Indonesia-US Relations In The Context Of President Obama’s Visit


By Udai Bhanu Singh

Indonesia is the second stopover after India in President Barack Obama’s four-nation tour of Asia that also includes South Korea and Japan. The much deferred visit to the leading ASEAN member state with the largest Muslim population in the world is important beyond mere symbolism. It represents the United States’ attempt to redefine its role in Asia at a time when its strategic and economic clout was beginning to be questioned.

From the world’s largest democracy to the third largest, President Obama (representing the second largest democracy) arrived on November 9 in a country which was dominated by authoritarian Suharto until his resignation in May 1998. Indonesia had opted for ‘democracy first’ as a desirable domestic paradigm in preference to ‘security first’. Obama’s Indonesia visit occurs two days after neighbouring Myanmar held its elections and had yet to make a clear transition. Despite fears that Obama’s visit may be cancelled yet again due to volcanic eruptions from Mount Erapi, Air Force One landed in Jakarta. Twice earlier (in March and June) he was forced to cancel plans to visit Indonesia. President Obama is expected to visit the Istiqlal Grand Mosque, the Kalibat Heroes Cemetery and to deliver a lecture at the University of Indonesia besides holding bilateral talks with President Yudhoyono.

In 2008 President Susilo Bambang Yudhoyono had visited the US immediately after the election of Obama as President and emphasised on the need for Indonesia-US strategic partnership. President Yudhoyono (who received military training and a Masters degree from the US) got re-elected to office in 2009. Indonesia was the second country that the US Secretary of State chose to visit in February 2009 immediately after assuming office under the Obama Administration. A “Comprehensive Partnership Agreement” (CPA) is expected to put the seal on political/security, economic and development, and social-cultural cooperation which are already underway through a host of agreements that have been signed by officials of the two countries since Obama took office. The US President’s personal links with Indonesia will help tide over the rough edges in the relationship.


The US cannot ignore Indonesia’s credentials as the largest Southeast Asian nation which is a vibrant democracy, a bastion of moderate Islam, committed to multilateralism (ASEAN headquarters is based in Jakarta), counter terrorism and maritime security. As China reasserted itself in the South China Sea (claimed by Vietnam, the Philippines, Malaysia, Brunei and Indonesia), the Indonesian Foreign Minister rejected China’s efforts to keep the US out of the dispute. The ASEAN Summit followed (held for the first time in New York), which Indonesian President Yudhoyono could not attend. So far a South China Sea Code of Conduct acceptable to China has not yet been evolved . Equally, Indonesia is cognizant of the fact that China must not get the impression that ASEAN is ganging up with the US against China. Interestingly, Indonesia has already formally taken over the chairmanship for 2011 of the ASEAN from Vietnam at the close of the 17th ASEAN Summit at Hanoi.

The US Department of Defence and the Indonesian Ministry of Defence signed a Framework Arrangement on Cooperative Activities in the Field of Defence on June 9 to cover the areas of security dialogue, training, the defence industry, procurement, maritime security, etc. Military ties between the two countries are expected to improve as the Indonesian MoD addresses human rights issues, which have bedevilled the relationship in the past, especially at the time of the East Timor crisis. In July the US lifted the ban on Kopassus Special Forces.

While the US copes with terrorism, Indonesia has been a victim of terrorism itself as the October 2002 Bali bombings and the July 2009 terrorist attacks amply illustrate. In the absence of the draconian laws under the Suharto regime, the US still expects sterner action from Jakarta against the Jemaah Islamiyah terrorists. Washington is already funding some anti-terror activities of Indonesia’s counterterrorism unit, particularly since the Bali bombings of 2002.

While Indonesia cannot afford to annoy the Major Powers, it is sensitive about its image as a large nation of Southeast Asia and does not favour abdicating that role. Regional cooperation in joint patrolling of the seas (including the Malacca Straits Coordinated Patrol) in conjunction with US intelligence sharing has brought down piracy incidents.

The US on its part provided timely aid during the tsunami. It also plans to remain engaged in conflict prevention and resolution in Aceh. (In contrast, Myanmar had totally refused US aid at the time of Cyclone Nargis). Further, it is engaged in cooperation in the area of non-traditional security threats.


The Indonesian economy has experienced enough turbulence and it is in the US’ larger interest to project Indonesia as a centre of stability. US Secretary of Commerce had led the first cabinet level trade mission to Indonesia in May 2010 to promote US clean energy technologies in Indonesia. The US Administration has earmarked $165 million over five years for student exchange programmes. Another $136 million over three years has been earmarked for climate change projects.

Differences exist in Indonesia-US relations, as typified by the imposition in October of duties on coated paper from Indonesia, and earlier on the IMF package. The US has differences with Indonesia over the latter’s alleged non-compliance with “internationally recognized labour standards”. The US which is aware of Indonesia’s potential as a burgeoning market, investment destination and as a source of raw material is troubled by infrastructure and corruption bottlenecks.

Before President Obama moves to the two East Asian countries on his itinerary (South Korea and Japan) he would like to be assured that he along with President Yudhoyono have set US- Indonesia relations on a more mature path. Just as President Yudhoyono must anticipate the trajectory of India-Indonesia relations when he arrives as India’s guest at the Republic Day early next year.

Table1: USA: Exports to /Imports from Indonesia
In US$ million
Year Exports Imports
1989 1,256.34 3,54.45
1990 1,896.73 3,343.10
1991 1,891.48 3,240,52
1992 2,779.48 4,529.45
1993 2,770.29 5,435,43
1994 2,808.77 6,546.94
1995 3,359.62 7,435.33
1996 3,976.75 8,249.90
1997 4,522.29 9,188.40
1998 2,298.92 9,340.59
1999 2,038.34 9,525.38
2000 2,401.89 10,367.03
2001 2,520.62 10,103.64
2002 2,555.83 9,643.29
2003 2,516.37 9,515.07
2004 2,671.41 10,810.51
2005 3,053.91 12,014.34
2006 3,078.47 13,424.71
2007 3,969.65 14,301.25
2008 5,644.47 15,799.13
2009 5,106.98 12,938.58

Originally published by Institute for Defence Studies and Analyses ( at

Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA)

The Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), is a non-partisan, autonomous body dedicated to objective research and policy relevant studies on all aspects of defence and security. Its mission is to promote national and international security through the generation and dissemination of knowledge on defence and security-related issues. The Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) was formerly named The Institute for Defence Studies and Analyses (IDSA).

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