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The Dutch began to colonize Indonesia in the early 17th century; Japan occupied the islands from 1942 to 1945. Indonesia declared its independence shortly before Japan's surrender, but it required four years of sometimes brutal fighting, intermittent negotiations, and UN mediation before the Netherlands agreed to transfer sovereignty in 1949. A period of sometimes unruly parliamentary democracy ended in 1957 when President SOEKARNO declared martial law and instituted "Guided Democracy." After an abortive coup in 1965 by alleged communist sympathizers, SOEKARNO was gradually eased from power. From 1967 until 1998, President SUHARTO ruled Indonesia with his "New Order" government. After street protests toppled SUHARTO in 1998, free and fair legislative elections took place in 1999. Indonesia is now the world's third most populous democracy, the world's largest archipelagic state, and the world's largest Muslim-majority nation. Current issues include: alleviating poverty, improving education, preventing terrorism, consolidating democracy after four decades of authoritarianism, implementing economic and financial reforms, stemming corruption, reforming the criminal justice system, addressing climate change, and controlling infectious diseases, particularly those of global and regional importance. In 2005, Indonesia reached a historic peace agreement with armed separatists in Aceh, which led to democratic elections in Aceh in December 2006. Indonesia continues to face low intensity armed resistance in Papua by the separatist Free Papua Movement.

Location

Southeastern Asia, archipelago between the Indian Ocean and the Pacific Ocean

Natural Resources

petroleum, tin, natural gas, nickel, timber, bauxite, copper, fertile soils, coal, gold, silver

Population - distribution

major concentration on the island of Java, which is considered one of the most densely populated places on earth; of the outer islands (those surrounding Java and Bali), Sumatra contains some of the most significant clusters, particularly in the south near the Selat Sunda, and along the northeastern coast near Medan; the cities of Makasar (Sulawesi), Banjarmasin (Kalimantan) are also heavily populated

242968342
Bahasa Indonesia (official, modified form of Malay), English, Dutch, local dialects (of which the most widely spoken is Javanese)
JAKARTA (capital) 10.323 million; Surabaya 2.853 million; Bandung 2.544 million; Medan 2.204 million; Semarang 1.63 million; Makassar 1.489 million (2015)
Conventional long form
Republic of Indonesia
Conventional short form
Indonesia
Local long form
Republik Indonesia
Local short form
Indonesia
presidential republic
Name
Jakarta
Geographic coordinates
6 10 S, 106 49 E
Time difference
UTC+7 (12 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Indonesia, the largest economy in Southeast Asia, has seen a slowdown in growth since 2012, mostly due to the end of the commodities export boom. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth. Indonesia’s annual budget deficit is capped at 3% of GDP, and the Government of Indonesia lowered its debt-to-GDP ratio from a peak of 100% shortly after the Asian financial crisis in 1999 to less than 27 percent today. While Fitch and Moody's Investors upgraded Indonesia's credit rating to investment grade in December 2011, Standard & Poor’s has yet to raise Indonesia’s rating to this status amid several constraints to foreign direct investment in the country, such as a high level of protectionism.
Inflation
3.526%
External debt stocks
US$ 308,539,944,000
Total tax rate (% of commercial profits)
30.6%
Real Interest Rate
9.212%
Manufacturing, value added (% of GDP)
20.51%
Current Account Balance
US$ -16,346,916,094
Labor Force, Total
127,198,979
Employment in Agriculture
32.88%
Employment in Industry
22.24%
Employment in Services
44.89%
Unemployment Rate
5.60%
Imports of goods and services
US$ 170,658,407,563
Exports of goods and services
US$ 177,883,502,082
Total Merchandise Trade
30.05%
FDI, net inflows
US$ 3,761,972,281
Commercial Service Exports
US$ 23,472,663,457
rubber and similar products, palm oil, poultry, beef, forest products, shrimp, cocoa, coffee, medicinal herbs, essential oil, fish and its similar products, and spices
petroleum and natural gas, textiles, automotive, electrical appliances, apparel, footwear, mining, cement, medical instruments and appliances, handicrafts, chemical fertilizers, plywood, rubber, processed food, jewelry, and tourism
Commodities
mineral fuels, animal or vegetable fats (includes palm oil), electrical machinery, rubber, machinery and mechanical appliance parts
Partners
Japan 12%, US 10.8%, China 10%, Singapore 8.4%, India 7.8%, South Korea 5.1%, Malaysia 5.1% (2015)
Commodities
mineral fuels, boilers, machinery, and mechanical parts, electric machinery, iron and steel, foodstuffs
Partners
China 20.6%, Singapore 12.6%, Japan 9.3%, Malaysia 6%, South Korea 5.9%, Thailand 5.7%, US 5.3% (2015)
Country Risk Rating
A4
A somewhat shaky political and economic outlook and a relatively volatile business environment can affect corporate payment behavior. Corporate default probability is still acceptable on average.
Business Climate Rating
B
The business environment is mediocre. The availability and the reliability of corporate financial information vary widely. Debt collection can sometimes be difficult. The institutional framework has a few troublesome weaknesses. Intercompany transactions run appreciable risks in the unstable, largely inefficient environments rated B.
  • Diversity of natural resources (agriculture, energy, mining)
  • Highly competitive thanks to low labor costs
  • Dynamic tourism industry
  • Lively domestic market
  • Strengthened banking sector
  • Low investment rate
  • Raw materials exports are increasingly dependent on Chinese demand
  • Lack of infrastructures
  • Persistent corruption and lack of transparency
  • High levels of unemployment and poverty accentuating inter-ethnic tensions

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