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Asia and Oceania
Indonesia |
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Last reviewed: 27 October 2009 |
Country information
Full Country Name: The Republic of Indonesia
Area: 1,919,443 sq km (741,098 sq miles) spread across 17,000 islands
Population: 234.7 million (2007)
Capital: Jakarta (population: estimate 13.23 million)
People: Javanese 41%, Sundanese 15%, Balinese 2%, Madurese 3%, Minangkabau 3%, Betawi 2%, Bugis 2%, Banten 2%, Banjar 2%, other or unspecified 30% (2000 census)
Languages: Official language Bahasa Indonesia. There are about 583 languages and dialects, 13 of these have more than 1m speakers.
Religions: Muslim 86%, Protestant 6%, Roman Catholic 3%, Hindu 2%, other or unspecified 3% (2000 census)
Currency: Rupiah
Major Political Parties: Democrat Party (PD), Party of the Functional Groups (Golkar), Indonesian Democratic Party of Struggle (PDI-P), Prosperous Justice Party (PKS), , United Development Party (PPP),), National Awakening Party (PKB), National Mandate Party (PAN), Gerindra and Hanura.
Government: Republic
Head of State: President Susilo Bambang Yudhoyono
Deputy Head of State: Vice President Boediono
Foreign Minister: Dr Raden Mohammad Marty Muliana Natalegawa
Membership of International groupings/organisations: UN, WTO, G20, IMF, IBRD, Asian Development Bank, Colombo Plan, APEC, ASEAN (founding member), Mekong Group, OIC, ASEM, IMO, G77 and the Non-Aligned Movement (NAM)
ECONOMY
GDP: US$ 500 billion; (market exchange rate) 2008GDP per head: US$; 2,240 (market exchange rate 2008) US$; 3,712 (purchasing power parity) (2007 Economist estimates)
Annual Growth: 4.5% (2009: Indonesian government estimate)
Inflation: 5.0% 2009 estimate Major Industries: oil, gas, mining (coal, minerals, metals), forestry, fishery, palm oil, rubber, agriculture (especially cocoa, coffee and rice) (2007, Central Statistical Office)
Major Trading Partners: Japan, Singapore, US, South Korea, China (2007, Central Statistical Office)
Exchange rate: £1 = approximately 15,413 Rupiah (October 2009) US$1=9,678 (2008 average)
Indonesia's economy has stabilised in recent years. Economic growth has been above 5% in the past five years. Real GDP grew by 6.1% in 2008 (6.3% in 2007), the fastest rate since the Asian financial crisis of 1997-98. Structural reforms have led to some progress, but poor infrastructure, a complex regulatory environment and corruption hamper investment and growth. The budget deficit was reduced to 0.5% of GDP in 2008, however due to global economic slowdown that will lead to a lower tax revenue, but also government commitment to infuse fiscal stimulus IDR 73 trillion (USD6.4bn), the budget deficit in 2009 is expected to increase to 2.5% out of 3% ceiling budget deficit allowable under the constitution. In January 2009 the fuel price came down to the April 2008 level, after it was raised by 28% in May 2008.
Compared with other countries in the region, Indonesia is not particularly export focussed. Some 29% of GDP is derived from exports, mainly in the hydrocarbon, mining and agricultural sectors, and imports in manufactured goods. The government has revised down their inflation forecast to 5.0% for this year (down from 11.5% in 2008) due to a decrease in world oil prices. Although most of the economic indicators show positive results, unemployment (8% of working age population) and poverty rates (14%) remain a problem.
HISTORY
Recent History
After the fall of President Soeharto in May 1998 Indonesia changed dramatically. Soeharto's Vice-President, B J Habibie, took over the presidency until October 1999, when Abdurrahman Wahid (Gus Dur) was elected. After only 21 months in office Wahid was impeached for alleged involvement in financial scandals and replaced by his Vice-President, Megawati Soekarnoputri, (the daughter of Indonesia's first President, Soekarno) in July 2001. The transition was a peaceful one, which was a promising sign that Indonesia was coming to terms with its new democratic system. Susilo Bambang Yudhoyono, Megawati's former security minister, was elected President in September 2004 after defeating Megawati in a second-round election run-off. Parliamentary and Presidential elections were held in April and July 2009 respectively. President Yudhoyono was re-elected in the first round of the Presidential election with 60% of the vote – the first time an Indonesian President has been re-elected in democratic elections. He was inaugurated for his second term on 20 October 2009.There is a continuing threat from terrorism across Indonesia. On 17 July 2009 two bombs exploded at the Ritz Carlton and Marriott hotels in Jakarta killing seven people. On 1 October 2005, the second Bali bombing killed 20 people and injured many more. Other attacks against western interests in Jakarta include the Marriot Hotel bombing on 5 August 2003 and a car bomb outside the Australian Embassy on 9 September 2004.
