Stone elephant with hibiscus flowers, image of the Hindu deity Ganesha, Jakarta, Indonesia

Indonesia A political heavyweight in South-East Asia

Indonesia has gone through a significant process of democratisation over the last two decades. Both politically and economically, the country is taking on more and more responsibility in South-East Asia. It also plays an important role for global climate action. Indonesia is a member of the G20 group of major industrialised countries and emerging economies.

Bhinneka Tunggal Ika – unity in diversity: this national motto, taken from Sanskrit, which is inscribed on the coat of arms of the Republic of Indonesia, was adopted by the country after it proclaimed its independence in 1945. The Indonesian archipelago is the fourth most populous country in the world. Its roughly 274 million inhabitants belong to about 300 different ethnic groups and, together, speak a total of more than 700 different languages and dialects.

Peaceful transition to democracy

Street scene in Jakarta, Indonesia — Straight to

For more than three decades, Indonesia was under the dictatorial rule of President Haji Muhammad Suharto. After major social unrest, he was forced to step down in 1998. Since then, the country has undergone profound political and social change.

Indonesia is now seen as a largely stable democracy and has achieved considerable progress in fighting poverty. There is still potential for further reforms to strengthen the rule of law, increase religious tolerance and improve women’s rights, reduce regional and social disparities, and improve oversight and control over the security forces.

German development cooperation with Indonesia

Indonesia is one of those partners of German development cooperation that – due to their high regional significance and their strong economic performance – play a crucial role in resolving global development issues. Indonesian-German development cooperation focuses on three core areas:

Climate and energy, just transition
Conserving nature and natural resources, protecting life on Earth
Sustainable economic development, training and employment

In addition, the Federal Ministry for Economic Cooperation and Development (BMZ) is also supporting Indonesia in reforming its tax and fiscal policy in order to increase public revenue. Support is also being provided for efforts to develop and expand health insurance coverage and social security systems. The health insurance scheme introduced with German support in 2014 now has more than 220 million members.

At the government negotiations in November 2021, the BMZ made new commitments of 65 million euros to Indonesia. The commitments consisted of 44 million euros for Technical Cooperation and 21 million euros for Financial Cooperation. Another 1.35 million euros had already been approved in the spring of 2021 in order to respond to the COVID-19 pandemic within the framework of ongoing projects.

A worker at the Lahendong geothermal site on Sulawesi Island, Indonesia. The hot steam produced here is fed to a nearby power plant to generate electricity.

In order to protect the climate as a global public good, Germany is assisting the Indonesian government in its efforts to create the political, legal and technical prerequisites for using geothermal energy, hydropower and solar energy.

A large share of Indonesia’s greenhouse gas emissions is caused by the destruction of its tropical forests. The BMZ is supporting the Indonesian government in its efforts to implement forestry reforms which lead to the conservation and sustainable use of forests.

Vocational school for industrial mechanics ATMI in Solo in Indonesia. Around 450 pupils are trained here in various fields, such as welders, locksmiths and toolmakers.

Good training and employment opportunities for the broad population are a prerequisite for the sustainable reduction of poverty. One focus of cooperation with Indonesia is therefore on vocational training: the BMZ is assisting the Indonesian government with the comprehensive modernisation of the vocational training system.