Indonesia is located in Southern Asia and consists of 17,000 islands. The biggest islands are Sumatra, Bali, Java, and Kalimantan. Indonesia is the neighbor to Malaysia and Papua New Guinea. There are many active volcanoes in Indonesia, and earthquakes are very common. Indonesia is a republic with a population of 234,694 citizens. The capital of Indonesia is Jakarta; the monetary unit is Rupiah; the national religion is Islam; the official language is Bahasa Indonesia. Indonesia is a poor country. However, the literacy rate is rather high – 89 percent. Indonesian culture is a mix of indigenous traditions and foreign influences.
Historically and geographically, Indonesia linked the Far East with the Middle East, and, as a result, it has influenced the political, cultural, and economic development of the country. Today, Indonesia has an unstable political situation but promising economic predictions.
History
The first written accounts of Indonesian history refer back to the year 78AD, when the Sanskrit language was introduced by Indian Prince Aji Caka. The first trade relations were established between Indonesia and South India: Sumatra was named the island of gold; Java was referred to as the rice island. Until the 13th century, the life of the Indonesian population was peaceful.
Muslim invasions (started in the 13th century) led to the conversion of the population to Islam; later, the land was occupied by Portuguese, Dutch, and British. In 1922, Indonesia was still a part of the Dutch kingdom, while during WWII, Japan conquered the islands. In 1946, the agreement between Netherlands and Indonesia was signed, but it resulted in the war for independence. In 1956, Netherlands transferred sovereignty to Indonesia, and the islands got the status of independent union (Taylor, 2004).
Sukarno, the father of Indonesian guided democracy, was named the President for life in 1966. His policies were supported by the population. However, there was a political struggle between the Indonesian Communist Party and the military. The debate has led to military conflicts in the result of which hundreds of thousands of Communists were killed. Suharto, the General, took the rein of the government and strengthened the role of the military in national affairs. Indonesian economy improved, and national elections were allowed (Taylor 2004). Ten years ago, in 1997, Indonesia experienced an economic setback. The national banks failed, and the currency was devalued. Citizens organized antigovernment strikes demanding Suharto’s dismissal.
Suharto, after 32 years of rule, declared the new President B.J. Habibie.
The year of 1999 was marked with the first time free parliamentary elections in the country. The majority of voices were in support of the Indonesian Democratic Party led by the daughter of Sukarno. Rioting and violence spread all over the Indonesian land, and according to the UN organized referendum, almost 80 percent of people voted to secede from Indonesia (Vickers, 2005).
For the following three years, numerous political leaders were judged for corruption on a national level.
Violence, bombing, riots, killings, ethnic clashes, political corruption, earthquakes, and war still remain the key features of modern Indonesian political and cultural life.
Politics
As the overview of history showed, Indonesia has unstable politics. Today it is referred to as a republic; however, it lacks any features of a democratic state. The political stability of any country is determined by the uniformity of governance. A stable government attracts foreign investments and ensures peace in society.
Indonesia has an unstable government and is known to the world for its political irregularity and anti-social movements (Vickers, 2005). Formally, Indonesia has the presidential form of government, with the central power being in the hands of the national government (headed by the elected President). Indonesia was under the rule of a single leader, President Suharto, for a long time. Since his downfall in 1998, the country has experienced a number of important political and social reforms. In particular, the constitution written in 1945 was revised in 1999 and 2002; the new liberal form of government was established; the presidential term was minimized to five years (Vickers 2005). The People’s Consultative Assembly, the representative national body with the function of formulating state policies, was created.
The Assembly, similar to the American form of government, is divided into two houses: the People’s Representative Council (550 members) and the Regional Representative Council (168 members).
Indonesia consists of many islands, and till this time, the disputes over the country boundaries continue. In 1997, the treaty between Indonesia and Australia was signed, settling the issue of maritime boundaries. Indonesia is rich in oil supplies, and political disputes over land often result in hostile confrontations. The current President of Indonesia, Susilo Bambang Yudhoyono, has failed to create a strong government and ensure the economic development of the country.
The recent scandals involving the President and his appointees have indicated that the political system in Indonesia is still very corrupted. As a result, economic development is at the stage of slow down, the employment rate is very high, and foreign investors are not in a hurry to invest funds into the national economy.
Demographics and Economy
Indonesia is ranked fourth in the world in terms of population, and the national growth rate is 1.3 percent. Only 43 percent of people live in urban areas, with 17 percent of the total population living below the poverty line (Ahnaf 2006). The main economic sectors are agriculture, tourism, and manufacturing. Agriculture is the key sector in terms of employment and national output. Indonesia is rich in mineral resources and oil, while manufacturing exceeded in GDP agricultural sector only once (in 1991). The services sector accounts for 40 percent of the national GDP, and approximately one-third of the population is working in the tourism industry. Despite the efforts to change the regulatory framework and encourage economic development, private investors are focused primarily on the oil and gas sectors. United States, Japan, the United Kingdom, the Netherlands, and Singapore are the major foreign investors to Indonesia. Economic growth reached the level of 5.1 percent in 2004; however, it was driven mainly by domestic consumption (Parry, 2007).
