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Aid Effectiveness Case Study: Indonesia

May 7, 2024
Seamus Love, Policy & Communications Intern

A conglomerate of over 18,000 islands, Indonesia has become a major economic power and an important geopolitical partner of the United States. Located on the Strait of Malacca, the corridor connecting the Indian and Pacific Oceans, Indonesia is a G20 member and the de-facto leader of the Association of Southeast Asian Nations (ASEAN). In early 2024, Indonesia announced accession plans to join the Organization for Economic Cooperation and Development (OECD).

U.S. support for Indonesian empowerment began at the early stages of its independence. With the Dutch buildup of troops to combat Indonesian separatism post-1945, the U.S. withheld Marshall Plan funds from the Dutch East Indies until sovereignty was guaranteed for Indonesia. Upon Dutch recognition of Indonesian independence in 1949, the U.S. was one of the first countries to establish diplomatic relations with Indonesia and disbursed over $100 million in aid toward the reconstruction of the Indonesian economy, setting a path for a bilateral partnership between both nations.

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