birth (2009 est.)--70.76 years.
Work force: 111.5 million (2008). Agriculture--42%,
industry--12%, services--44%.
Government
Type: Independent republic.
Independence: August 17, 1945 proclaimed.
Constitution: 1945. Embodies five principles of the state
philosophy, called Pancasila, namely monotheism,
humanitarianism, national unity, representative democracy by
consensus, and social justice.
Branches: Executive--president (head of government and chief of
state) elected by direct popular vote. Legislative--The People's
Consultative Assembly (MPR), which includes the 560-member House
of Representatives (DPR) and the 132-member Council of Regional
Representatives (DPD), both elected to five-year terms.
Judicial--Supreme Court is the final court of appeal.
Constitutional Court has power of judicial review Suffrage: 17
years of age universal, and married persons regardless of age.
Economy
GDP (2007): $433 billion; (2008 est.): $511 billion.
Annual growth rate (2007): 6.3%; (2008): 6.1%; (2009 est.): 3.5%.
Inflation (2007): 6.6%; (2008): 11.1%; (2009 end-February): 8.6%.
Per capita income (2008 est., PPP): $3,900.
Natural resources (11.0% of GDP): Oil and gas, bauxite, silver,
tin, copper, gold, coal.
Agriculture (14.4% of GDP): Products--timber, rubber, rice, palm
oil, coffee. Land--17% cultivated.
Manufacturing (27.9% of GDP): Garments, footwear, electronic
goods, furniture, paper products.
Trade: Exports (2008)--$136.8 billion including oil, natural
gas, crude palm oil, coal, appliances, textiles, and rubber.
Major export partners--Japan, U.S., Singapore, China, Malaysia,
and Republic of Korea. Imports (2008)--$128.8 billion including
oil and fuel, food, chemicals, capital goods, consumer goods,
iron and steel. Major import partners--Singapore, China, Japan.
PEOPLE
Indonesia's approximately 240.3 million people make it the
world's fourth-most populous nation. The island of Java, roughly
the size of New York State, is the most populous island in the
world (124 million, 2005 est.) and one of the most densely
populated areas in the world. Indonesia includes numerous
related but distinct cultural and linguistic groups, many of
which are ethnically Malay. Since independence, Bahasa Indonesia
(the national language, a form of Malay) has spread throughout
the archipelago and has become the language of most written
communication, education, government, business, and media. Local
languages are still important in many areas, however. English is
the most widely spoken foreign language. Education is compulsory
for children through grade 9. In primary school, 94% of eligible
children are enrolled whereas 57% of eligible children are
enrolled in secondary school.
Constitutional guarantees of religious freedom apply to the six
religions recognized by the state, namely Islam (86.1%),
Protestantism (5.7%), Catholicism (3%), Hinduism (1.8%),
Buddhism (about 1%), and Confucianism (less than 1%). On the
resort island of Bali, over 90% of the population practices
Hinduism. In some remote areas, animism is still practiced.
HISTORY
By the time of the Renaissance, the islands of Java and Sumatra
had already enjoyed a 1,000-year heritage of advanced
civilization spanning two major empires. During the 7th-14th
centuries, the Buddhist kingdom of Srivijaya flourished on
Sumatra. At its peak, the Srivijaya Empire reached as far as
West Java and the Malay Peninsula. Also by the 14th century, the
Hindu Kingdom of Majapahit had risen in eastern Java. Gadjah
Mada, the empire's chief minister from 1331 to 1364, succeeded
in gaining allegiance from most of what is now modern Indonesia
and much of the Malay archipelago as well. Legacies from Gadjah
Mada's time include a codification of law and an epic poem.
Islam arrived in Indonesia sometime during the 12th century and,
through assimilation, supplanted Hinduism by the end of the 16th
century in Java and Sumatra. Bali, however, remains
overwhelmingly Hindu. In the eastern archipelago, both Christian
and Islamic proselytizing took place in the 16th and 17th
centuries, and, currently, there are large communities of both
religions on these islands.
Beginning in 1602, the Dutch slowly established themselves as
rulers of Indonesia, exploiting the weakness of the small
kingdoms that had replaced that of Majapahit. The only exception
was East Timor, which remained under Portugal's control until
1975. During 300 years of rule, the Dutch developed the
Netherlands East Indies into one of the world's richest colonial
possessions.
During the first decade of the 20th century, an Indonesian
independence movement began and expanded rapidly, particularly
between the two World Wars. Its leaders came from a small group
of young professionals and students, some of whom had been
educated in the Netherlands. Many, including Indonesia's first
president, Soekarno (1945-67), were imprisoned for political
activities.
The Japanese occupied Indonesia for three years during World War
II (1942-1945). On August 17, 1945, three days after the
Japanese surrender to the Allies, a small group of Indonesians,
led by Soekarno and Mohammad Hatta, proclaimed independence and
established the Republic of Indonesia. They set up a provisional
government and adopted a constitution to govern the republic
until elections could be held and a new constitution written.
Dutch efforts to reestablish complete control met strong
resistance. After four years of warfare and negotiations, the
Dutch transferred sovereignty to a federal Indonesian
Government. In 1950, Indonesia became the 60th member of the
United Nations.
Shortly after hostilities with the Dutch ended in 1949,
Indonesia adopted a new constitution, providing for a
parliamentary system of government in which the executive was
chosen by and accountable to parliament. Parliament was divided
among many political parties before and after the country's
first nationwide election in 1955, and stable governmental
coalitions were difficult to achieve. The role of Islam in
Indonesia became a divisive issue. Soekarno defended a secular
state based on Pancasila, five principles of the state
philosophy--monotheism, humanitarianism, national unity,
representative democracy by consensus, and social
justice--codified in the 1945 constitution, while some Muslim
groups preferred either an Islamic state or a constitution that
included a preambular provision requiring adherents of Islam to
be subject to Islamic law. At the time of independence, the
Dutch retained control over the western half of New Guinea
(known as Irian Jaya in the Soekarno and Suharto eras and as
Papua since 2000) and permitted steps toward self-government and
independence.
Negotiations with the Dutch on the incorporation of Irian Jaya
into Indonesia failed, and armed clashes broke out between
Indonesian and Dutch troops in 1961. In August 1962, the two
sides reached an agreement, and Indonesia assumed administrative
responsibility for Irian Jaya on May 1, 1963. The Indonesian
Government conducted an "Act of Free Choice" in Irian Jaya under
UN supervision in 1969 in which 1,025 Papuan representatives of
local councils agreed by consensus to remain a part of
Indonesia. A subsequent UN General Assembly resolution confirmed
the transfer of sovereignty to Indonesia. Opposition to
Indonesian administration of Papua gave rise to small-scale
guerrilla activity in the years following Jakarta's assumption
of control. In the more open atmosphere since 1998, there have
been more explicit expressions within Papua calling for
independence from Indonesia.
Unsuccessful rebellions on Sumatra, Sulawesi, West Java, and
other islands beginning in 1958, plus a failure by the
constituent assembly to develop a new constitution, weakened the
parliamentary system. Consequently, in 1959, when President
Soekarno unilaterally revived the provisional 1945 constitution
that provided for broad presidential powers, he met little
resistance. From 1959 to 1965, President Soekarno imposed an
authoritarian regime under the label of "Guided Democracy." He
also moved Indonesia's foreign policy toward nonalignment, a
foreign policy stance supported by other prominent leaders of
former colonies who rejected formal alliances with either the
West or Soviet bloc. Under Soekarno's auspices, these leaders
gathered in Bandung, West Java, in 1955 to lay the groundwork
for what became known as the Non-Aligned Movement. In the late
1950s and early 1960s, President Soekarno moved closer to Asian
communist states and toward the Indonesian Communist Party (PKI)
in domestic affairs. Though the PKI represented the largest
communist party outside the Soviet Union and China, its mass
support base never demonstrated an ideological adherence typical
of communist parties in other countries.
