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COUNTRY PROFILES


PROFILE

Full Country Name: The Republic of Indonesia
Area: 1,919,443 sq km (741,098 sq miles) spread across 17,000 islands
Population: 240 million (2009 estimate)
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)

Summary

Indonesia is the world’s fourth most populous country, a continent-sized archipelago of 17,000 islands across three time zones. It is the third largest democracy in the world, with more Muslim citizens than any other state. It is the biggest economy in South East Asia and predicted to be the seventh largest in the world by 2050. An increasingly affluent middle class numbers 45 million and growing. It is also estimated to be the third largest carbon emitter in the world, mainly from deforestation.

Thirteen years after the fall of Suharto, Indonesia is one of the most stable , open democracies in Asia, with a vibrant free press and active civil society, and an economy rapidly approaching investment grade as it grows at around 6% p.a.

By 2015 Indonesia could be a middle-income country with an average per capita income of $4,000pa, a beacon of democratic stability in Asia.

But poverty remains widespread: over 100 million people live on less than $2 per day. Economic crisis could still lead to breakdown of civil governance or a return to autocratic structures. There is an underlying risk of radicalisation which would be exacerbated by economic pressures. Health and education provision is poor, as is infrastructure (energy, roads, ports etc). Indonesia continues to suffer fromcorruption, weak institutions and erratic rule of law. Maintaining competitiveness and achieving the double-digit growth many see as necessary for real take-off will be a real challenge. Meanwhile growth depends on exploitation of Indonesia’s huge natural resources, and does not easily balance with the nation’s ambitious goal to reduce carbon emissions by 26% from business as usual by 2020.

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ECONOMY

GDP: US$ 695 billion; IMF 2010
GDP per head: US$; 2,963 (IMF 2010)
Annual Growth: 6.1% (2010)
Inflation: 5.1% (2010)
Major Industries: oil, gas, mining (coal, minerals, metals), forestry, fishery, palm oil, rubber, agriculture (especially cocoa, coffee and rice) (2010, Central Statistical Office)
Major Trading Partners: Japan, Singapore, US, China (2010, Central Statistical Office)
Exchange rate: £1 = approximately 14,000 Rupiah (September 2011) US$1=9,085 (2010 average)

The Indonesian economy survived the recent global economic crisis well. GDP growth is set to average 6.4% in 2011 after growth of 6.1% in 2010. The economy was helped by its robust domestic consumption base and a limited exposure to exports.

Structural reforms have led to some progress, but poor infrastructure, a complex regulatory environment and corruption hamper investment and growth. The budget deficit for 2011 widened to 2.1% of GDP, from 2010 actual deficit of 0.7%, to accommodate the higher costs of fuel and electricity subsidies due to higher global oil prices.

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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 and re-elected in the 2009 Presidential election with 60% of the vote – the first time an Indonesian President has been re-elected in democratic elections. Constitutionally he is unable to run again in the next elections due in 2014. He presides over a vibrant economy, a thriving democracy, aconfident civil society and an outspoken press. His major challenges include significant and widespread corruption, weak institutions and lack of legal certainty.

Terrorism and Sectarian Violence

Democratic transition has allowed room for a wide variety of opinions, previously closely controlled by Suharto’s regime. Between 2000-2005 there were serious outbreaks of communal violence in Central Sulawesi, Poso and Maluku, resulting in many casualties. Sporadic clashes still occur, and there are occasional signs of religious intolerance between Muslims and Christians, but also among Muslim groups.

There is a continuing threat from terrorism across Indonesia. The Bali bombings (2002 and 2005) are well-known and caused over 200 casualties, and in 2009 bombs exploded at two hotels in Jakarta killing seven people. There have been other attacks against Western interests, against Indonesian law enforcement agencies and against the general public. A number of countries, including the UK, Australia and the US, continue to assist Indonesia with police capacity building and counter terrorism training.

Aceh

The peace process in Aceh was a major achievement of President Yudhoyono’s first administration. After 30 years of conflict, both parties fulfilled their security obligations under the peace agreement signed in August 2005. The Free Aceh Movement (GAM) handed in 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. Peaceful elections have been held successfully in 2006 and 2009, although there were allegations of intimidation in the run-up to them.

Papua

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. A new Special Autonomy law was passed after consultations with the Papuan people by Gus Dur's government on 1 January 2002.

Papua remains the poorest and most remote region of Indonesia. A heavy security presence and long-held grievances about the governance of the two provinces fuel low-level conflict, particularly in the highland areas.

