Review on the International Business Environment in

Projected by Heeral Shah 40

Indonesia officially the Republic of Indonesia (Indonesian: Republik Indonesia), is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 17,508 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an elected legislature and president. The nation's capital city is Jakarta. The country shares land borders with Papua New Guinea,East Timor, and Malaysia. Other neighboring countries include Singapore, Philippines, Australia, and the Indian territory of the Andaman and Nicobar Islands. Indonesia is a founding member of ASEAN and a member of the G-20 major economies. TheIndonesian economy is the world's seventeenth largest economy by nominal GDP and fifteenth largest by purchasing power parity. The Indonesian archipelago has been an important trade region since at least the 7th century, when Srivijaya and then later Majapahit traded with China and India. Local rulers gradually absorbed foreign cultural, religious and political models from the early centuries CE, and Hindu and Buddhist kingdoms flourished. Indonesian history has been influenced by foreign powers drawn to its natural resources. Muslim traders brought Islam, and European powers brought Christianity and fought one another to monopolize trade in the Spice Islands of Maluku during the Age of Discovery. Following three and a half centuries of Dutch colonialism, Indonesia secured its independence after World War II. Indonesia's history has since been turbulent, with challenges posed by natural disasters, corruption, separatism, a democratization process, and periods of rapid economic change. Across its many islands, Indonesia consists of distinct ethnic, linguistic, and religious groups. The Javanese are the largest—and the politically dominant—ethnic group. Indonesia has developed a shared identity defined by a national language, ethnic diversity, religious pluralism within a majority Muslim population, and a history of colonialism and rebellion against it. Indonesia's national motto, "Bhinneka Tunggal Ika" ("Unity in Diversity" literally, "many, yet one"), articulates the diversity that shapes the country. Despite its large population and densely populated regions, Indonesia has vast areas of wilderness that support the world's second highest level of biodiversity. The country is richly endowed with natural resources, yet poverty remains widespread.

The name Indonesia derives from the Latin and Greek Indus, and the Greek nèsos, meaning "island". The name dates to the 18th century, far predating the formation of independent Indonesia. In 1850, George Windsor Earl, an English ethnologist, proposed the terms Indunesians — and, his preference, Malayunesians — for the inhabitants of the "Indian Archipelago or Malayan Archipelago". In the same publication, a student of Earl's, James Richardson Logan, used Indonesia as a synonym for Indian Archipelago. However, Dutch academics writing in East Indies publications were reluctant to use Indonesia. Instead, they used the terms Malay Archipelago (Maleische Archipel); the Netherlands East Indies (Nederlandsch Oost Indië), popularly Indië; the East (de Oost); and Insulinde.

From. 1900, the name Indonesia became more common in academic circles outside the Netherlands, and Indonesian nationalist groups adopted it for political expression. Adolf Bastian, of the University of Berlin, popularized the name through his book Indonesien oder die Inseln des Malayischen Archipels, 1884–1894. The first Indonesian scholar to use the name was Suwardi Suryaningrat (Ki Hajar Dewantara), when he established a press bureau in the Netherlands with the name Indonesisch Pers-bureau in 1913.


A Borobudur ship carved on Borobudur, c. 800 CE. Indonesian outrigger boats may have made trade voyages to the east coast of Africa as early as the 1st century CE. Ancient fossils and the remains of primitive tools show that the Indonesian archipelago was inhabited by Homo erectus, popularly known as the "Java Man", between 1.5 million years ago and 550,000 to 143,000 years ago. In 2003, on the island of Flores, fossils of a new small hominid dated between 74,000 and 13,000 years old and named "Flores Man" (Homo floresiensis) were discovered much to the surprise of the scientific community. This 3 foot tall hominid is thought to be a species descended from Homo Erectus and reduced in size over thousands of years by a well known process called island dwarfism. Flores Man seems to have shared the island with modern Homo sapiens until only 12,000 years ago, when they became extinct. Homo sapiens reached the region by around 45,000 years ago. In 2011 evidence was uncovered in neighbouring East Timor, showing that 42,000 years ago these early settlers had high-level maritime skills, and by implication the technology needed to make ocean crossings to reach Australia and other islands, as they were catching and consuming large numbers of big deep sea fish such as tuna. Austronesian peoples, who form the majority of the modern population, migrated to South East Asia from Taiwan. They arrived in Indonesia around 2000 BCE, and as they spread through the archipelago, confined the native Melanesian peoples to the far eastern regions. Ideal agricultural conditions, and the mastering of wet-field rice cultivation as early