By 1965, the PKI controlled many of the mass civic and cultural
organizations that Soekarno had established to mobilize support
for his regime and, with Soekarno's acquiescence, embarked on a
campaign to establish a "Fifth Column" by arming its supporters.
Army leaders resisted this campaign. Under circumstances that
have never been fully explained, on October 1, 1965, PKI
sympathizers within the military, including elements from
Soekarno's palace guard, occupied key locations in Jakarta and
kidnapped and murdered six senior generals. Major General
Suharto, the commander of the Army Strategic Reserve, rallied
army troops opposed to the PKI to reestablish control over the
city. Violence swept throughout Indonesia in the aftermath of
the October 1 events, and unsettled conditions persisted through
1966. Right-wing gangs killed tens of thousands of alleged
communists in rural areas. Estimates of the number of deaths
range between 160,000 and 500,000. The violence was especially
brutal in Java and Bali. During this period, PKI members by the
tens of thousands turned in their membership cards. The emotions
and fears of instability created by this crisis persisted for
many years as the communist party remains banned from Indonesia.
Throughout the 1965-66 period, President Soekarno vainly
attempted to restore his political stature and shift the country
back to its pre-October 1965 position. Although he remained
President, in March 1966, Soekarno transferred key political and
military powers to General Suharto, who by that time had become
head of the armed forces. In March 1967, the Provisional
People's Consultative Assembly (MPRS) named General Suharto
acting President. Soekarno ceased to be a political force and
lived under virtual house arrest until his death in 1970.
President Suharto proclaimed a "New Order" in Indonesian
politics and dramatically shifted foreign and domestic policies
away from the course set in Soekarno's final years. The New
Order established economic rehabilitation and development as its
primary goals and pursued its policies through an administrative
structure dominated by the military but with advice from
Western-educated economic experts. In 1968, the People's
Consultative Assembly (MPR) formally selected Suharto to a full
five-year term as President, and he was reelected to successive
five-year terms in 1973, 1978, 1983, 1988, 1993, and 1998. In
mid-1997, Indonesia suffered from the Asian financial and
economic crisis, accompanied by the worst drought in 50 years
and falling prices for oil, gas, and other commodity exports. As
the exchange rate changed from a fixed to a managed float to
fully floating, the rupiah (IDR or Rp) depreciated in value,
inflation increased significantly, and capital flight
accelerated. Demonstrators, initially led by students, called
for Suharto's resignation. Amid widespread civil unrest, Suharto
resigned on May 21, 1998, three months after the MPR had
selected him for a seventh term. Suharto's hand-picked Vice
President, B.J. Habibie, became Indonesia's third President.
President Habibie reestablished International Monetary Fund
(IMF) and donor community support for an economic stabilization
program. He released several prominent political and labor
prisoners, initiated investigations into the unrest, and lifted
controls on the press, political parties, and labor unions.
In January 1999, Habibie and the Indonesian Government agreed to
a process, with UN involvement, under which the people of East
Timor would be allowed to choose between autonomy and
independence through a direct ballot held on August 30, 1999.
Some 98% of registered voters cast their ballots, and 78.5% of
the voters chose independence over continued integration with
Indonesia. Many people were killed by Indonesian military forces
and military-backed militias in a wave of violence and
destruction after the announcement of the pro-independence vote.
Indonesia's first elections in the post-Suharto period were held
for the national, provincial, and sub-provincial parliaments on
June 7, 1999. Forty-eight political parties participated in the
elections. For the national parliament, Partai Demokrasi
Indonesia Perjuangan (PDI-P, Indonesian Democratic Party of
Struggle, led by Megawati Sukarnoputri) won 34% of the vote;
Golkar ("Functional Groups" party) 22%; Partai Kebangkitan
Bangsa (PKB, National Awakening Party, linked to the
conservative Islamic organization Nadhlatul Ulama headed by
former President Abdurrahman Wahid) 13%; and Partai Persatuan
Pembangunan (PPP, United Development Party, led by Hamzah Haz)
11%. The MPR selected Abdurrahman Wahid as Indonesia's fourth
President in November 1999 and replaced him with Megawati
Sukarnoputri in July 2001.
The constitution, as amended in the post-Suharto era, provides
for the direct election by popular vote of the president and
vice president. Under the 2004 amendment, only parties or
coalitions of parties that gained at least 3% of the House of
Representatives (DPR) seats or 5% of the vote in national
legislative elections were eligible to nominate a presidential
and vice presidential ticket.
The 2004 legislative elections took place on April 5 and were
considered to be generally free and fair. Twenty-four parties
took part in the elections. Big parties lost ground, while small
parties gained larger shares of the vote. However, the two
Suharto-era nationalist parties, PDI-P and Golkar, remained in
the lead. PDI-P (opposition party during the Suharto era) lost
its plurality in the House of Representatives, dropping from 33%
to 18.5% of the total vote (and from 33% to 20% of the seats).
The Golkar Party (Suharto’s political party) declined slightly
from 1999 levels, going from 22% to 21% of the national vote
(from 26% to 23% of DPR seats). The third- and fourth-largest
parties (by vote share) were two Islamic-oriented parties, the
United Development Party (PPP) (8% of the votes, 10.5% of the
seats) and National Awakening Party (PKB) (10.5% of the vote,
9.45% of the seats). Susilo Bambang Yudhoyono’s nationalist
Democratic Party (PD) won 7.45% of the national vote and 10% of
the DPR seats, making it the fourth-largest party in the DPR.
Seven of the 24 parties won no DPR seats; six won 1-2 seats, and
the other six won between 2%-6% of the national vote (between
5-52 DPR seats).
The first direct presidential election was held on July 5, 2004,
contested by five tickets. As no candidate won at least 50% of
the vote, a runoff election was held on September 20, 2004,
between the top two candidates, President Megawati Sukarnoputri
and retired General Susilo Bambang Yudhoyono. In this final
round, Yudhoyono won 60.6% of the vote. Approximately 76.6% of
the eligible voters participated, a total of roughly 117 million
people, making Indonesia's presidential election the largest
single-day election in the world. The Carter Center, which sent
a delegation of election observers, issued a statement
congratulating "the people and leaders of Indonesia for the
successful conduct of the presidential election and the peaceful
atmosphere that has prevailed throughout the ongoing democratic
transition."
In 2009, national legislative elections were held on April 9 and
presidential elections were held in July. They were peaceful and
considered free and fair. New electoral rules required that a
party win 2.5% of the national vote in order to enter
parliament. A total of thirty-eight national and six local (Aceh
only) parties contested the 2009 legislative elections. At least
171 million voters registered to vote in these elections. Voter
turnout was estimated to be 71% of the electorate. Nine parties
won parliamentary seats in the House of Representatives (DPR).
The top three winners were secular nationalist parties:
President Yudhoyono’s Partai Demokrat, with 20.85% of the vote;
Vice President Jusuf Kalla’s Golkar Party, 14.45%; and former
president Megawati’s opposition PDI-P party, with 14.03%. The
next four largest parties were all Islamic-oriented parties:
PKS, PAN (6%), PPP (5.3%), and PKB (4.9%). Only PKS maintained
its 2004 vote share (7.88%); the other three declined
significantly in popularity. The smallest two parties in
Parliament, Gerindra and Hanura, with 4.46 and 3.77% of the vote
respectively, are run by retired Suharto-era army generals
Prabowo Subianto and Wiranto (one name only). The 2009 DPR
members took their seats October 1.