The government plays a central role in the Indonesian economy. There are more than 150 government-owned enterprises, and the state controls fuel, rice, and electricity prices. Notably, Indonesia is the only member of the Organization of Petroleum Exporting Countries from Asia. The country accounts for 2.4 percent of the world’s oil production. In 1997, when the economic and political crisis occurred, Indonesia experienced an inflation rate of 77 percent, and GDP decreased by 13 percent (Parry, 2007). The disposable income is very low in Indonesia, and historically, the exports consist of small primary commodities such as oil, plywood, and textiles. The key imports include machinery, chemicals, and foodstuffs. The fast development of the tourism sector has a positive impact on the national economy. However, political corruption minimizes the positive effects of tourism sector development. If prior to the crisis in 1997, Indonesia was developing economically much faster than most of the Asian countries, today it has the worst income disparity in the region. The recent tsunami disaster has worsened the economy even more. More than 200,000 individuals are still missing, and the estimated damage reached as much as $4.5 billion (Parry, 2007). Approximately 20 percent of total crops have been destroyed; educational and healthcare facilities have been damaged as well.
Culture
Indonesia is populated by the representatives of all global cultures, and, as a result, the national culture is a mix of local traditions and western customs. Western culture has influenced Indonesia mostly in the entertainment sector: movies and television. Despite the foreign influence, Indonesians strive to preserve the unique culture because most of the tourists come to Indonesia to learn about its indigenous traditions and customs. For example, ethnic groups in Dani, Dayak, and Mentawai follow all ethnic rituals and wear only traditional clothes. Traditional games are very popular among the local population and are often played to entertain tourists. For example, the stone jumping in Nias was originally introduced to train the warriors to jump over the walls of enemies (Vaisutis, 2007). Indonesian cuisine is very diverse and has influenced neighboring Malaysia and Singapore. Native population eats a lot of rice, vegetables, meat, and sweet potato. Pork and alcoholic drinks are forbidden. Islam is the national religion – 90 percent of all Indonesians are Muslims, 9 percent are Christians, and 1 percent are Hindu and Buddhists (Vaisutis 2007). Notably, the official ideology of Indonesia promotes the idea that the state must be based on the belief in one God.
Foreign Relations
According to the official accounts on foreign policy, Indonesia has an independent and active foreign policy. Independent because the country does not side with the world leaders, and active because it seeks active participation in international issues (Ahnaf, 2006). The primary objectives of foreign policy are to support national development (major emphasis made on economic development), preserve internal stability, and protect territorial integrity. Along with Thailand, Singapore, Malaysia, Brunei, Laos, and Burma, Indonesia is a member of the Association of Southeast Asian Nations. Association promotes the goal to enhance the economic, social, and cultural development of the member countries. Indonesia is one of the founders of the Non-Aligned Movement aimed at broadening the cooperation between the North and South. Indonesia maintains close relations with United States, Western Europe, Japan, and Australia. Indonesia supports the initiative of the Asia-Pacific Economic Cooperation to implement free trade in the region.
Indonesia has the potential to become a developed nation if political and economic reforms are introduced. Prior to the economic and political crisis in 1997, Indonesia was the most developing country in the region, with less than 10 percent of the population living below the poverty line. The turbulent history of social wars and disputes over national boundaries, authoritarian rulers, and national oppression have shaped modern Indonesia. Even though today Indonesia is in peaceful relations with global powers and neighbors, the natural disasters and political corruption slow down the foreign investments inflows into the national economy development. Having unique natural resources, beautiful landscapes, and indigenous culture, Indonesia attracts millions of tourists every year.
According to the recent forecasts, Indonesia will survive the crisis, manage to overcome the developmental drawbacks and return to the same economic development pace as it was in the middle of 1997.
References
- Ahnaf, M. I. (2006). The Image of the Other As Enemy: Radical Discourse in Indonesia (Islam in Southeast Asia: Views from Within Series). Silkworm Books.
- Parry, R. L. (2007). In the Time of Madness: Indonesia on the Edge of Chaos. Grove Press.
- Taylor, J. (2004). Indonesia: Peoples and Histories. Yale University Press.
- Vaisutis, J., Bedford, N., Elliot, M. & Ray, N. (2007). Indonesia. Lonely Planet Publications.
- Vickers, A. (2005). A History of Modern Indonesia. Cambridge University Press.