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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.
Indonesia is Southeast Asia’s largest economy and a G20 member with significant potential for economic growth. In 2022, Indonesia was Canada's 19th-largest trading partner worldwide and third-largest among Southeast Asian countries, with two-way merchandise trade totalling $6.24B. In 2022, Canadian merchandise exports to Indonesia were valued at $3.3B (up from $2.2B in 2021) making it Canada’s largest export market in Southeast Asia. Canada’s main exports were fertilizers, cereals, wood pulp, oilseeds, and machinery. Canada’s merchandise imports from Indonesia, valued at $2.9B (up from $1.9B in 2021), consisted primarily of machinery, electrical machinery and equipment, knitted apparel, rubber & related, and footwear. In 2022, services exports to Indonesia totaled $250M, while services imports from Indonesia were $167M. In 2022, Canadian Direct Investment in Indonesia was $5.7B. The stock of Indonesian direct investment in Canada was $126M.
Indonesia has achieved significant development gains over the past twenty years, including cutting the poverty rate in half (from 24% to under 10% in 2020). Despite this progress, approximately 30 million Indonesians (just over 10% of the population of 275 million) still live below the national poverty line and many more remain vulnerable to sliding into poverty due to economic, climate, and natural disaster-related shocks.
Since 2000, Canada has provided over $1 billion in official development assistance to Indonesia and remains committed to supporting its development priorities and achievement of the Sustainable Development Goals, in line with Indonesia’s National Medium Term Development Plan 2020-24. This includes a focus on promoting green, sustainable and inclusive economic growth, supporting climate change mitigation and adaptation, and advancing the empowerment and rights of women and girls.
Search the Project Browser to learn more about the many development initiatives that Canada is supporting in Indonesia.
Partnerships and organizations
To develop effective responses to today’s most pressing global challenges, Canada and Indonesia work closely in multilateral fora, such as:
- Asia-Pacific Economic Cooperation (APEC)
- Association of Southeast Asian Nations (ASEAN)
- International Civil Aviation Organization (ICAO)
- Open Government Partnership (OGP)
- United Nations (UN)
- United Nations Educational, Scientific and Cultural Organization (UNESCO)
- World Trade Organization (WTO)
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