Also in 2009, the threshold was revised so that only parties or
coalitions of parties that gained at least 20% of the House of
Representatives (DPR) seats or 25% of the vote in the 2009
national legislative elections would be eligible to nominate a
presidential and vice presidential ticket. Partai Demokrat,
Golkar, and PDI-P parties, the top winners in the legislative
elections, nominated presidential candidates. To win in one
round, a presidential candidate was required to receive more
than 50% of the vote and more than 20% of the vote in 17 of
Indonesia’s 33 provinces. If no candidate did so, the top two
candidates would have competed in a second round in September
2009.
Three tickets competed in the presidential elections. Incumbent
President Yudhoyono and his running mate, non-partisan former
Central Bank Chair and Economics Minister Boediono, won the
election with such a significant plurality--60.6%--that it
obviated the need for a second round of elections. Main
challenger and former president and opposition leader Megawati
Sukarnoputri and running mate Prabowo Subianto trailed with 28%.
Meanwhile, Vice President Jusuf Kalla and running mate Wiranto
came in last at 12.7%. Indonesia’s Consultative Assembly (MPR)
will inaugurate President Susilo Bambang Yudhoyono for his
second term as president on October 20, 2009.
Natural disasters have devastated many parts of Indonesia over
the past few years. On December 26, 2004, a 9.1 to 9.3 magnitude
earthquake took place in the Indian Ocean, and the resulting
tsunami killed over 130,000 people in Aceh and left more than
500,000 homeless. On March 26, 2005, an 8.7 magnitude earthquake
struck between Aceh and northern Sumatra, killing 905 people and
displacing tens of thousands. After much media attention on the
seismic activity on Mt. Merapi in April and May 2006, a 6.2
magnitude earthquake occurred 30 miles to the southwest. It
killed more than 5,000 people and left an estimated 200,000
people homeless in the Yogyakarta region. An earthquake of 7.4
struck Tasikmalaya, West Java, on September 2, 2009, killing
approximately 100 people. On September 30, 2009, a 7.6 magnitude
earthquake struck Western Sumatra. Early reports indicated more
than 1,000 fatalities.
GOVERNMENT AND POLITICAL CONDITIONS
Indonesia is a republic based on the 1945 constitution providing
for a separation of executive, legislative, and judicial power.
Substantial restructuring has occurred since President Suharto's
resignation in 1998 and the short, transitional Habibie
administration in 1998 and 1999. The Habibie government
established political reform legislation that formally set up
new rules for the electoral system, the House of Representatives
(DPR), the People's Consultative Assembly (MPR), and political
parties without changing the 1945 Indonesian constitution. After
these reforms, the constitution now limits the president to two
terms in office.
Indonesia adopted a bicameral legislative system following the
establishment of the DPD (Regional Representatives Council),
which was first elected in 2004. The DPD is composed of four
representatives from each of Indonesia’s 33 provinces. Although
it can make proposals and submit opinions on legislative matters
concerning the regions, it does not have the power to create
legislation. The MPR consists of both the DPD and the DPR. The
MPR has the power to inaugurate and to impeach the president
(upon the recommendation of the DPR). The current Speaker of the
MPR is Hidayat Nur Wahid and the Speaker of the DPR is Agung
Laksono. A new speaker and four deputy speakers for the DPR and
MPR will be chosen sometime after the presidential inauguration
October 20, 2009. The largest party in the DPR, now President
Yudhoyono’s Partai Demokrat, will fill the influential DPR
speaker position.
The president, elected for a 5-year term, is the top government
and political figure. The president and the vice president were
elected by popular vote for the first time on September 20,
2004. Previously, the MPR selected Indonesia's president. In
1999, the MPR selected Abdurrahman Wahid, also known as Gus Dur,
as the fourth President. The MPR removed Gus Dur in July 2001,
immediately appointing then-Vice President Megawati Sukarnoputri
as the fifth President. Megawati brought a certain amount of
stability to Indonesia, yet there were concerns over progress on
combating corruption and encouraging economic growth. In 2004,
Susilo Bambang Yudhoyono was elected to succeed Megawati.
The president, assisted by an appointed cabinet, has the
authority to conduct the administration of the government.
President Yudhoyono's Partai Demokrat (PD) holds 145 of the 560
seats in the House of Representatives (DPR), making it the
largest political party represented in the legislature as of
September 2009. Partai Demokrat has a coalition with the four
largest Islamic parties. The coalition holds a majority of the
seats in the DPR. The People's Consultative Assembly (MPR) has
692 members, including 560 members of the DPR and the 132
representatives of the Council of Regional Representatives
(DPD). Since 2004, citizens have elected legislators for the DPR
and DPD, but their vote was based on a party list system. This
ensured that the party elite, placed at the top of the party
candidate lists, were voted into office. In 2009, a “majority
vote wins” system allowed voters for the first time to directly
put the candidate who won a plurality of votes into office.
Prior to 2004, some legislative seats had been reserved for
representatives of the armed forces. The military has been a
significant political force throughout Indonesian history,
though it had ceded its formal political role by 2004. The armed
forces shaped the political environment and provided leadership
for Suharto's New Order from the time it came to power in the
wake of the abortive 1965 uprising. Military officers,
especially from the army, were key advisers to Suharto and
Habibie and had considerable influence on policy. Under the dual
function concept ("dwifungsi"), the military asserted a
continuing role in socio-political affairs. This concept was
used to justify placement of officers in the civilian
bureaucracy at all government levels and in regional and
national legislatures. Although the military retains influence
and is one of the only truly national institutions, the
wide-ranging democratic reforms instituted since 1999 abolished
"dwifungsi" and ended the armed forces' formal involvement in
government administration. The police have been separated from
the military, further reducing the military's direct role in
governmental matters. Control of the military by the
democratically elected government has been strengthened.
As a reaction to Suharto's centralization of power and
reflecting historically independent sentiment, Hasan di Tiro
established the Free Aceh Movement (Gerakan Aceh Merdeka, GAM)
in December 1976 to seek independence for Aceh. Some 15,000 died
in military conflict in Aceh over the following three decades.
Through peace talks led by former Finnish President Martti
Ahtisaari, a peace agreement between GAM and the Indonesian
Government that provided wide-ranging autonomy for Aceh was
signed on August 15, 2005. By December 2005, GAM declared that
it had disbanded the military wing of its organization, and the
Indonesian Government had withdrawn the bulk of its security
forces down to agreed levels. On December 11, 2006, Aceh held
gubernatorial and district administrative elections, the first
democratic elections in over half a century in Aceh, resulting
in the election of a former separatist leader as governor. In
2009, Aceh participated in the national legislative and
presidential elections and elected its own provincial
legislature.
Principal Government Officials
President--Susilo Bambang Yudhoyono
Vice President--Jusuf Kalla
Minister of Foreign Affairs--Noer Hassan Wirajuda
Ambassador to the United States--Sudjadnan Parnohadiningrat
Ambassador to the United Nations--Marty Natalegawa
The Embassy of Indonesia is at 2020 Massachusetts Avenue NW,
Washington, DC 20036 (tel. 202-775-5200-5207; fax:
202-775-5365). Consulates General are in New York (5 East 68th
Street, New York, NY 10021, tel. 212-879-0600/0615; fax:
212-570-6206); Los Angeles (3457 Wilshire Blvd., Los Angeles, CA
90010; tel. 213-383-5126; fax: 213-487-3971); Houston (10900
Richmond Ave., Houston, TX 77042; tel. 713-785-1691; fax:
713-780-9644). Consulates are in San Francisco (1111 Columbus
Avenue, San Francisco, CA 94133; tel. 415-474-9571; fax:
415-441-4320); and Chicago (2 Illinois Center, Suite 1422233 N.