led by Francisco Serrão. Following bankruptcy. the agricultural Buddhist Sailendra and Hindu Mataram dynasties thrived and declined in inland Java. towns. Although Muslim traders first traveled through South East Asia early in the Islamic era. Between the 8th and 10th centuries. For the most part. cloves. The nutmeg plant is native to Indonesia's Banda Islands Once one of the world's most valuable commodities. which were established several centuries BCE. The Hindu Majapahit kingdom was founded in eastern Java in the late 13th century. it drew the first European colonial powers to Indonesia. and it was the dominant religion in Java and Sumatra by the end of the 16th century. sought to monopolize the sources of nutmeg. and cubeb pepper in Maluku. . and the government of the Netherlands established the Dutch East Indies as a nationalized colony. the earliest evidence of Islamized populations in Indonesia dates to the 13th century in northern Sumatra. From the 7th century. Trade has since fundamentally shaped Indonesian history. Indonesia’s strategic sea-lane position fostered inter-island and international trade. In 1602 the Dutch established the Dutch East India Company (VOC) and became the dominant European power. including links with Indian kingdoms and China. the VOC was formally dissolved in 1800. particularly in Java. its influence stretched over much of Indonesia. which shaped the predominant form of Islam in Indonesia. The first regular contact between Europeans and the peoples of Indonesia began in 1512. Other Indonesian areas gradually adopted Islam. when Portuguese traders. the powerful Srivijaya naval kingdom flourished as a result of trade and the influences of Hinduism and Buddhism that were imported with it. and small kingdoms to flourish by the 1st century CE. and under Gajah Mada. Islam overlaid and mixed with existing cultural and religious the 8th century BCE. leaving grand religious monuments such as Sailendra's Borobudur and Mataram's Prambanan. allowed villages. Dutch and British traders followed.

Sukarno. and encouraged foreign direct investment in Indonesia. Indonesia's founding president Sukarno moved Indonesia from democracy towards authoritarianism. Dutch control over the archipelago was tenuous outside of coastal strongholds. who led a violent anti-communist purge. An attempted coup on 30 September 1965 was countered by the army. Despite major internal political. The head of the military. the authoritarian "New Order" was widely accused of corruption and suppression of political opposition. on the whole. General Suharto. His New Order administration was supported by the US government. only in the early 20th century did Dutch dominance extend to what was to become Indonesia's current boundaries. when in the face of international pressure. and the UN-mandated Act of Free Choice of 1969). and maintained his power base by balancing the opposing forces of the military and the Communist Party of Indonesia (PKI). and encouraged the previously suppressed Indonesian independence movement.Sukarno. However. A later UN report stated that four million people died in Indonesia as a result of famine and forced labor during the Japanese occupation. . Two days after the surrender of Japan in August 1945.For most of the colonial period. declared independence and was appointed president. which was a major factor in the subsequent three decades of substantial economic growth. Japanese occupation during World War II ended Dutch rule. and an armed and diplomatic struggle ended in December 1949.000 people are estimated to have been killed. Around 500. which was incorporated into Indonesia following the 1962 New York Agreement. The Netherlands tried to re-establish their rule. found unity in their fight for independence. and was formally appointed president in March 1968. during which the PKI was blamed for the coup and effectively destroyed. the Dutch formally recognized Indonesian independence (with the exception of the Dutch territory of West New Guinea. an influential nationalist leader. social and sectarian divisions during the National Revolution. Indonesians. out-maneuvered the politically weakened Sukarno.

