Key Partner: Indonesia

On 20 February 2024, the OECD Council made a historic decision to open accession discussions with Indonesia. This decision follows careful deliberation by OECD Members on the basis of its evidence-based Framework for Consideration of Prospective Members, taking into consideration Indonesia’s strong cooperation with the OECD for over a decade through four successive Joint Work Programmes (JWPs) covering the broad spectrum of economic, social and environmental policy reform. This also reflects the Organisation’s longstanding strategic objective to strengthen its engagement with the countries of Southeast Asia with a view to future membership.

As the seventh largest economy, the fourth most populous country and the third largest democracy in the world, Indonesia is a key player in the global economy. Indonesia is also the only country from Southeast Asia in the G20, showing strong leadership during its 2022 Presidency, an active member of the Asia Pacific Economic Cooperation (APEC) forum, and a constructive leader in the Association of Southeast Asia Nations (ASEAN).

Designated as a Key Partner in 2007 along with Brazil, China, India, and South Africa, Indonesia was the first Key Partner to sign an Framework of Cooperation Agreement (FCA) with the OECD in 2012. The FCA was subsequently renewed in 2017 and again in 2022.

Building on three prior JWPs between the OECD and Indonesia, Indonesian Finance Minister Sri Mulyani Indrawati and OECD Secretary-General Mathias Cormann launched a new, fourth Joint Work Programme (JWP) 2022-2025 on 14 July 2022. The Programme has been supporting Indonesia in advancing the implementation of its Medium-Term National Development Plan 2020-2025, attain a resilient and sustainable recovery from the COVID-19 crisis that leaves no one behind, and move closer to OECD standards and good practices. 

In 2009, Indonesia became a member of the OECD Development Centre to engage in knowledge sharing on innovative policies to boost development Indonesia also supported the creation of the OECD Southeast Asia Regional Programme in 2014 and served as one of its first co-chairs from 2014-2017. Indonesia also signed a Privileges and Immunities Agreement in 2013 and welcomed the OECD’s first regional office in Southeast Asia, opened in Jakarta in 2015.

Indonesia’s participation in OECD activities

Indonesia is an Associate and a Participant in 11 OECD bodies and adheres to 15 OECD legal instruments. Indonesian ministers regularly attend and contribute to the OECD Ministerial Council Meetings. The country participates actively in the substantive work of the OECD’s specialised Committees and attends high-level events organised at the OECD Headquarters and in the Southeast Asian region. Moreover, it is fully integrated into the OECD’s regular work programme and covered in flagship publications and statistical databases. This engagement provides an excellent basis to further develop the co-operation in the future.

This co-operation has supported to Indonesia’s reform efforts in several priority areas, reflecting growing alignment between Indonesian laws and regulations and OECD standards. Indonesia’s participation in the Base Erosion and Profit Shifting (BEPS) project of the Committee on Fiscal Affairs, and the discussions concerning the Recommendation on Principles of Corporate Governance of the Committee on Corporate Governance, have contributed to the removal of bank secrecy for tax purposes and requirements to disclose beneficial ownership information. This in turn has reduced opportunities for corruption and money laundering.

OECD Economic Surveys and Investment Policy Reviews have supported recent sweeping business climate and labour market reforms. The Programme for International Student Assessment (PISA) has spurred reforms of the education sector, whilst the Clean Energy Finance and Investment Mobilisation Programme has been contributing to the government’s low carbon development policy. Such collaboration has also raised the visibility of OECD statistical databases and indicators, in turn fostering more reliance on evidence-based policymaking.

The partnership between Indonesia and the OECD has helped to increase the impact of OECD contributions to global and regional governance and dialogues, such as the G20, the Asia-Pacific Economic Co-operation (APEC) and the Association of Southeast Asian Nations (ASEAN).