Michigan Avenue, Chicago, IL 60601; tel. 312-938-0101/4;
312-938-0311/0312; fax: 312-938-3148).
ECONOMY
Indonesia has a market-based economy in which the government
plays a significant role. There are 139 state-owned enterprises,
and the government administers prices on several basic goods,
including fuel, rice, and electricity.
In the mid-1980s, the government began eliminating regulatory
obstacles to economic activity. The steps were aimed primarily
at the external and financial sectors and were designed to
stimulate employment and growth in the non-oil export sector.
Annual real gross domestic product (GDP) growth averaged nearly
7% from 1987-97 and most analysts recognized Indonesia as a
newly industrializing economy and emerging major market. The
Asian financial crisis of 1997 altered the region's economic
landscape. With the depreciation of the Thai currency, the
foreign investment community quickly reevaluated its investments
in Asia. Foreign investors dumped assets and investments in
Asia, leaving Indonesia the most affected in the region. In
1998, Indonesia experienced a negative GDP growth of 13.1% and
unemployment rose to 15-20%. In the aftermath of the 1997-98
financial crisis, the government took custody of a significant
portion of private sector assets via debt restructuring, but
subsequently sold most of these assets, averaging a 29% return.
Indonesia has since recovered, albeit slower than some of its
neighbors, by recapitalizing its banking sector, improving
oversight of capital markets, and taking steps to stimulate
growth and investment, particularly in infrastructure. GDP
growth has steadily risen this decade, achieving real growth of
6.3% in 2007 and 6.1% growth in 2008. While the government has
reduced its 2009 growth forecast to 4.2%-4.7% given reduced
global demand, the consensus forecast is for growth of 3.5%.
In reaction to global financial turmoil and economic slowdown in
late 2008, the government moved quickly to improve liquidity,
secure alternative financing to fund an expansionary budget and
secure passage of a fiscal stimulus program worth more than $6
billion. Key actions to stabilize financial markets included
increasing the deposit insurance guarantee twentyfold, to IDR 2
billion (about U.S. $174,000); reducing bank reserve
requirements; and introducing new foreign exchange regulations
requiring documentation for foreign exchange purchases exceeding
U.S. $100,000/month. As a G-20 member, Indonesia has taken an
active role in the G-20 coordinated response to the global
economic crisis.
Economic Policy: After he took office on October 20, 2004,
President Yudhoyono moved quickly to implement a "pro-growth,
pro-poor, pro-employment" economic program. He appointed a
respected group of economic ministers who announced a "100-Day
Agenda" of short-term policy actions designed to energize the
bureaucracy. President Yudhoyono also announced an ambitious
anti-corruption plan in December 2004. The State Ministry of
National Development Planning (BAPPENAS) released in early 2005
a Medium Term Plan focusing on four broad objectives: creating a
safe and peaceful Indonesia; creating a just and democratic
Indonesia; creating a prosperous Indonesia; and establishing a
stable macroeconomic framework for development. President
Yudhoyono reshuffled his cabinet in December 2005, appointing
former Finance Minister Boediono as Coordinating Minister for
Economic Affairs and moving Sri Mulyani Indrawati from the
National Development Planning Agency to the Finance Ministry. In
May 2008, President Yudhoyono appointed Boediono as Governor of
Bank Indonesia, the central bank. In June 2008, President
Yudhoyono appointed Finance Minister Sri Mulyani Indrawati to
also serve as Coordinating Minister for Economic Affairs.
The Yudhoyono administration targeted average growth of 6.6%
from 2004-2009 to reduce unemployment and poverty significantly.
Indonesia's overall macroeconomic picture is stable. By 2004,
real GDP per capita returned to pre-financial crisis levels. In
2008, domestic consumption continued to account for the largest
portion of GDP, at 61%, followed by investment at 27.7%,
government consumption at 8.4%, and net exports at 0.6%. By all
measures, investment realization has climbed in each of the past
several years.
Following a significant run-up in global energy prices in
2007/2008, the Indonesian Government raised fuel prices by an
average of 29% on May 24, 2008 in an effort to reduce its fuel
subsidy burden. Fuel subsidies had been projected to reach Rp
265 trillion ($29.4 billion) in 2008, or 5.9% of GDP. The fuel
price hikes, along with rising food prices, led consumer price
inflation to a peak of 12.1% in September 2008. To help its
citizens cope with higher fuel and food prices, the Indonesian
Government implemented a direct cash compensation package for
low-income families through February 2009 and an extra range of
benefits including an expanded subsidized rice program and
additional subsidies aimed at increasing food production.
Subsequent declines in oil and gas prices allowed the government
to reduce the prices for subsidized diesel and gasoline. As of
March 2009, gasoline was selling for market rates but was
subject to a subsidized price cap in the event of an increase in
prices.
Banking Sector: Indonesia currently has 124 commercial banks, of
which 10 are majority foreign-owned and 28 are foreign joint
venture banks. The top 15 banks control about 70% of assets in
the sector. Four state-owned banks (Bank Mandiri, BNI, BRI, BTN)
control about 37.4% of assets. The Indonesian central bank, Bank
Indonesia (BI), announced plans in January 2005 to strengthen
the banking sector by encouraging consolidation and improving
prudential banking and supervision. BI hopes to encourage small
banks with less than Rp 100 billion (about U.S. $11 million) in
capital to either raise more capital or merge with healthier
"anchor banks" before end-2010, announcing the criteria for
anchor banks in July 2005. In October 2006, BI announced a
single presence policy to further prompt consolidation. The
policy stipulates that a single party can own a controlling
interest in only one banking organization. Controlling interest
is defined as 25% or more of total outstanding shares or having
direct or indirect control of the institution. BI plans to adopt
Basel II standards beginning in 2009 and to improve operations
of its credit bureau to centralize data on borrowers. Another
important banking sector reform was the decision to eliminate
the blanket guarantee on bank third-party liabilities. BI and
the Indonesian Government completed the process of replacing the
blanket guarantee with a deposit insurance scheme run by the
independent Indonesian Deposit Insurance Agency (also known by
its Indonesian acronym, LPS) in March 2007. The removal of the
blanket guarantee did not produce significant deposit outflows
from or among Indonesian banks. Sharia banking has grown in
Indonesia in recent years, but represents only 2.05% of the
banking sector, about $4.1 billion in assets as of November 2008.
Exports and Trade: Indonesia's exports grew to a record $136.8
billion in 2008, an increase of 10% from 2007. The largest
export commodities for 2007 were oil and gas (19.4%), minerals
(18.8%), electrical appliances (13.27%), rubber products (6.8%),
and textiles (3.6%). The top four destinations for exports for
2008 were Japan (12.8%), the U.S. (11.6%), Singapore (9.4%), and
China (7.2%). Meanwhile, total imports rose to $128.8 billion in
2008. The U.S. trade deficit with Indonesia increased 1.9% in
2007 to $10.1 billion ($4.2 billion in exports versus $14.3
billion in imports).
