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

Indonesia A political heavyweight in South-East Asia

Bhinneka Tunggal Ika – unity in diversity: this motto, which comes from Sanskrit, has adorned the national emblem of the Republic of Indonesia ever since the country proclaimed its independence in 1945. The approximately 264 million inhabitants of this island country belong to roughly 300 different ethnic groups and speak over 700 languages and dialects. Indonesia is the fourth most populous country in the world. With almost 90 per cent of people adhering to Islam, it is home to the largest Islamic community on Earth.

Indonesia is located on the Pacific Ring of Fire, the most geologically active region on Earth, which is frequently hit by earthquakes, tsunamis, and volcano eruptions. In September 2018, the island of Sulawesi was hit by an earthquake followed by a tsunami, destroying large parts of the affected region and killing more than 2,000 people.

Peaceful transition to democracy

For more than three decades, Indonesia was under the dictatorial rule of President Haji Mohammad Suharto. In May 1998, after serious social unrest triggered by the Asian financial crisis of 1997-8, he was forced to step down. There followed a largely peaceful change in the country's political course and, since then, Indonesia has been undergoing a far-reaching process of social transformation. The country has already made significant progress and is now regarded as a largely stable democracy.

Both politically and economically, Indonesia is shouldering more and more responsibility in South-East Asia. The emerging economy is a member of the Group of 20 (G20). It is an economic heavyweight in the region and thus plays a key role in the Association of Southeast Asian Nations (ASEAN).

Development cooperation

Relations between Indonesia and Germany are good. The bilateral development cooperation programme between the two countries has been designed to take account of Indonesia's regional and global importance. Just like Brazil, India, Mexico and South Africa, Indonesia is one of the countries that are regarded as major regional powers of the future and have a crucial role to play, as "global development partners", in resolving global development issues.

For example, Indonesia is an important partner for Germany's development cooperation in the field of climate action. The environment and energy are thus priority areas of Indonesian-German development cooperation. Germany also supports Indonesia's efforts to foster sustainable economic development, with a special focus on vocational training.

Street scene in Jakarta, Indonesia

Overcoming the consequences of dictatorship Internal link

Since the removal of the Suharto dictatorship in 1998, Indonesia has been going through a process of political transformation. Numerous reform laws and decrees have been adopted since then. For example, freedom of the press has been granted, the banking sector has been reformed, social protection systems have been established or enhanced, and the police and military have withdrawn completely from the political arena.

Dancers in traditional costume in Borneo

Regional disparity not yet overcome Internal link

Notwithstanding the fact that generally, developments in the past few years have been positive, there is still considerable disparity between Indonesia's regions. Java, the central island, is the political and economic hub of the Indonesian archipelago. In the past, there has been little investment on the other islands in infrastructure, education or basic social protection.

Jakarta harbour

Challenges for sustainable growth Internal link

The dynamic economic development of the last ten years, with annual growth rates of about five to six per cent, has made Indonesia an attractive market. The International Monetary Fund (IMF) expects that economic growth will continue at the same rate in the coming years.

Deforestation near Labanan Makarti in Borneo

Protecting valuable forest areas Internal link

Indonesia is still home to the world's third largest rain forest, following Brazil and the Congo Basin. However, illegal logging and too intensive use of the forest is slowly destroying this valuable natural resource.

German development cooperation with Indonesia

Indonesia is one of Germany's global development partners for international development cooperation. Indonesian-German development cooperation focuses on three priority areas:

  • Energy
  • Sustainable economic development / Technical and vocational education and training
  • Environmental protection

The two sides will continue to pursue the former priority area of "Good governance" as a cross-cutting issue in all areas of cooperation. Specifically, Germany is supporting measures to increase government revenue and to reduce corruption.

At the government negotiations in 2017, Germany committed funding worth some 158.5 million euros to Indonesia. Of this amount, 32 million euros has been earmarked for Technical Cooperation. 126.5 million euros will go towards Financial Cooperation.

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.

Boosting sustainable energy Internal link

In order to protect the global climate, which is a global public good, Germany has entered into a strategic partnership with Indonesia. One key area of action of this partnership is the reduction of emissions by making greater use of renewable energies.

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.

Jobs and social protection for a growing population Internal link

Economic growth is a prerequisite for poverty reduction. Germany supports Indonesia in shaping economic development in such a way that it is ecologically responsible and broadly effective.

Worker harvesting palm oil fruit

Forest conservation and sustainable supply chains Internal link

Since the bulk of Indonesia's greenhouse gas emissions originates from the destruction of tropical forests, the BMZ is helping the Indonesian government to implement forestry reforms that facilitate sustainable forest management.