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Indonesia WRITE-UP

Indonesia WRITE-UP

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03/18/2014

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MAIN NATURAL RESOURCES AND INDUSTRY
In the 1990\u2019s, Indonesia\u2019s economy experienced a set-back as a consequence of the economy crisis that
hit most Asian countries. However, the economy is now relatively stable.

Indonesia has abundant natural resources outside Java including crude oil, natural gas, tin, copper and
gold. Indonesia also enjoys being the second largest exporter of natural gas. The country was also a
member of OPEC but later on left the said organization, this is due to the fact that the country hasn\u2019t
enough oil to sustain its needs. The agriculture products of Indonesia include rice, tea, coffee, spices and
rubber.

The major trade partners of Indonesia are Japan, the United States of America, The European Union and
neighbouring countries namely Malaysia, Singapore, and China.
Although Indonesia is rich in natural and human resources, the country is still facing crucial issues of
poverty that mainly is caused by the wide-spread corruption in the government.
On the other hand, the Indonesian economy should continue to experience domestic demand growth, with
the aid of its Investment Law of 2007.
MAIN IMPORTS AND EXPORTS

Indonesia\u2019s major imports are: machinery and equipment; chemicals, fuels and food. Main import
partners are Singapore, China, European Union, Japan and Malaysia. It\u2019s exports are: gas, plywood,
textiles and rubber. Indonesia is the world's largest tin market. Although mineral production traditionally
centered on bauxite, silver, and tin, Indonesia is expanding its copper, nickel, gold, and coal output for
export markets. Until 2007 Indonesia has been an oil exporter. Main export partners are: Japan, European
Union, United States and Singapore.

HISTORY

Indonesia's geographical location has always assured its historical prominence. The archipelago
dominates the main lines of communication both west-east (from the Atlantic and Indian Oceans to the
Pacific) and north-south (from the great Eurasian landmass to Australasia).

Between 3000 and 500 BC, two waves of immigrants from the north (proto-Malays and deutro-Malays) settled in the region alongside the resident Melanesian population (still found in the eastern islands). A series of Hindu and Buddhist empires rose and fell between the 7th and 14th centuries, after which Islam spread throughout the region. From ancient times Indonesian sailors traded and voyaged as far afield as the west coast of Africa in one direction, and to China and Japan in the other.

The coming of the Europeans

The wealth of the islands of Indonesia - the East Indies - was well known to Europeans from Greek and Roman times onwards, both by reputation and by such indirect trade as took place via the Middle East. It was, indeed, the riches of the \u2018Spice Islands\u2019 (Maluku, or the Moluccas) that drew the Portuguese and Spanish, sailing in different directions around the world, to the archipelago in the first place. The spices of the region were then, in the 16th and 17th centuries, integral both to European cuisine and to European medicine, and commanded very high prices.

The establishment of Dutch rule

From 1511 the Portuguese, followed closely by the English, set up trading posts throughout the
archipelago. However, it was the Dutch who eventually won the lion's share of influence in what was to
become the Netherlands East Indies. The Dutch East India Company established itself in Java, founding
Batavia (now Indonesia's capital city Jakarta) in 1619. In the 17th century the Dutch had still only
managed to establish trading centres, while extensive Indonesian kingdoms dominated the region. But
during the 18th-19th centuries the Dutch gradually took control of all of present-day Indonesia, including
the surviving sultanates.

Although Britain occupied the islands for a brief period during the Napoleonic Wars, in general it suited British purposes to have agreed spheres of influence in Southeast Asia, and the Netherlands posed little threat to British interests. Indonesia became a Dutch colony in 1816, and from 1824 onwards a series of agreements between Britain and the Netherlands gave the latter \u2018rights\u2019 to the entire archipelago, while Britain was assured of its \u2018rights\u2019 in the area that now constitutes Malaysia and Singapore. In 1828, with the Dutch annexation of Irian Jaya, the boundaries of the modern republic were set.

Dutch exploitation in the 19th century

The Dutch attitude to Indonesia was unabashedly that the colony existed for the enrichment of the home
country. When war and the secession of the southern provinces (now Belgium) bankrupted the Dutch
exchequer, a system of forced labour, called the Cultuurstelsel (culture system) was imposed on Java in
1830. Under it, commercial crops were grown, under compulsion, by the Javanese peasantry for delivery
to the Dutch, who shipped the goods to the Netherlands for sale. The system was extremely profitable to
the Dutch (who built up their railway network and reduced their national debt from the proceeds), but, by
causing neglect of food crops, it precipitated famine among the Javanese and in general impoverished
them.

Changed international conditions encouraged the Dutch to open their colony to international commerce
after 1870. The capital of many countries flowed in, opening up the outer islands to old and new
commercial crops and products, of which tin, rubber, and oil became of great strategic and economic
importance.
The beginnings of Indonesian nationalism

At the same time a nationalist movement was beginning to stir. Resistance to Dutch occupation had, of
course, always existed, flaring up frequently in peasant risings and occasionally in national wars (such as
that on Java from 1825 to 1830). Islam was a convenient symbol for resistance and nationalism: its spread
through the archipelago had been accelerated by the arrival of the Spaniards and the Portuguese in the
16th century (as a kind of extension of the Mediterranean conflict and partly, too, as a proto-nationalist
gesture).

Appropriately, devoutly Muslim Atjeh (now Aceh), a principality in northern Sumatra, held up against
Dutch repression well into the 20th century, the resistance overlapping in time with the formation of
Sarekat Islam. The latter was a nationalist movement that had begun as an organization of Muslim
traders, but had quickly, after 1912, extended its appeal. It became a genuinely mass movement, with
millions of followers.

During World War I, the apprehensive Dutch permitted the formation of a people's assembly (Volksraad)
as a safety valve, but they kept it firmly in their control and on a strict leash. More significantly, left-wing
ideas began to enjoy currency in nationalist circles, and the Communist Party of Indonesia (PKI) was
founded in 1920 (thus predating even the Chinese Communist Party). In 1926 and 1927 the PKI
attempted revolution, but the fragmented risings were soon crushed. The Indonesian Nationalist Party
(PNI), led by Achmed Sukarno, was founded in 1927, but was brutally suppressed by the Dutch and its
leaders exiled.

Regional tensions and World War II

The great interwar depression hit the Netherlands East Indies very badly. To protect Dutch exports to the
colony, the import of Japanese goods was restricted. To maintain the prices of important Dutch products,
such as rubber and tin, production and export were deliberately curtailed. These moves were resented by
both Japan and the USA. Japan depended upon economic access to Indonesia, and the USA - a major
importer of tin and rubber - resented Dutch \u2018commodity control\u2019 schemes. The USA also challenged
Japanese claims to regional hegemony, and in this atmosphere there was an ever-growing likelihood of a
war in the Pacific in which Indonesia would be embroiled.

The Japanese overwhelmed Dutch resistance in 1942 with humiliating ease, taking the archipelago in a mere few days, and subjecting the former colonial masters to every conceivable indignity. The PNI, with Sukarno at its head, was installed as an anti-Western puppet government.

For the Indonesians the occupation had positive and negative features. On the one hand, they were
allowed use of the national anthem, the national language, and the national flag, and given military
training by the Japanese. On the other, countless thousands were recruited for slave labour on such
infamous projects as the Thai \u2018death railway\u2019, from which few returned. For those who remained in
Indonesia, Japanese rule quickly revealed itself as even more oppressive than that of the Dutch. However,
the Japanese did make efforts to improve rice production and to stimulate a local textile industry, and
some of their officers genuinely contributed to the advancement of Indonesian nationalism.

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