Oil and Minerals Sector: Indonesia left the Organization of
Petroleum Exporting Countries (OPEC) in 2008, as it had been a
net petroleum importer since 2004. Crude and condensate output
averaged 977,000 barrels per day (bpd) in 2008. In 2008, the oil
and gas sector is estimated to have contributed $25.3 billion of
government revenues, or 31.5% of the total. U.S. companies have
invested heavily in the petroleum sector. Indonesia ranked
eleventh in world gas production in 2007. In early 2007, Qatar
passed Indonesia as the world's number one exporter of liquefied
natural gas (LNG). Despite the declining trends, Indonesia's oil
and gas trade balance remained positive at $2.3 billion for 2006
and $156 million in 2007, according to unofficial statistics.
Indonesia has a wide range of mineral deposits and production,
including bauxite, silver, and tin, copper, nickel, gold, and
coal. Although the coal sector was open to foreign investment in
the 1990s, new investment was closed again after 2000. A new
mining law, passed in December 2008, opened coal to foreign
investment again. Total coal production reached 189.7 million
metric tons in 2008, including exports of 140.3 million tons.
Two U.S. firms operate two copper/gold mines in Indonesia, with
a Canadian and a U.K. firm holding significant investments in
nickel and gold, respectively. In 2007 Indonesia ranked fifth
among the world's top gold concentrate producers. Since 1998,
the number of new mines has declined compared with previous
years. This decline does not reflect Indonesia's mineral
prospects, which are high; rather, the decline reflects earlier
uncertainty over mining laws and regulations, low
competitiveness in the tax and royalty system, and investor
concerns over divestment policies and the sanctity of contracts.
Investment: President Yudhoyono and his economic ministers have
stated repeatedly their intention to improve the climate for
private sector investment to raise the level of GDP growth and
reduce unemployment. In addition to general corruption and legal
uncertainty, businesses have cited a number of specific factors
that have reduced the competitiveness of Indonesia's investment
climate, including: corrupt and inefficient customs services;
non-transparent and arbitrary tax administration; inflexible
labor markets that have reduced Indonesia's advantage in
labor-intensive manufacturing; increasing infrastructure
bottlenecks; and uncompetitive investment laws and regulations.
In each of the past three years, the Government of Indonesia has
announced a series of economic policy packages aimed at
stimulating investment and infrastructure improvements and
implementing regulatory reform. A new investment law was enacted
in 2007, which contains provisions to restrict the share of
foreign ownership in a range of industries. The government is
considering a review of Indonesia's negative list, but proposed
revisions had not been enacted as of March 2009.
On September 2, 2008, the DPR passed long-awaited tax reform
legislation. The legislation reduced corporate and personal
income tax rates as of January 1, 2009. Corporate income tax
rates fell from 30% to 28% in 2009 and will decline to 25% in
2010, with additional reductions for small and medium
enterprises and publicly listed companies. The legislation
raises the taxable income threshold for individuals, cuts the
maximum personal income tax from 35% to 30%, and provides lower
marginal personal income tax rates across four income
categories. Taxes on dividends will also fall from a maximum of
20% to a maximum of 10%. Long-planned labor reforms have been
delayed.
The passage of a new copyright law in July 2002 and accompanying
optical disc regulations in 2004 greatly strengthened
Indonesia's intellectual property rights (IPR) regime. Despite
the government's significantly expanded efforts to improve
enforcement, IPR piracy remains a major concern to U.S.
intellectual property holders and foreign investors,
particularly in the high-technology sector. In March 2006,
President Yudhoyono issued a decree establishing a National Task
Force for IPR Violation Prevention. The IPR Task Force was
intended to formulate national policy to prevent IPR violations
and determine additional resources needed for prevention, as
well as to help educate the public through various activities
and improve bilateral, regional, and multilateral cooperation to
prevent IPR violations. It has yet to fully realize these aims.
In 2007, Indonesia was removed from the U.S. Trade
Representative's "Priority Watch" list and placed on the "Watch"
list.
Environment: President Yudhoyono's administration has
significantly increased Indonesia's global profile on
environmental issues, and U.S.-Indonesia cooperation on the
environment has grown substantially. Indonesia is particularly
vulnerable to the effects of climate change, which include
rising sea levels and erosion of coastal areas, increased
frequency and intensity of extreme weather events, species
extinction, and the spread of vector-borne diseases. At the same
time, Indonesia faces challenges in addressing the causes of
climate change. Indonesia has the world's second-largest
tropical forest and the fastest deforestation rate, making it
the third-largest contributor of greenhouse gas emissions,
behind China and the U.S. In December 2007, Indonesia hosted the
13th Conference of the Parties of the United Nations Framework
Convention on Climate Change (UNFCCC), and led efforts to
highlight the importance of forests and deforestation in the
climate debate.
In 2004, President Yudhoyono initiated a multi-agency drive
against illegal logging that has significantly decreased illegal
logging through stronger enforcement activities. The State
Department and the U.S. Trade Representative negotiated with the
Indonesian Ministries of Trade and Forestry the U.S.
Government's first Memorandum of Understanding on Combating
Illegal Logging and Associated Trade. Presidents George W. Bush
and Yudhoyono announced the MOU during President Bush's November
2006 visit to Indonesia. Implementation of the MOU includes
collaboration on sustainable forest management, improved law
enforcement, and improved markets for legally harvested timber
products. This effort will strengthen the enabling conditions
for avoiding deforestation, specifically addressing the trade
issues that are involved.
The U.S. Government contributed to the start of the Heart of
Borneo conservation initiative to conserve a high-biodiversity,
transboundary area that includes parts of Indonesia, Malaysia,
and Brunei. The three countries launched the Heart of Borneo
initiative in February 2007. In 2009, the Governments of
Indonesia and the U.S. concluded a Tropical Forest Conservation
Act (TFCA) agreement. The agreement reduces Indonesia's debt
payments to the U.S. over the next 8 years; these funds will be
redirected toward tropical forest conservation in Indonesia.
Indonesia is also home to the greatest marine biodiversity on
the planet. President Yudhoyono called for a Coral Triangle
Initiative (CTI) in August 2007. The Coral Triangle Initiative
is a regional plan of action to enhance coral conservation,
promote sustainable fisheries, and ensure food security in the
face of climate change. In December 2007, the U.S. Government
announced its support for the six CTI nations (Indonesia,
Malaysia, Philippines, Timor-Leste, Papua New Guinea, and
Solomon Islands). Since then, the United States has provided
$8.4 million to this initiative. With projected funding of $32
million over five years, the U.S. is the largest bilateral donor
to CTI, and President Bush endorsed the CTI proposal formally at
the 2007 Asia-Pacific Economic Cooperation (APEC) Summit.
Indonesia hosted the first-ever World Oceans Conference in
Manado, North Sulawesi, May 11-15, 2009. The World Oceans
Conference was also the venue for the Coral Triangle Initiative
Summit, at which leaders from the six CTI nations launched the
CTI Regional Plan of Action. Top government officials and other
leaders discussed the scientific interplay between ocean
degradation, climate and weather patterns, and fishing stocks.
NATIONAL SECURITY
Indonesia's armed forces (Tentara Nasional Indonesia, or TNI)
total approximately 350,000 members, including the army, navy,
marines, and air force. The army is the largest branch with
about 280,000 active-duty personnel. Defense spending in the
national budget accounts for 1.8% of GDP, but is supplemented by
revenue from many military businesses and foundations.
The Indonesian National Police were a branch of the armed forces
for many years. The police were formally separated from the
military in April 1999, a process that was completed in July
2000. With 250,000 personnel, the police represent a much
smaller portion of the population than in most nations.
Indonesia has peaceful relations with its neighbors. Without a
credible external threat in the region, the military
historically viewed its prime mission as assuring internal
security. Military leaders have said that they wish to transform
the military to a professional, external security force,
providing domestic support to civilian security forces as
necessary.