On 12 October 2002 the first Bali bomb led to the deaths of 200 people, including 28 British nationals. A number of countries, including the UK, Australia and the US, are assisting Indonesia with police capacity building and counter terrorism training.
The Indonesian government brokered an agreement (the Malino I Accord) to end fighting between Christian and Muslim factions in Central Sulawesi, which was signed on 20 December 2001. This has brought an end to the large scale inter-communal violence. Low level violence has continued in the region and the area remains volatile. The bombing of Tentena, a largely Christian town near Poso in Central Sulawesi, on 28 May 2005 killed 21 people. However stability has improved in recent years.
In Maluku serious sectarian violence in 2000 and 2001 left thousands dead. On 12 February 2002 the Indonesian government brokered an agreement (the Malino II Accord) between Christian and Muslim factions in Maluku. On 15 September 2003 the Indonesian government lifted the state of civil emergency in the Province. However, sporadic clashes still occur.
The peace process in Aceh was a major achievement of President Yudhoyono’s first administration. Both parties fulfilled their security obligations under the peace agreement signed in August 2005. The Free Aceh Movement (GAM) handed in 840 weapons for decommissioning, and the Government of Indonesia withdrew all non-local military and police forces. The UK supported the peace process through its participation in the EU-led Aceh Monitoring Mission. Elections were successfully held on 11 December 2006 with a large turnout. Irwandi Yusuf, former GAM member, was elected as Governor of Aceh. The 2009 elections were peaceful in Aceh, although there were allegations of intimidation in the run-up to them.
Following the departure of the Dutch and a brief period of UN administration, Indonesia took over the administration of Papua (formerly Irian Jaya) in 1963. Irian Jaya became a province of Indonesia following a UN-supervised Act of Free Choice in 1969, the legitimacy of which is much debated. The Special Autonomy law was passed after consultations with the Papuan people by Gus Dur's government on 1 January 2002. On 27 January 2003, President Megawati issued a Presidential Instruction to split Papua into three provinces. There was concern that this contradicted the Special Autonomy Law, making its implementation difficult. However, on 14 November 2003 the Indonesian government announced the formation of a new province of West Irian Jaya (now referred to as West Papua) in Papua marking the official split of West Papua from the rest of Papua.
In November 2004 the Constitutional Court ruled that the creation of West Irian Jaya was not legal. However the court also stated that the province was a de facto reality and should be recognised. President Yudhoyono reiterated this position in a speech made to the DPD (Regional Government Assembly). The government subsequently issued a regulation on 16 April 2008 which clarifies the status of the province of West Papua and puts it on an equal footing with that of the province of Papua.
Chronology
1945
Declaration of Independence from the Netherlands. First provisional constitution
1949
Formal recognition of Independence from the Netherlands
1955
First national elections; no party secures a majority
1957
President Soekarno declares martial law
1959-65
Period of 'Guided Democracy'
1965
Limited coup by junior army officers against the high command crushed by General Soeharto; thousands of Indonesians died in the aftermath
1967
Soeharto becomes acting President in March (full President in March 1968)
1975
Indonesia takes over East Timor
1997
Start of Asian financial crisis
1998
21 May - Soeharto resigns to be succeeded by his Vice President Habibie
1999
7 June - Free and fair multi-party elections. Megawati Soekarnoputri's PDI-P polls 34% of the votes and Golkar (the former ruling party) 23%
30 August - East Timor Popular Consultation. 79% vote against autonomy and so implicitly for independence
20 September - multinational troops enter East Timor and Indonesia cedes control
20 October - MPR selects Abdurrahman Wahid, Chairman of the Nahdlatul Ulama (Indonesia's largest Muslim organisation) as new President
2001
23 July - following a special session of the MPR Wahid is impeached and removed as President. Megawati becomes Indonesia's fifth President
21 November - Special Autonomy Bill for the province of Papua comes into effect
20 December - The Indonesian government brokers an agreement between the warring factions in Sulawesi to end the fighting
2002
1 January - Special Autonomy Bill for the province of Aceh comes into effect 12 January - The Indonesian government brokers an agreement between the warring factions in Maluku to end the fighting
10 August - The Indonesian Parliament passes legislation that will enable Indonesians to directly elect their President and Vice-President for the first time