commander-in-chief of the Indonesian National Armed Forces. As a unitary state. Although relations among different religious and ethnic groups are largely harmonious. Indonesian political and governmental structures have undergone major reforms. The president may serve a maximum of two consecutive five-year terms. with 132 members.Indonesia was the country hardest hit by the late 1990s Asian financial crisis. inaugurating the president. Suharto resigned on 21 May 1998. Its main functions are supporting and amending the constitution. A political settlement to an armed separatist conflict in Aceh was achieved in 2005 Government and Policies A session of the People's Representative Council in Jakarta Indonesia is a republic with a presidential system. policymaking. with 560 members. after a twenty-five-year military occupation that was marked by international condemnation of repression of the East Timorese. Political and economic instability. judicial. It has the power to impeach the president. the People's Representative Council (DPR). and foreign affairs. social unrest. Following the resignation of President Suharto in 1998. a strengthening of democratic processes has included a regional autonomy program. sectarian discontent and violence has occurred. The president of Indonesia is the head of state. and the director of domestic governance. This increased popular discontent with the New Order and led to popular protest across the country. Four amendments to the 1945 Constitution of Indonesia have revamped the executive. The highest representative body at national level is the People's Consultative Assembly (MPR). in the last five years the economy has performed strongly. who are not required to be elected members of the legislature. The 2004 presidential election was the first in which the people directly elected the president and vice president. East Timor voted to secede from Indonesia. and terrorism slowed progress. In 1999. Since Suharto's resignation. and formalizing broad outlines of state policy. corruption. The DPR passes legislation and monitors the executive branch. and the first direct presidential election in 2004. and legislative branches. The MPR comprises two houses. and the Regional Representative Council (DPD). power is concentrated in the central government. however. party-aligned . The president appoints a council of ministers.

which handles bankruptcy and insolvency. Other courts include the Commercial Court. a State Administrative Court (Pengadilan Tata Negara) to hear administrative law cases against the government. and the scope of authority of state institutions.members are elected for five-year terms by proportional representation. Indonesia maintains close relationships with its neighbors in Asia. and a Religious Court (Pengadilan Agama) to deal with codified Sharia Law cases. Indonesia has been a member of the United Nations since 1950. Foreign Relations and Military President of Indonesia Susilo Bambang Yudhoyono with Barack Obama. the President of United States. In contrast to Sukarno's anti-imperialistic antipathy to western powers and tensions with Malaysia. general elections. 9 November 2010. appeals are heard before the High Court (Pengadilan Tinggi). and was a founder of the Non-Aligned . The DPD is a new chamber for matters of regional management. dissolution of political parties. and hears final cessation appeals and conducts case reviews. and is a founding member of ASEAN and the East Asia Summit. in ceremony at the Istana Merdeka in Jakarta. Reforms since 1998 have markedly increased the DPR's role in national governance. The nation restored relations with the People's Republic of China in 1990 following a freeze in place since anti-communist purges early in the Suharto era. The Supreme Court (Mahkamah Agung) is the country's highest court. Most civil disputes appear before a State Court (Pengadilan Negeri). Indonesia's foreign relations since the Suharto "New Order" have been based on economic and political cooperation with Western nations. Obama has been quite popular in Indonesia since his experience about being a child in Jakarta was unveiled. a Constitutional Court (Mahkamah Konstitusi) to hear disputes concerning legality of law.

and Japan. in particular from the United States. The deadliest bombing killed 202 people (including 164 international tourists) in the Bali resort town of Kuta in 2002. In Papua. now the Organisation of Islamic Cooperation). Indonesia's 300. and the WTO.000 active-duty personnel. Indonesia is signatory to the ASEAN Free Trade Area agreement.Movement (NAM) and the Organisation of the Islamic Conference (OIC. Separatist movements in the provinces of Aceh and Papua have led to armed conflict. which includes marines). the Cairns Group. nevertheless. albeit imperfect. and has historically been a member of OPEC. and subsequent allegations of human rights abuses and brutality from all sides. The army has about 400. since the presidency of Susilo Bambang Yudhoyono. Australia. and a reported decline in the levels of violence and human rights abuses. there has been a significant. western Europe. severely damaged Indonesia's tourism industry and foreign investment prospects. although it withdrew in 2008 as it was no longer a net exporter of oil. The Indonesian Government has worked with other countries to apprehend and prosecute perpetrators of major bombings linked to militant Islamism and Al-Qaeda. One of the reforms following the 1998 resignation of Suharto was the removal of formal TNI representation in parliament. Navy (TNI–AL. Defense spending in the national budget was 4% of GDP in 2006. and Air Force (TNI–AU). Indonesia has received humanitarian and development aid since 1966.000-member armed forces (TNI) include the Army (TNI– AD). Administrative Divisions . and is controversially supplemented by revenue from military commercial interests and foundations. The attacks. and subsequent travel warnings issued by other countries. a ceasefire agreement was reached in 2005. implementation of regional autonomy laws. its political influence remains extensive. Following a sporadic thirty-year guerrilla war between the Free Aceh Movement (GAM) and the Indonesian military.