Throughout Indonesian history, the military maintained a
prominent role in the nation's political and social affairs. A
significant number of cabinet members have had military
backgrounds, while active duty and retired military personnel
occupied a large number of seats in the parliament. Commanders
of the various territorial commands played influential roles in
the affairs of their respective regions. With the inauguration
of the newly-elected national parliament in October 2004, the
military no longer has a formal political role, although it
retains important political influence.
FOREIGN RELATIONS
Since independence in 1945, Indonesia has espoused a "free and
active" foreign policy, seeking to play a role in regional
affairs commensurate with its size and location but avoiding
involvement in conflicts among major powers. Indonesian foreign
policy under the "New Order" government of President Suharto
moved away from the stridently anti-Western, anti-American
posturing that characterized the latter part of the Soekarno
era. Following Suharto's ouster in 1998, Indonesia's Presidents
have preserved the broad outlines of Suharto's independent,
moderate foreign policy. The traumatic separation of East Timor
from Indonesia after an August 1999 East Timor referendum, and
subsequent events in East and West Timor, strained Indonesia's
relations with the international community.
A cornerstone of Indonesia's contemporary foreign policy is its
participation in the Association of Southeast Asian Nations
(ASEAN), of which it was a founding member in 1967 with
Thailand, Malaysia, Singapore, and the Philippines. Since then,
Brunei, Vietnam, Laos, Burma, and Cambodia also have joined
ASEAN. While organized to promote common economic, social, and
cultural goals, ASEAN acquired a security dimension after
Vietnam's invasion of Cambodia in 1979. The security policy
aspect of ASEAN expanded with the establishment of the ASEAN
Regional Forum in 1994, in which 22 countries participate,
including the United States. At ASEAN's Singapore Summit in
November 2007, the organization's members signed a new charter,
a small step toward the agreed goal of creating an ASEAN
Community to propel greater integration in the areas of
political and security affairs, economics, and socio-cultural
affairs. Indonesia was a strong proponent of further
integration. Indonesia also was one of the founders of the
Non-Aligned Movement (NAM) and has taken moderate positions in
its councils. As NAM Chairman in 1992-95, Indonesia led NAM
positions away from the rhetoric of North-South confrontation,
advocating instead the broadening of North-South cooperation in
the area of development. Indonesia continues to be a prominent
leader of the Non-Aligned Movement.
Indonesia often supports NAM and Group of 77 (G-77) foreign
policy views, taking positions regarding human rights contrary
to the United States. In May 2005, the Yudhoyono administration,
in a major effort to reinvigorate its leadership of the NAM and
reset the movement's future course, hosted an Asia-Africa Summit
to commemorate the founding of the NAM in Bandung, Indonesia in
1955.
A secular state, Indonesia has the world's largest Muslim
population and is a member of the Organization of the Islamic
Conference (OIC). It carefully considers the interests of
Islamic solidarity in its foreign policy decisions while
providing a moderating influence in the OIC. President Wahid,
for example, pursued better relations with Israel; Foreign
Minister Wirajuda participated in the November 2007 Middle East
peace conference in Annapolis.
After 1966, Indonesia welcomed and maintained close relations
with the donor community, particularly the United States,
Western Europe, Australia, and Japan, through the
Intergovernmental Group on Indonesia (IGGI) and its successor,
the Consultative Group on Indonesia (CGI), which have provided
substantial foreign economic assistance. Donors in recent years
have expanded assistance to Indonesia, due to its rapid
democratic consolidation.
Indonesia has been a strong supporter of the Asia-Pacific
Economic Cooperation (APEC) forum. Largely through the efforts
of President Suharto at the 1994 meeting in Bogor, Indonesia,
APEC members agreed to implement free trade in the region by
2010 for industrialized economies and 2020 for developing
economies.
In 2008, Indonesia finalized its Economic Partnership Agreement
(EPA) with Japan, a significant trade partner and Indonesia's
biggest foreign investor. The agreement is Indonesia's first
bilateral free trade deal and exempts Indonesia from 90% of
Japanese import duties.
President Yudhoyono has sought a higher international profile
for Indonesia. In March 2006, Yudhoyono traveled to Burma to
discuss democratic reform and visited several Middle Eastern
countries in April and May 2006. Yudhoyono delivered a major
speech in Saudi Arabia, encouraging the Muslim world to embrace
globalization and technology for greater social and economic
progress. In November 2006, Indonesia sent about 1,000
peacekeeping troops to southern Lebanon to be part of the UN
Interim Force in Lebanon (UNIFIL) and replaced those troops with
a second contingent a year later. In 2007 and 2008, Indonesia
held a non-permanent seat on the UN Security Council. President
Yudhoyono has also developed strategic partnerships with several
countries, including the Netherlands. In November 2008,
President Yudhoyono suggested the U.S. and Indonesia work
together to build a more strategic partnership.
U.S.-INDONESIAN RELATIONS
The United States has important economic, commercial, and
security interests in Indonesia. It 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 U.S. are positive
and have advanced since the election of President Yudhoyono in
October 2004. The U.S. played a role in Indonesian independence
in the late 1940s and appreciated Indonesia's role as an
anti-communist bulwark 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 U.S. and Indonesia on
counter-terrorism 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,
principally Jemaah Islamiyah, in Indonesia. The United States
has welcomed Indonesia's contributions to regional security,
especially its leading role in helping restore democracy in
Cambodia and in mediating territorial disputes in the South
China Sea. During Secretary’s Clinton’s visit to Indonesia in
early 2009, she and Foreign Minister Wirajuda announced that the
U.S. and Indonesia would begin discussions on developing a
comprehensive partnership between the two countries.
The U.S. 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 U.S. 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 U.S. had urged the Indonesian Government to
identify and bring to justice the perpetrators of the August
2002 ambush murders of two U.S. 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
U.S. 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.
Under the terms of the FY 2008 FOAA, signed into law in December
2007, Congress did not reimpose restrictions. However, it
prevented a portion of U.S. security assistance from being
released before the Secretary of State reported on the status of
certain measures of military reform, of accountability for past
human rights abuses, of public access to Papua, and of the
investigation into the 2004 murder of a prominent human rights
activist.
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.
Development Assistance from the United States to Indonesia
The U.S. 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 birthrate. Today, USAID
assistance programs focus on basic and higher education,
democratic and decentralized governance, economic growth,
health, water, sanitation, and the environment. Future programs
will place a greater emphasis on energy.
The United States was one of the lead donors in the
reconstruction efforts in the tsunami-hit area of Aceh. Most of
the U.S. tsunami relief program is complete, although our
efforts toward the construction of the Aceh west coast highway
continues. The U.S. will remain actively engaged in conflict
prevention and resolution efforts in Aceh.
Improving the Quality of Education: In October 2003, President
Bush announced a $157 million Indonesia Education Initiative for
2004-2009 to improve the quality of education in Indonesia. This
initiative is a cornerstone of the U.S. Government assistance
program in Indonesia, directly responding to Indonesia's
priorities and reflecting a joint Indonesia-U.S. commitment to
revitalize education for the next generation of Indonesia's
leaders. Since the initiative began in 2005, more than 1,476
schools, 23,612 educators, and 345,983 students have benefited
from the assistance to improve teaching and learning, education
governance, community involvement in school management, and
public-private alliances. The initiative has also sparked donor
interest toward increased coordination and cooperation both at
the national and field levels. By 2010, the program will promote
ownership of new methods for delivering basic education
assistance directly to the local level where it can be more
effectively and accountably targeted. Programs include:
* Decentralized Basic Education (DBE): As the main component of
the Indonesia Education Initiative, the Decentralized Basic
Education Project focuses on improving the quality and relevance
of basic education in primary and junior secondary schools.