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.
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.
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.
20 October – President Yudhoyono inaugurated for a second term as President.
2011:
Indonesia Chair of ASEAN

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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, and often takes the lead on political and human rights agendas. 2011 saw a successful Indonesian chairmanship with progress on a number of political and security issues. Despite occasional disputes with neighbouring countries, including over illegal immigration to Malaysia and overlapping maritime territorial claims, Indonesia’s relations with its ASEAN partners remain strong. President Yudhoyono's approach to foreign policy is based on ‘a thousand friends and no enemies’, and Indonesia sees its role as a bridge-builder (in the OIC, UN, NAM) and champion of developing countries (in the G20).

East Timor

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 subsequent withdrawal. On 15 July 2008, President Susilo Bambang Yudhoyono and East Timor's President Jose Ramos-Horta, received the report of the joint Commission on Truth and Friendship. 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

East Timor Country Profile (http://www.fco.gov.uk/content/en/country-profile/asia-oceana/fco_cp_easttimor)

Relations with the UK

The UK has strong bilateral relations with Indonesia and is keen to enhance engagement across a range of areas of cooperation. Diplomatic relations were established with Indonesia in 1949. 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 programme support the UK supports a number of projects that strengthen reform efforts in Indonesia. The British Ambassador in Jakarta is Mark Canning. 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

In April 2011, the UK’s Department for International Development (DFID) and the Government of Indonesia agreed to focus all future UK aid for Indonesia on issues related to climate change. In the same month, DFID and the FCO established the UK Climate Change Unit in Indonesia (UKCCU). The purpose of the UKCCU is to support Indonesia in meeting its national objectives and targets on carbon emission reductions, to support the shift to sustainable, low-carbon, climate resilient economy which helps to reduce poverty, and to support Indonesia achieving a progressive global deal through international climate negotiations. The UKCCU works through partnerships with government, civil society, private sector and other bilateral or multilateral partners.

DFID also provides humanitarian and reconstruction assistance in response to emergencies. The DFID website can be found here (http://www.dfid.gov.uk/)

Climate Change

Indonesia’s greenhouse gas emissions are estimated to be the third largest in the world – larger than the combined emissions of Germany, France, UK and Italy, due mainly to deforestation, fires on peatland, and, increasingly, energy emissions from fossil fuel use. As a nation of islands in an area of the world at high risk to natural disaster, Indonesia is itself exceptionally vulnerable to climate change and it is in the country’s own interests to move towards a low carbon development path. In recognition of this, in 2009 President Yudhoyono committed Indonesia to emissions reductions of 26% from a Business As Usual scenario – or 41% with international support. Action is already being taken in support of these ambitious targets, for example, in May 2010, Norway signed a Letter of Intent with the GoI to provide up to $1bn USD to help develop and implement a Reducing Emissions from Deforestation and Degradation (REDD+) strategy.

Recent Visits

Inward

-- January 2010, Marty Natalegawa, Foreign Minister, London Afghanistan Conference

-- 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

Outward

-- September 2011, Jim Paice, Minister of State, DEFRA

April 2011, HRH The Duke of York

-- March 2011, John Ashton, Foreign Secretary’s Special Representative for Climate Change

-- March 2011, Gerald Howarth, Minister for International Security Strategy, MOD

-- July 2010, Jeremy Browne, Minister of State, Foreign and Commonwealth Office

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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).

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TRADE AND INVESTMENT

Trade and Investment with the UK

Trade

Bilateral trade is substantial and has traditionally been in Indonesia’s favour. In 2010 UK goods exports to Indonesia were worth £438.9 million - an increase of 25% over the same period last year, whilst UK imports from Indonesia have seen an increase of 13% totalling £1.3 billion.

Investment

Indonesia’s Co-ordinating Board for Investment figures show the UK is the third largest investor in Indonesia. Leading British investors include Jardines, BP, Premier Oil, Shell, Unilever, HSBC, Standard Chartered Bank, Prudential, GlaxoSmithKline, Astra Zeneca and BAT.

There is a growing British retail presence (mainly franchise operations) including Marks & Spencer, Debenhams, Next, Top Shop, Ted Baker and Miss Selfridge. Karen Millen is due to open in the market soon.

UK Trade & Investment Country Profile: Indonesia (http://www.uktradeinvest.gov.uk/ukti/indonesia)

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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 2009. The new Cabinet was announced on 22 October. The next Presidential election is due to be held in 2014.

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.

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HUMAN RIGHTS

The overall human rights situation has improved significantly over the last 13 years. However there are ongoing allegations of human rights abuses in the provinces of Papua and West 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. We also continue to stress to the Indonesian government that alleged cases of human rights abuses must be robustly investigated and that those found guilty of involvement should receive sentences commensurate with the severity of the crimes.

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Last Updated: October 2011

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