about 6. Geography Map of Indonesia Indonesia lies between latitudes 11°S and 6°N. and longitudes 95°E and 141°E. Papua. and East Timor on the island of Timor. Each province has its own political legislature and governor. These are scattered over both sides of the equator. and Sulawesi. Jakarta is the country's special capital region. The village administration level is the most influential on a citizen's daily life. responsible for providing most government services. The Acehnese government. Malaysia. in 2003. Indonesia consists of 33 provinces. . and the Philippines to the north. five of which have special status. The largest are Java. it instituted a form of Sharia (Islamic law). Furthermore. Indonesia shares land borders with Malaysia on Borneo.Provinces of Indonesia Administratively. The provinces of Aceh. for example. and West Papua have greater legislative privileges and a higher degree of autonomy from the central government than the other provinces. Jakarta. formerly known as Irian Jaya. and again into village groupings (either desa or kelurahan). and handles matters of a village or neighborhood through an elected lurah or kepala desa (village chief). It consists of 17. Yogyakarta. The provinces are subdivided into regencies (kabupaten) and cities (kota). which are further subdivided into districts (kecamatan). Indonesia shares maritime borders across narrow straits with Singapore. Borneo (shared with Brunei and Malaysia). New Guinea (shared with Papua New Guinea). a village is divided into several citizen-groups (Rukun-Warga (RW)) which are further divided into several neighbourhood-groups (Rukun-Tetangga (RT)). Sumatra. has the right to create certain elements of an independent legal system. was granted special autonomy status in 2001 and was separated intoPapua and West Papua in February 2003. the regencies and cities have become the key administrative units. Yogyakarta was granted the status of Special Region in recognition of its pivotal role in supporting Indonesian Republicans during the Indonesian Revolution. Papua New Guinea on the island of New Guinea. Following the implementation of regional autonomy measures in 2001.508 islands.000 of which are inhabited. Papua. and with Australia to the south.

and Australian tectonic plates makes it the site of numerous volcanoes and frequent earthquakes. Puncak Jaya in Papua is Indonesia's highest peak.024 ft). and a global catastrophe. the average daily temperature range of Jakarta is 26–30 °C (79–86 °F). 79th in the world. has a population density of 940 people per square kilometer (2. followed by Surabaya. and Lake Toba in Sumatra its largest lake.780–3. and up to 6.440 square kilometers (741.919. Average annual rainfall in the lowlands varies from 1. and the Yogyakarta earthquake in 2006.736 in northern Sumatra. Lying along the equator. Medan.175 millimeters (70–125 in).145 square kilometers (442 sq mi). Bandung. approximately 70. Its average population density is 134 people per square kilometer (347 per sq mi). volcanic ash is a major contributor to the high agricultural fertility that has historically sustained the high population densities of Java and Bali. was one of the largest eruptions ever. Kalimantan. Humidity is generally high. with two distinct monsoonal wet and dry seasons. Indonesia is the world's 16th-largest country in terms of land area. Mount Semeru and Mount Bromo in East Java. including Krakatoa and Tambora. is on Java and is the nation's largest city. both famous for their devastating eruptions in the 19th century. The eruption of the Toba supervolcano. . Indonesia has a tropical climate. Temperatures vary little throughout the year. Mountainous areas—particularly in the west coast of Sumatra. Indonesia has at least 150 active volcanoes.000 years ago. At 4. with an area of 1.050 sq mi). such rivers are communication and transport links between the island's river settlements. although Java.435 per sq mi). and Papua—receive the highest rainfall. the world's most populous island. and include the Mahakam and Barito. Sulawesi. Indonesia's seismic and volcanic activity is among the world's highest Indonesia's location on the edges of the Pacific. The country's largest rivers are in Kalimantan. averaging about 80%. West Java. At 1. Eurasian.The capital. Jakarta.884 metres (16.100 millimeters (240 in) in mountainous regions. and Semarang. Recent disasters due to seismic activity include the 2004 tsunami that killed an estimated 167. However.