Through technical assistance and training, the program has three
goals: to assist local governments and communities to manage
education services more effectively; to enhance teaching and
learning to improve student performance in key subjects such as
math, science, and reading; and to ensure that Indonesia’s youth
gain more relevant life and work skills to better compete for
jobs in the modern economy. USAID successfully utilizes
public-private alliances to mobilize corporate sector resources
for education. In partnership with ConocoPhillips, USAID is
helping rehabilitate schools damaged by the May 2006 earthquake
in Yogyakarta as well as Central Java; and Intel is helping
teachers use technology in their classrooms. Partnerships with
three U.S. universities--the University of Pittsburg, Florida
State University, and the University of Massachusetts--and 14
Indonesian universities are enabling teachers participating in
the program to receive academic credit for their work, helping
them meet new Government of Indonesia recertification
requirements. DBE also promotes the use of information
technology for education; the importance of early childhood
education; in-service teacher training; and non-formal work and
life skills.
* Opportunities for Vulnerable Children: This program prepares
the foundation for an inclusive education system by focusing on
the educational rights and needs of children with visual
impairments (blindness and low vision) by using an effective
model for inclusion of students with visual impairments within
the public education infrastructure that benefits both students
with visual impairments and other disenfranchised populations.
These activities have led to a substantial increase in the
number of children with visual impairments attending school, and
increases in the availability and quality of inclusive education
services. Replicable models are being developed to expand the
reach of the program to Aceh, South Sulawesi, and Central Java.
In partnership with Indonesian local universities and Hilton
Perkins International, a pre-service university-level program is
developed to equip new teachers with effective teaching
strategies and clear understanding of children with special
needs.
* Sesame Street Indonesia/Jalan Sesama: In partnership with the
Sesame Workshop, USAID is supporting the development of a new
Indonesian co-production of the renowned Sesame Street
television show. Indonesia’s “Jalan Sesama” is one of the
largest partnerships between USAID and the Sesame Workshop. By
watching “Jalan Sesama” millions of Indonesian children will be
better equipped to start and stay in school. The program went on
the air in 2007 and more than 3 million Indonesian children have
viewed the broadcast. The show is currently ranked second in its
time slot.
* Higher Education: The Indonesia Education Initiative, run by
the Public Affairs Section (PAS) of the U.S. Embassy,
complements USAID’s Basic Education Programs with a range of
educational scholarships and exchanges, and English language
learning opportunities. A partnership with the University of
Kentucky is assisting three Indonesian universities to upgrade
their academic programs in areas critical for economic growth
such as agriculture, business, engineering, and public
administration. A three-way partnership between USAID, the
Government of Aceh Province, and Chevron supports the
development of the Aceh Polytechnic, a new institution to
provide quality education in applied technology fields such as
information technology and electrical engineering that are in
high demand in the region. A far more robust higher education
program by PAS and USAID will commence in late 2009.
Effective Democracy and Decentralized Governance: This objective
aims to support democratic reforms by supporting effective and
accountable local governance, addressing conflict and
encouraging pluralism, and consolidating national-level
democratic reforms.
Mitigation of Conflict and Support for Peace: USAID is a key
donor working to mitigate conflict and build peace in
post-conflict areas, such as Aceh, Papua, Central Sulawesi, and
Maluku. Assistance activities focus on: conflict
resolution/mitigation; civilian-military affairs; livelihoods
development in conflict areas; drafting and monitoring of
relevant legislation; and emergency and post-conflict
transitional assistance to conflict-affected persons.
Fighting Trafficking in Persons: USAID is assisting the
Government of Indonesia and civil society to develop policies
and procedures to prevent trafficking in women, girls, and men
and provide protection to survivors of trafficking. The USAID
Trafficking in Persons program is expected to end in late 2009.
Justice Sector Reforms: This includes support for the
bureaucratic reform efforts of the Attorney General’s Office
through technical assistance and training for prosecutors. USAID
also works with the Supreme Court and the Constitutional Court
to develop a more effective, professional, transparent,
accountable, and independent executive branch.
Legislative Strengthening: USAID provides institutional support
to the National House of Representatives, National Regional
Representative Council, and over 60 district legislative
councils. Activities include promoting constituency and media
outreach; developing the capacity to draft and analyze
legislation and operational budgets; and supporting legislative
commissions to carry out their functions.
Local Governance Strengthening and Decentralization Support:
This activity supports Indonesia’s decentralization through
assistance to more than 60 local governments to increase
governmental accountability and transparency, strengthen the
local legislative process, promote citizen engagement, improve
the planning and budget process, and promote more responsive
public services. At the national level, USAID supports the
Government of Indonesia and civil society to improve
decentralization policies.
Promoting Democratic Culture: USAID supports civil society
organizations and government institutions to strengthen
democratic civic culture, respect for pluralism, religious
diversity, and the rights of women and minority groups.
Activities under this program include civic education, advocacy,
engaging traditional leaders, building networks to support
tolerance and pluralism, and assisting the government in
reviewing policies that conflict with the constitution and human
rights standards.
Elections and Political Process: USAID supported the 2009
parliamentary and presidential elections through an elections
support package that included political party development,
election administration, voter education, election monitoring,
and oversight and strengthening of the legal framework.
Tsunami Reconstruction: The U.S. Government was one of the first
donors to respond to the disaster. Through numerous grants to
non-governmental organizations (NGOs), international
organizations, and UN agencies, USAID has helped stabilize the
humanitarian situation in Aceh, avert a public health crisis,
and provide relief services to survivors.
Rebuilding Shelter and Key Infrastructure: USAID is assisting
communities by providing much needed shelter, working with the
Indonesian Government to rebuild key infrastructure and ensuring
proper mapping and planning is considered through local
cooperation.
Restoring Livelihoods: USAID enables communities to direct
capacity building to benefit people at the local level. USAID's
Community Based Recovery Initiative is working with 59 villages
to organize local capacity-building initiatives.
Strengthening Capacity and Governance: USAID is providing
assistance to restore local government services in Aceh, working
to increase governmental accountability and transparency,
strengthen the local legislative process, promote citizen
engagement and civil service reform, and improve the delivery of
basic services.
Economic Growth Strengthened and Employment Created: Assistance
to the Indonesian Government and private sector focuses on
sustaining growth and creating jobs by improving the trade and
investment climate, increasing competitiveness in key
agribusiness and industry sectors, and enhancing the safety and
soundness of the financial system. USAID is working with
Indonesians to ensure that future generations enjoy an
increasingly prosperous, democratic, and stable country.
Trade and Investment Climate: Efforts to promote a transparent
and predictable legal and regulatory business climate aim to
reduce the hidden costs of doing business, increase certainty,
promote good governance, enhance trade and investment, and
create jobs.
Agribusiness and Industry Competitiveness: Assistance to leading
agribusiness and industry sub-sectors fuels growth, exports, and
jobs. These efforts also drive increased productivity and
national competitiveness through the forging of public and
private partnerships.
Financial Sector Safety and Soundness: Assistance to key
financial and non-bank financial institutions helps build a
sound financial infrastructure through improved oversight,
transparency, and governance.
Improving the Quality of Basic Human Services: The USAID Basic
Human Services Office provides assistance to Indonesia through
an integrated strategy that aims to improve the health of local
communities through support for maternal and child health,
disease surveillance and control, food and nutrition, and access
to safe drinking water through better watershed management and
water treatment.
