Indonesia

Indonesia is made up of 17,507 islands, 6,000 of which are inhabited, covering about 730,030 sq. mi. Indonesia, with its capital at Jakarta, has the fourth-largest population in the world, estimated at 223 million people in 2005 (after China, India, and the United States). The political system is based on pancasila, in which deliberations lead to a consensus. The constitution was amended in 2002 to allow for direct elections for both the president and the vice president. Indonesia is a member of the United Nations, World Trade Organization (WTO), Islamic Development Bank, Organization of the Islamic Conference (OIC), Asian Development Bank, Asia-Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (ASEAN), Mekong Group, Colombo Plan, and Organization of Petroleum Exporting Countries (OPEC).

Indonesia's 2008 gross domestic product (GDP) can be broken down as follows: agriculture, 13.5 percent; industry, 45.6 percent; services, 40.8 percent. Indonesia was the country worst hit by the Asian financial crisis that commenced in 1997. The banking and foreign exchange crisis caused real GDP to shrink by over 13 percent in 1998. However, in 1999 the economy stabilized, and in 2000 it managed to resume growth at a solid pace. On the other hand, its recent growth performance does not match the high single-digit percentage growth it once experienced.

The currency is the rupiah, and since 1992 foreigners have been permitted to hold 100 percent of the equity of new companies in Indonesia with more than US$50 million capital. Indonesia is the world's largest Muslim country, with 185.1 million Muslims, but religious freedom is granted to all denominations. Indonesia is also the world's largest archipelago state. There are seven UNESCO sites in Indonesia, with the first four being inscribed in 1991. Independence from the Dutch is celebrated on August 17 with cultural events, and military parades on Armed Forces day, which is October 5. Women are celebrated on Kartini Day, in memory of Raden Ajeng Kartini, a symbol of female emancipation.

The Dutch began colonizing the islands in the 17th century, but the islands were occupied by Japan from 1942 until 1945; shortly after the Japanese surrendered, Indonesia declared independence. However, it was not until four years later, after negotiations and [Page 856]UN mediation, that the Netherlands gave up its stake in the islands and recognized Indonesia.

The official language is Bahasa Indonesia, a form of Malay, and there are an estimated 583 other languages and dialects spoken in the nation. Pancasila is a five-point state philosophy (belief in a supreme being, humanitarianism, national unity, democracy by consensus, and social justice). Education is under the control of the Ministry of National Education, but the Ministry of Religious Affairs is in charge of Islamic religious schools at the primary level. President Susilo Bombang Yudhoyono took office in 2004, promising an agenda close to his predecessor's, assuring actions such as curbing corruption, combating terrorism, and promoting economic growth.

Economy

The disparity in income has been widening, regardless of extraordinary world prices for petroleum. In 2005 and 2006, the annual rate of inflation exceeded 10 percent, and the unemployment rate continued to stay high. A Corruption Eradication Commission (Komisi Pemberantasan Korupsi—KPK) was established by the government to promote investment. According to critics, KPK was too apprehensive in its approach to major cases. Indonesia's stock market has been one of the best three performers in the world in 2006 and 2007. The government recently introduced tax and customs reforms, introduced Treasury bills, and increased capital market supervision in order to reduce risk. Indonesia passed a new investment law in March 2007 that addressed some of the concerns of foreign and domestic investors alike.

...