531 species of bird and 39% of its 515 species of mammal being endemic. and more densely populated Java. Sulawesi. The islands of the Sunda Shelf (Sumatra. However. they are . including beaches. Indonesia's 80. and small island ecosystems. it runs roughly north-south along the edge of the Sunda Shelf. Indonesia has a range of sea and coastal ecosystems. coastal mudflats. support the world's second highest level of biodiversity (after Brazil). tidal flats. West of the line the flora and fauna are more Asian. these are predominantly of Asian species. The British naturalist. algal beds. Indonesia is one of Coral Triangle countries with the world's greatest diversity of coral reef fish with more than 1. Borneo. Nusa Tenggara. Large species such as the tiger. Papua was part of the Australian landmass. have largely been removed for human habitation and agriculture. including over 600 bird species. Alfred Wallace. Indonesia is second only to Australia in terms of total endemic species. and archipelagic geography. were once abundant as far east as Bali. tropical climate. and have a wealth of Asian fauna. estuaries. orangutan. a great ape endemic to Indonesia. In Sumatra and Kalimantan. rhinoceros. and leopard. mangroves. and Maluku—having been long separated from the continental landmasses—have developed their own unique flora and fauna. sand dunes. Java. sea grass beds. with 36% of its 1. Known as the Wllace Line. Forests cover approximately 60% of the country. between Kalimantan and Sulawesi. moving east from Lombok. elephant. between Lombokand Bali.650 species in eastern Indonesia only. and along the deep Lombok Strait.000 mi) of coastline are surrounded by tropical seas that contribute to the country's high level of biodiversity. Indonesia's size. described a dividing line between the distribution and peace of Indonesia's Asian and Australasian species. but numbers and distribution have dwindled drastically. and is home to a unique fauna and flora closely related to that of Australia.000 kilometers (50. and its flora and fauna is a mixture of Asian and Australasian species. coral reefs. the forests of the smaller. and Bali) were once linked to the Asian mainland.Biota and Environment The critically endangered Sumatran Orangutan.

Each of Indonesian provinces also have their own floral emblems. and environmental problems associated with rapid urbanization and economic development. Habitat destruction threatens the survival of indigenous and endemic species. including air pollution. and 15 identified as critically endangered. underresourced governance. together with Anggrek Bulan (Phalaenopsis amabilis) and Padma Raksasa Rafflesia (Rafflesia arnoldii). All three were chosen on World Environment Day in 1990. including 140 species of mammals identified by the World Conservation Union (IUCN) as threatened. In his 1869 book. which are often given a lower priority due to high poverty levels and weak. Agriculture had been the country's largest employer for centuries . The Malay Archipelago. Sumatran Orangutan. The region of islands between his line and New Guinea is now termed Wallacea. On the other occasion Bunga Bangkai (Titan arum) was also added as puspa langka together with Rafflesia. Deforestation and the destruction of peatlands make Indonesia the world's third largest emitter of greenhouse gases. overexploitation of marine resources. garbage management. traffic congestion. Wallace described numerous species unique to the area. including Bali Starling. and Javan Rhinoceros. Melati (Jasminum sambac) is the national flower of Indonesia. and reliable water and waste water services. Malaysia and Singapore. Indonesia's high population and rapid industrialization present serious environmental issues. Issues include large-scale deforestation (much of itillegal) and related wildfires causing heavy smog over parts of western Indonesia.increasingly Australian. Economy Using water buffalo to plough rice fields in Java.

Indonesia has a mixed economy in which both the private sector and government play significant roles. the economy was in chaos with 1. tin. and textiles. chemicals.64 billion and import expenditure of US$62.3%) and industry (12.92%). accounting 48. factories operating at minimal capacity. . In 2005. The country is the largest economy in Southeast Asia and a member of the G-20 major economies.394 (international dollars).4% of GDP (2010).73 billion with estimated nominal per capita GDP was US$3. this is followed by services (37. Jakarta. rubber. June 2011: At World Economic Forum on East Asia. the New Order administration brought a degree of discipline to economic policy that quickly brought inflation down. Agriculture. Indonesia's main export markets (2009) are Japan (17. natural gas. crumbling infrastructure. and negligibleinvestment.000% annual inflation. Indonesia's major imports include machinery and equipment. had been the country's largest employer for centuries. Indonesian president said Indonesia will be in the top ten countries with the strongest economy within the next decade.02 billion. a young and inexperienced government.29%). The Gross domestic product (GDP) is about $1 trillion[3] and the debt ratio to the GDP is 26%. shrinking export revenues. and gold. including crude oil. The major suppliers of imports to Indonesia are Singapore (24. stabilized the currency. China (12.8%). fuels.96%). this has been followed by agriculture (38. the economy deteriorated drastically as a result of political instability. Singapore (11. According to World Trade Organization data.52%). and economic nationalism. and foodstuffs. moving up three places from a year before.62%). electrical appliances.015. and Japan (8. as of 2010 was US$706. Indonesia's estimated gross domestic product (nominal).5%). and per capita GDP PPP was US$4. Following President Sukarno's downfall in the mid-1960s. The industry sector is the economy's largest and accounts for 46. Indonesia was the 27th biggest exporting country in the world in 2010. plywood. The country has extensive natural resources. the United States (10. copper. Indonesia ran a trade surplus with export revenues of US$83. however.9% of the total labor force. and China (7. which resulted in severe poverty and hunger. By the time of Sukarno's downfall in the mid-1960s.28%). the capital of Indonesia and the country's largest commercial center In the 1960s.1%) and agriculture (16. service sector has employed more people than other sectors. since 2010. However.81%). And the country's major export commodities include oil and gas.

