Indonesia was the country hardest hit by the 1997 Asian financial crisis. It brought out popular discontent with the New Order’s corruption and suppression of political opposition and ultimately ended Suharto’s presidency. In 1999, East Timor seceded from Indonesia, following its 1975 invasion by Indonesia and a 25-year occupation that was marked by international condemnation of human rights abuses.
In the post-Suharto era, democratic processes have been strengthened by enhancing regional autonomy and instituting the country’s first direct presidential election in 2004. Political, economic and social instability, corruption, and terrorism remained problems in the 2000s; however, in recent years, the economy has performed strongly. Although relations among the diverse population are mostly harmonious, acute sectarian discontent and violence remain a problem in some areas. A political settlement to an armed separatist conflict in Aceh was achieved in 2005 following the 2004 Indian Ocean earthquake and tsunami that killed 130,000 Indonesians. In 2014, Joko Widodo became the first directly elected president from outside the military and political elite.
Geography:
Indonesia is the largest archipelagic country in the world, extending 5,120 kilometres (3,181 mi) from east to west and 1,760 kilometres (1,094 mi) from north to south. According to the country’s Coordinating Ministry for Maritime and Investments Affairs, Indonesia has 17,504 islands (16,056 of which are registered at the UN), scattered over both sides of the equator, around 6,000 of which are inhabited. The largest are Java, Sumatra, Borneo (shared with Brunei and Malaysia), Sulawesi, and New Guinea (shared with Papua New Guinea). Indonesia shares land borders with Malaysia on Borneo, Papua New Guinea on the island of New Guinea, and East Timor on the island of Timor, and maritime borders with Singapore, Malaysia, Vietnam, the Philippines, Palau, and Australia.
At 4,884 metres (16,024 ft), Puncak Jaya is Indonesia’s highest peak, and Lake Toba in Sumatra is the largest lake, with an area of 1,145 km2 (442 sq mi). Indonesia’s largest rivers are in Kalimantan and New Guinea and include Kapuas, Barito, Mamberamo, Sepik and Mahakam. They serve as communication and transport links between the island’s river settlements.
Economy:
Indonesia has a mixed economy in which both the private sector and government play vital roles. As the only G20 member state in Southeast Asia, the country has the largest economy in the region and is classified as a newly industrialized country. As of 2019, it is the world’s 16th largest economy by nominal GDP and 7th in terms of GDP at PPP, estimated to be US$1.100 trillion and US$3.740 trillion respectively. The services are the economy’s largest sector and account for 43.4% of GDP (2018), followed by industry (39.7%) and agriculture (12.8%). Since 2009, it has employed more people than other sectors, accounting for 47.7% of the total labour force, followed by agriculture (30.2%) and industry (21.9%).
Over time, the structure of the economy has changed considerably. Historically, it has been weighted heavily towards agriculture, reflecting both its stage of economic development and government policies in the 1950s and 1960s to promote agricultural self-sufficiency. A gradual process of industrialization and urbanization began in the late 1960s and accelerated in the 1980s as falling oil prices saw the government focus on diversifying away from oil exports and towards manufactured exports. This development continued throughout the 1980s and into the next decade despite the 1990 oil price shock, during which the GDP rose at an average rate of 7.1%. As a result, the official poverty rate fell from 60% to 15%. Reduction of trade barriers from the mid-1980s made the economy more globally integrated. The growth, however, ended with the 1997 Asian financial crisis, which affected the economy severely.