Environmental Services: This program supports better health
through improved water resources management and expanded access
to clean water and sanitation services. With a ridge to reef
approach, partners improve water resource management from
watershed sources, along rivers, through cities, and to coastal
reefs. In the upper watershed, the program promotes forest
management, biodiversity conservation, and land use planning to
protect a steady, year-round source of clean water. Further
downstream, the program strengthens municipal water utilities to
improve and expand piped water and sanitation services to
communities. Stakeholder forums link upstream and downstream
communities to build consensus on water and waste management
issues. Marginalized urban communities also benefit from the
introduction of safe drinking water through Air Rahmat, a home
chlorination product being introduced to the market through a
public-private partnership.
Under the Maintaining Healthy Ecosystem special objective, the
Orangutan Conservation Service program is targeting selected
wild orangutan populations in Kalimantan and Sumatra. The USAID
program will: 1) reduce the level of threat to select orangutan
populations, 2) develop strategies that garner support by a
multi-stakeholder constituency, 3) establish networks to support
improved law enforcement and conservation management, and 4) set
up sustainable financing schemes for long-term conservation at
the sites. This project will not support orangutan
rehabilitation, re-introductions, or translocation efforts. This
approach is consistent with the scientific consensus that the
first priority in orangutan conservation must be the protection
of habitat and populations in the wild.
Health Services: Working with the government, NGOs, and other
partners, USAID focuses on maternal, neonatal, and child health;
reproductive health; nutrition; HIV/AIDS, tuberculosis, malaria;
and decentralization of the health sector. USAID works to
strengthen government commitment to improve health services,
ensure sustainability and local ownership, and to build capacity
to expand and improve access to quality health services
including health centers, hospitals, private providers and
laboratory services; the principal beneficiaries include women,
newborns, and children, and high-risk populations for HIV/AIDS
and infectious diseases. Improved health-seeking behaviors
within communities link key hygiene promotion interventions,
such as hand-washing with soap to reduce diarrheal disease, a
major cause of childhood death, and increased testing and
treatment for infectious diseases. Engagement of civil society
and the private sector to increase equity and access to health
services is an important element of USAID’s programs in the
health arena.
USAID's avian influenza (AI) program includes integrated public
and private sector AI surveillance and response for both animal
and human outbreaks and behavior change communications to
minimize behaviors that facilitate the transmission of AI to
both poultry and people.
Food and Nutrition: Improving the nutritional status of
Indonesians, USAID food assistance targets poor communities.
These activities directly affect women and children through
targeted supplemental feeding and nutritional education
activities. The food assistance program works with villages to
construct public latrines, washing facilities, and protected
water stations and to organize solid waste disposal efforts to
better protect community health. Over one million people will be
direct recipients of USAID food assistance under this program.
Principal U.S. Embassy Officials
Ambassador--Cameron R. Hume
Deputy Chief of Mission--John A. Heffern
Political Counselor--Joseph L. Novak
Economic Counselor--Peter D. Haas
Management Counselor--Michael C. Mullins
USAID Director--Walter E. North
Defense Attache--COL Kevin E. Richards
Consul General--Jeffrey S. Tunis
Public Affairs Officer--Michael H. Anderson
Commercial Counselor--Joseph B. Kaesshaefer
Department of Agriculture Office--Dennis Voboril
Regional Security Officer--Jeffrey D. Lischke
Office of Defense Cooperation--LTC James O. Robinson
Legal Attache--(Acting) David C. Smith
Department of Justice Office--Gerald H. Heuett Jr.
The U.S. Embassy in Indonesia is located at Jalan Medan Merdeka
Selatan 3-5, Jakarta (tel. (62-021) 3435-9000). U.S. mail to the
Embassy may be addressed to FPO AP 96520.
The U.S. Consulate General in Surabaya is located at Jalan Dr.
Sutomo 33, Surabaya, East Java (tel. (62-31) 568-2287).
Principal Officer--Caryn R. McClelland
The U.S. Consulate in Medan is located at Jl. Walikota no. 13,
Medan, North Sumatra (tel. (62-61) 415-2200).
Principal Officer--Sean Stein
The U.S. Consular Agency in Bali is located at Jalan Hayam Wuruk
188, Bali (tel. (62-361) 233-605.
The State Department lifted its travel warning for Indonesia in
May 2008 due to objective improvements in the security situation
in the country.
For information on economic trends, commercial development,
production, trade regulations, and tariff rates, contact the
International Trade Administration, U.S. Department of Commerce,
Washington, DC 20230.
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program
advises Americans traveling and residing abroad through Country
Specific Information, Travel Alerts, and Travel Warnings.
Country Specific Information exists for all countries and
includes information on entry and exit requirements, currency
regulations, health conditions, safety and security, crime,
political disturbances, and the addresses of the U.S. embassies
and consulates abroad. Travel Alerts are issued to disseminate
information quickly about terrorist threats and other relatively
short-term conditions overseas that pose significant risks to
the security of American travelers. Travel Warnings are issued
when the State Department recommends that Americans avoid travel
to a certain country because the situation is dangerous or
unstable.
For the latest security information, Americans living and
traveling abroad should regularly monitor the Department's
Bureau of Consular Affairs Internet web site at
http://www.travel.state.gov, where the current Worldwide
Caution, Travel Alerts, and Travel Warnings can be found.
Consular Affairs Publications, which contain information on
obtaining passports and planning a safe trip abroad, are also
available at http://www.travel.state.gov. For additional
information on international travel, see
http://www.usa.gov/Citizen/Topics/Travel/International.shtml.
The Department of State encourages all U.S. citizens traveling
or residing abroad to register via the State Department's travel
registration website or at the nearest U.S. embassy or consulate
abroad. Registration will make your presence and whereabouts
known in case it is necessary to contact you in an emergency and
will enable you to receive up-to-date information on security
conditions.
Emergency information concerning Americans traveling abroad may
be obtained by calling 1-888-407-4747 toll free in the U.S. and
Canada or the regular toll line 1-202-501-4444 for callers
outside the U.S. and Canada.
The National Passport Information Center (NPIC) is the U.S.
Department of State's single, centralized public contact center
for U.S. passport information. Telephone: 1-877-4-USA-PPT
(1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information
is available 24 hours, 7 days a week. You may speak with a
representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time,
excluding federal holidays.
Travelers can check the latest health information with the U.S.
Centers for Disease Control and Prevention in Atlanta, Georgia.
A hotline at 800-CDC-INFO (800-232-4636) and a web site at
http://wwwn.cdc.gov/travel/default.aspx give the most recent
health advisories, immunization recommendations or requirements,
and advice on food and drinking water safety for regions and
countries. The CDC publication "Health Information for
International Travel" can be found at
http://wwwn.cdc.gov/travel/contentYellowBook.aspx.
Further Electronic Information
Department of State Web Site. Available on the Internet at
http://www.state.gov, the Department of State web site provides
timely, global access to official U.S. foreign policy
information, including Background Notes and daily press
briefings along with the directory of key officers of Foreign
Service posts and more. The Overseas Security Advisory Council
(OSAC) provides security information and regional news that
impact U.S. companies working abroad through its website
http://www.osac.gov
Export.gov provides a portal to all export-related assistance
and market information offered by the federal government and
provides trade leads, free export counseling, help with the
export process, and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce,
provides authoritative economic, business, and international
trade information from the Federal government. The site includes
current and historical trade-related releases, international
market research, trade opportunities, and country analysis and
provides access to the National Trade Data Bank.
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