8. Indonesia was until recently Southeast Asia's only member of OPEC. Ran by large domestic market helping to shield it from the global economic turmoil battering its more export-oriented neighbors and Foreign Direct Investment which grew 20 percent to a record $20 billion in 2011. After losing its investment grade rating in December 1997 at the onset of the Asian financial crisis which Indonesia spent more than Rp450 trillion ($50 billion) to bail out lenders from banks. the Indonesian economy grew by an average of over 7%. for example. Fitch Rating raised Indonesia's longterm and local currency debt rating to BBB. . The Rupiah stabilized in the Rs. despite a less conducive global economic climate.0% on average per year through 2013.rescheduled foreign debt.from BB+ with both ratings is stable. particularly into the rapidly developing export-oriented manufacturing sector. 2. has since ranked Indonesia below 100 in its Corruption Perceptions Index. Since 2007. Transparency International. It was the lowest inflation rate since 1998. As of 2010.000. for the first time in December 2011. political instability. Against the US dollar.3% of the population was living below poverty line. Indonesia GDP expanded 6. and the unemployment rate was 7. the national economic growth has been 6% annually and this helped the country weather the 2008–2009 global recession.1%. and the 1970s oil price raises provided an export revenue windfall that contributed to sustained high economic growth rates.79 percent. well below the government-set target of 5. Indonesia's inflation rate was only 3. and attracted foreign aid and investment.65 percent. foreign investment flowed into Indonesia. slow economic reform. and the economy shrank by 13. averaging over 7% from 1968 to 1981. affirming Indonesia as one of Asia's fastest-growing economies. Indonesia was the country hardest hit by the Asian financial crisis of 1997–98. There are around 300 distinct native ethnicities in Indonesia. with the improvement in banking sector and domestic consumption. (See Berkeley Mafia). However. and corruption slowed the recovery.[130] and a slow but significant economic recovery has ensued. the rupiah dropped from about Rs.000 range. Demographics Balinese children. Following further reforms in the late 1980s. an estimated 13.000 to 10. In 2011. however.5 percent as its fastest pace since Asian financial crisis. Fitch also predicted that economy will grow at least 6.7%.600 to a low point of 14. and from 1989 to 1997.