12 October - Terrorist bomb blast kills 202, mostly tourists, in Bali night club
9 December - Indonesian government and Free Aceh Movement (GAM) sign a Cessation of Hostilities Agreement (COHA)
2003
18 May - Talks in Tokyo between the Indonesian government and GAM break down.
19 May - President Megawati declares martial law in Aceh, and military action begins
5 August - Terrorist bomb blast kills 11 at the Marriott Hotel in Jakarta
2004
19 May - Martial law in Aceh lifted and control returned to civilian administration
9 September – Terrorist bomb blast kills nine outside Australian Embassy in Jakarta
4 October - Susilo Bambang Yudhoyono is announced as the winner of the Presidential elections
26 December - Earthquake and tsunami kills over 126, 000 people in Aceh and North Sumatra
2005
28 March - Major earthquake off the Island of Nias kills up to 1000 people.
15 August – Indonesian government and GAM sign Memorandum of Understanding in Helsinki, ending conflict in Aceh.
2006
27 May - a major earthquake caused serious damage and loss of life in the Yogyakarta and Central Java provinces. The earthquake measured 6.2 on the Richter scale, killed more than 5,700 people, and injured between 37,000 and 50,000
2008
27 January – Former President Soeharto dies.
2009
9 April – Parliamentary elections held
8 July – Presidential election which saw a clear victory for incumbent President Yudhoyono.
17 July - suicide bombers carried out attacks against the Ritz Carlton and Marriott Hotels in Jakarta. Seven people were killed and 55 injured.
30 September – major earthquake in Padang, West Sumatra killed more than 1,000 people. It measured 7.6 on the Richter scale and resulted in substantial damage to infrastructure in the region.
20 October – President Yudhoyono inaugurated for a second term as President.
INTERNATIONAL RELATIONS
Relations with Neighbours
As a founding member of ASEAN, and host to its Secretariat, Indonesia has traditionally been seen as the lynchpin of the organisation. Indonesia is keen to promote co-operation with ASEAN countries, particularly on trade and on regional issues such as piracy and smuggling. This co-operation was strengthened following the Tsunami, with ASEAN countries being among the first to provide assistance to Indonesia. Despite disputes with neighbouring countries, including over illegal immigration to Malaysia and overlapping maritime territorial claims, overall Indonesia’s relations with its ASEAN partners remain strong. President Yudhoyono's first official visit after taking office was to Malaysia and Singapore in February 2005.
Indonesia has made significant efforts to improve its relations with East Timor after the violence that followed the popular consultation in East Timor in 1999 and Indonesia's withdrawal. The relationship was boosted by President Megawati's decision to attend East Timor's Independence Day celebrations in Dili on 20 May 2002, despite significant opposition from members of parliament, and President Yudhoyono's visit in April 2005. During this visit, Yudhoyono signed a provisional border agreement with East Timor's Prime Minister Alkatiri, overcoming one of the obstacles to closer relations with East Timor. In 2005 Indonesia and East Timor established a bilateral commission of Truth and Friendship (CTF) “to conduct a shared inquiry with the aim of establishing the conclusive truth about reported human rights violations, and to make recommendations which can contribute to the healing of wounds of the past and lead to a peaceful and prosperous future for both nations”. On 15 July 2008, President Susilo Bambang Yudhoyono and East Timor's President Jose Ramos Horta, received the CTF’s report. In a joint statement they stated that they "accept the findings, conclusions, and recommendations of the Commission and recognise that gross violations of human rights occurred prior to and immediately after the popular consultation in East Timor in 1999". They also committed to the faithful implementation of the Commission's recommendations. Most analysts have indicated that this report is a positive step forward for the two countries. Whilst no recommendations were made for prosecutions of named individuals in relation to the crimes identified, nor were any amnesties offered.
Relations with the UK
The UK has strong bilateral relations with Indonesia. Former Prime Minister Tony Blair visited in March 2006, during which time he met President Yudhoyono and agreed "the establishment of a regular Indonesia-UK Partnership Forum to be chaired by the Foreign Ministers, to promote strategic dialogue on bilateral, multilateral and global issues". The first UK-Indonesia Partnership Forum was held in London on 31 January 2007. Former Foreign Secretary Margaret Beckett hosted with her Indonesian counterpart, Foreign Minister Wirajuda. Britain has a strong interest in seeing Indonesia develop into a healthy, transparent and stable democracy, in order to strengthen ASEAN and reinforce stability in South East Asia as a whole. Through our Strategic Programme Fund (SPF) the UK supports a number of projects that encourage reform in Indonesia. The SPF also funds projects that advance co-operation in areas of joint interest, such as counter-terrorism and interfaith dialogue. The UK established diplomatic relations with Indonesia in 1949. The British Ambassador in Jakarta is Martin Hatfull. The Embassy offers a full range of services: Commercial, Consular and Immigration. There is also an Honorary Consulate in Denpasar (Bali).
