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Canada-Indonesia relations

Bilateral relations

Even before the establishment of formal diplomatic relations in 1952, Canada and Indonesia enjoyed positive relations. In 1948, diplomatic efforts by Canada’s Ambassador to the UN, General Andrew McNaughton, helped to resolve deadlocked negotiations between Indonesia and the Netherlands, its former colonial power, paving the way toward international recognition of Indonesia’s sovereignty in December 1949. Since then, Canada and Indonesia have maintained a strong partnership across many areas, including trade and investment, good governance, human rights, religious freedom and pluralism; poverty reduction; counter-terrorism and security capacity building; and, the prevention of human smuggling and illegal migration.

Political and economic overview

Indonesia is a dynamic country, an influential regional power and a global player which offers Canada many opportunities for engagement. It is the world’s fourth most populous country and third largest democracy. With 86% of the population adhering to Islam, Indonesia is home to approximately 13% of the global Muslim population, making it the world’s largest Muslim-majority country. Straddling the Southeast Asia/Oceania divide, the country is as diverse as it is vast: its 17,500 islands spanning a total area of 1,812,000 km² are inhabited by some 300 ethnic groups with over 700 languages spoken.

Indonesia has enjoyed rapid economic expansion over the past decade. With a growing middle class and a population of which almost two-thirds are of working age, Indonesia has considerable growth potential and offers significant long-term commercial opportunities for Canadian companies.

Trade relations

Indonesia is SE Asia’s largest economy and a G20 member with significant potential for economic growth. In 2020, Indonesia was Canada's 24th-largest trading partner worldwide and fourth-largest among ASEAN countries, with two-way merchandise trade totalling $3.4B. Canadian merchandise exports to Indonesia were valued at $1.8B (down from $1.9B in 2019) making it Canada’s largest export market in Southeast Asia. Canada’s main exports were cereals, fertilizers, wood pulp, oilseeds, and machinery. Canada’s merchandise imports from Indonesia, valued at $1.6B (down from $1.8B in 2019), consisted primarily of rubber, electrical and electronic equipment and knitted and woven apparel. In 2019, services exports to Indonesia totaled $192M, while the value of services imported from Indonesia was $209M.

Indonesia is the second largest destination of Canadian Direct Investment Abroad (CDIA) in SE Asia, with a total stock of about $3.8B in 2019. The stock of Indonesian direct investment in Canada was officially $116M, although investment from Indonesian corporate entities originating from other jurisdictions likely exceeds $2B.

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Development

Canada and Indonesia share a long-standing partnership of over 65 years, with over $1 billion in official development assistance to Indonesia since 2000 and $33 million in 2019-20. Aligned with our Feminist International Assistance Policy (FIAP), Canada is committed to supporting the Government of Indonesia in achieving the Sustainable Development Goals (SDGs) and implementing their 2020-24 National Medium-Term Development Plan (RPJMN).  Moving forward, Canada’s development assistance is supporting:

  • Green, Sustainable and Inclusive Economic Growth/Recovery by enhancing low carbon development and climate resilient economic opportunities for vulnerable and poor Indonesians, particularly women; and
  • Enhanced advancement of the rights, services, and empowerment for Indonesian women, girls and youths by government and civil society.

Canada’s development assistance will also support Indonesia’s fight against the COVID-19 pandemic and its efforts to alleviate the economic impact on the most vulnerable and poor Indonesians, particularly women. Canada will also continue to promote innovative partnerships for financing development outcomes.

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