6 million. in a region of about 2. which possibly originated in Taiwan. A sense of Indonesian nationhood exists alongside strong regional identities. The Istiqlal Mosque in Central Jakarta. Another major grouping are Melanesians. and declared the official language under the name Bahasa Indonesia on the proclamation of independence in 1945. Society is largely harmonious. Chinese Indonesians are an influential ethnic minority comprising 3–4% of the population.7 million people. Much of the country's privately owned commerce and wealth is Chinese-Indonesian-controlled. standards of which are the official languages in Singapore. and consequently is spoken by nearly every Indonesian. Despite a fairly effective family planning program that has been in place since the 1960s. education. Most Indonesians are descended from Austronesian-speaking peoples whose languages can be traced to Proto-Austronesian (PAn). Roman . the government officially recognizes only six religions: Islam. which has contributed to considerable resentment. often as their first language. and 742 different languages and dialects. the population is expected to grow to around 265 million by 2020 and 306 million by 2050. It was promoted by Indonesian nationalists in the 1920s. and even anti-Chinese violence. The Sundanese. religious and ethnic tensions have triggered horrendous violence. Of these. It is the language of business. While religious freedom is stipulated in the Indonesian constitution. although social. 58% of the population lives on Java.The population of Indonesia according to the 2010 national census is 237. with population growth still high at 1. and are politically and culturally dominant. It is based on the prestige dialect of Malay. who inhabit eastern Indonesia. which for centuries had been the lingua franca of the archipelago. Indonesia is the world's most populous Muslimmajority nation. The largest ethnic group is the Javanese. Papua has over 270 indigenous Papuan and Austronesian languages. the world's most populous island. that of the Johor-Riau Sultanate. who comprise 42% of the population. Protestantism. ethnic Malays. Most Indonesians speak at least one of the several hundred local languages and dialects. and Madurese are the largest nonJavanese groups. politics.9%. Malaysia and Brunei. On the other hand. and academia. a form of Malay. There are around 300 distinct native ethnicities in Indonesia. is universally taught in schools. national media. The official national language. Javanese is the most widely spoken as the language of the largest ethnic group. Indonesian.

Sports in Indonesia are generally male-orientated and spectator sports are often associated with illegal gambling. Traditional . however. Islam was first adopted by Indonesians in northern Sumatra in the 13th century. which draws on local customs and beliefs. Buddhism. The council aims to hold gatherings. Nakula. Balinese Hindus. for example. Arabic. ulos and songket are created across Indonesia in styles that vary by region. and 2% Buddhist or other. Indonesian players have won the Thomas Cup (the world team championship of men's badminton) thirteen of the twenty-six times that it has been held since 1949. The most popular sports are badminton and football. Traditional Javanese and Balinese dances. with 86. 9% of the population was Christian. twice. and the Protestant denominations are largely a result of Dutch Calvinist and Lutheran missionary efforts during the country's colonial period. as do wayang kulit (shadow puppet) performances. and most Buddhists in modern-day Indonesia are ethnic Chinese. A large proportion of Indonesians—such as the Javanese abangan. 2011 the Indonesian SunniShia Council (MUHSIN) was established. Jakarta. Indonesia is the world's most populous Muslim-majority nation. Roman Catholicism was brought to Indonesia by early Portuguese colonialists and missionaries. It was an answer to violence committed in the name of religion. Most Indonesian Hindus are Balinese. and Dayak Christians—practice a less orthodox. through the influence of traders. and influenced by Indian. Hinduism. Chinese. Hinduism and Buddhism remain defining influences in Indonesian culture.Arjuna. each with cultural identities developed over centuries.1% of Indonesians being Muslim according to the 2000 census. Culture Wayang Kulit (shadow puppet) in Wayang Purwatype. and became the country's dominant religion by the 16th century. and European architectural influences have been significant. as well as numerous Olympic medals since the sport gained full Olympic status in 1992.Catholicism. and European sources. dialogues and social activities. Indonesia Museum. Indonesia has about 300 ethnic groups. Though now minority religions. Textiles such as batik. 3% Hindu. syncretic form of their religion. Arab. from left to right: Bhima. Liga Indonesia is the country's premier football club league. depicting five Pandava. Although it is not an Islamic state. and Sahadeva. The majority of Muslims in Indonesia are Sunni. contain aspects of Hindu culture and mythology. Chinese. in 1994 and 1996. ikat. The most dominant influences on Indonesian architecture have traditionally been Indian. Yudhishtira. the female equivalent of the Thomas Cup. Its women have won the Uber Cup. and Confucianism. On May 21.

sports include sepak takraw, and bull racing in Madura. In areas with a history of tribal warfare, mock fighting contests are held, such as, caci in Flores, and pasola in Sumba. Pencak Silat is an Indonesian martial art.