UK Development Assistance to Indonesia
The UK’s Department for International Development (DFID) works closely with the Government of Indonesia and other donors to provide effective development assistance to poor people in Indonesia, with the aim of helping Indonesia meet the Millennium Development Goals (MDGs). It also provides humanitarian and reconstruction assistance in response to emergencies. The DFID website can be found at: http://www.dfid.gov.uk/
Recent Visits
Inward
- September 2009, Sri Mulyani, Finance Minister, G20 Finance Ministers’ Meeting
- 30 March – 2 April 2009, President Susilo Bambang Yudhoyono, G20 London Summit accompanied by Dr Hassan Wirajuda, Foreign Minister and Sri Mulyani, Finance Minister
- 3 March 2008, Dr Hassan Wirajuda, Foreign Minister
- 15 January 2008, Sri Mulyani, Finance Minister
- 31 January 2007, UK/Indonesia Partnership Forum. Ministers for Foreign Affairs, Defence, and Trade
Outward
- 6-7 May 2009, Mike Foster, DFID Parliamentary Under Secretary of State
- 9-11 February 2009, Bill Rammell, Minister of State, Foreign and Commonwealth Office
- 1-5 November 2008, HRH The Prince of Wales visited Jakarta, Jambi and Yogyakarta
- 23-26 April 2008, Sir Jock Stirrup, Chief of Defence Staff
- 13-15 April 2008, Michael Williams, UK Special Representative for Middle East and Special Projects
- 3-6 March 2008, HRH The Duke of York
GEOGRAPHY
Indonesia is an equatorial archipelago of over 17,000 islands (6,000 inhabited) extending about 3,200 miles (5,150 kilometres) east to west and 1,250 miles (2,012 kilometres) north to south. It is divided into 33 provinces. The largest islands are Sumatra, Java, Kalimantan (Indonesian Borneo), Sulawesi (Celebes) and Papua (the Indonesian half of New Guinea). Most of the smaller islands except Madura and Bali belong to larger groups. The largest of these are Maluku (Moluccas) and Nusa Tenggara (Lesser Sundas).
TRADE IN INVESTMENT
Trade and Investment with the UK
Trade
Bilateral trade relations between the UK and Indonesia are substantial, with the balance historically in Indonesia's favour. In 2007, the UK exported £289 million of goods (£318 million in 2006). The top UK exports to Indonesia last year include transport equipment, pulp and waste paper.
Official Indonesian statistics rank the UK as Indonesia’s twelfth largest foreign trading partner in 2007. UK imports from Indonesia (predominantly textile products) in 2007 were worth almost £1 billion.
Investment
The UK is a leading investor in Indonesia. Major investors in Indonesia include BP, Unilever, the Jardine Matheson Group, Standard Chartered Bank, Premier Oil, BAT, Rio Tinto, HSBC, Prudential, Shell, Rolls Royce, GlaxoSmithKline and Wedgewood/Royal Doulton. There is also a strong and growing British retail presence, including Harvey Nichols, Marks & Spencer, Next, Debenhams, Top Shop and Ted Baker.
UK Trade & Investment Country Profile: Indonesia
POLITICS
Institutions and Government
The highest authority of the State is the People's Consultative Assembly (MPR - Majelis Permusyawaratan Rakyat) with 688 members who are elected to five-year terms. The MPR includes 560 members of the House of Representatives (DPR - Dewan Perwakilan Rakyat), the country's legislature, and 128 members of the Council of Regional Representatives (DPD). Executive power rests with the President, governing with the assistance of the Vice President and an appointed cabinet responsible to him/her. The President can serve a maximum of two presidential terms.
On 20 September 2004 Susilo Bambang Yudhoyono was elected President in the first ever direct Presidential election in Indonesia.. On 8 July 2009, President Yudhoyono became Indonesia’s first ever democratically re-elected president with 60% of the vote. He was inaugurated for his second term on 20 October. The new Cabinet was announced on 22 October.
The Supreme Court is the judicial organ of the state along with the courts of law; these are independent of the Executive in exercising their judicial powers. A Constitutional Court was established in 2003. Local government is through a three-tier system of provincial, district and village assemblies.
HUMAN RIGHTS
The overall human rights situation has improved significantly over the last 20 years. However there are ongoing allegations of human rights abuses in Papua and elsewhere in Indonesia. We raise credible reports with the Indonesian authorities.
We believe that a long-term solution to regional conflicts can only be achieved through political negotiation and consultation with the people, and that security forces should operate within the law with strict regard to human rights and if they do not, legal action should be brought against them. The UK has provided human rights training through a number of projects, including the provision of equipment to the Indonesian Human Rights Commission, support for NGOs, human rights training for Supreme Court Judges and work with regional police forces.