A selection of Indonesian food, including roasted fish, nasi timbel (rice wrapped in banana leaf), sambal, friedtempeh and tofu, and sayur asem. Indonesian cuisine varies by region and is based on Chinese, European, Middle Eastern, and Indian precedents. Rice is the main staple food and is served with side dishes of meat and vegetables. Spices (notably chili), coconut milk, fish and chicken are fundamental ingredients. Indonesian traditional music includes gamelan and keroncong. Dangdut is a popular contemporary genre of pop music that draws influence from Arabic, Indian, and Malay folk music.[citation needed] The Indonesian film industry's popularity peaked in the 1980s and dominated cinemas in Indonesia, although it declined significantly in the early 1990s. Between 2000 and 2005, the number of Indonesian films released each year has steadily increased. The oldest evidence of writing in Indonesia is a series of Sanskrit inscriptions dated to the 5th century. Important figures in modern Indonesian literature include: Dutch author Multatuli, who criticized treatment of the Indonesians under Dutch colonial rule; Sumatrans Muhammad Yamin and Hamka, who were influential preindependence nationalist writers and politicians;[176] and proletarian writer Pramoedya Ananta Toer, Indonesia's most famous novelist. Many of Indonesia's peoples have strongly rooted oral traditions, which help to define and preserve their cultural identities. Media freedom in Indonesia increased considerably after the end of President Suharto's rule, during which the now-defunct Ministry of Information monitored and controlled domestic media, and restricted foreign media. The TV market includes ten national commercial networks, and provincial networks that compete with public TVRI. Private radio stations carry their own news bulletins and foreign broadcasters supply programs. At a reported 25 million users in 2008, Internet usage was estimated at 12.5% in September 2009. More than 30 million cell phones are sold in Indonesia each year, and 27 percent of them are local brands.

The latitude and longitude of Indonesia
5° 0' 0" S / 120° 0' 0" E

Geographical Position with reference to Continent
Indonesia, with over 18,000 counted islands, is by far the largest and most varied archipelago on Earth. It spans almost 2 million square kilometres between Asia and Australia. Positioned on the Equator, across a region of immense volcanic activity, Indonesia has some 400 volcanoes within its borders, with at least 90 still active in some way. Many of the islands here are still uninhabited, with the larger islands of Java, Kalimantan (Borneo), Irian Jaya (Papua), Sumatra and Sulawesi home to most of the population base. Once dominated by the military, recent democratic reforms included two highly successful national elections to Parliament, and the direct election of the current President. Some citizens in the outer-reaches of the country still demand more freedom, and that struggle continues today within the democratic process, and not on the battlefields of the past. Note that the East Timor cry for independence was one of the positive results of reform. This tropical country and its many islands are one of the most stunning destinations on our planet, but recent (though isolated) terrorism attacks in Bali and other areas of the country have certainly stifled some of the country's tourism. In addition, the major Tsunami of December, 2004, severely damaged most of the northern reaches of Sumatra, and there's still an apprehensive feeling in the air for both residents and visitors alike.

Facts and Figures Name Indonesia (long form) Republic of Indonesia Population 214,973,900 Population & Density 234,181,400 & 122.01 Capital City Jakarta (8.9 mil) metro (18.1 mil) Currency Indonesian Rupee (IDR) Currency Converter USD (US Dollar) 1 = EUR (Euro) 0.74448 Languages Bahasa Indonesia (official), English, Dutch and many local dialects. Flag (below) National Day August 17 Religions Muslim (88%), Protestant, others Republic Day – 28th May

192 sq miles (1. Java.440 sq km) (water) 35. and Irian Jaya are quite mountainous. Of those.440 sq km) Landforms This archipelagic nation contains over 18.000 sq km) (TOTAL)741.716 km) Land Areas (land) 705.907 sq miles ( 93.Geographic Coordinates Latitude/Longitude (of the Capital City) Jakarta 6° 8' 0" S / 106° 45' 0" E Relative Location Indonesia. It's positioned just to the north of Australia in far Southeast Asia.000 islands.919. Papua New Guinea and East Timor Land Statistics Coastline 33. as well as the eastern hemisphere. Kalimantan. located on both sides of the Equator.999 miles (54.099 sq miles (1. the larger islands of Sumatra. over a dozen regional seas. .826. Sulawesi. and the countries of Malaysia. is therefore in both the northern and southern hemispheres. and bordered by the Indian Ocean. Pacific Ocean.

Indonesia has some400 volcanoes within its borders. or just below the Equator. In addition. Aceh and Yogyakarta. (0 m) Land Divisions 30 provinces. Sulawesi Utara. Sumatera Barat. Papua. Sulawesi Barat. A smiling cow. Nusa Tenggara Timur. Sumatera Selatan and Sumatera Utara. Kalimantan Tengah. Sulawesi Tengah. Maluku. with moderate cooling in the higher elevations. Average temperatures (highs and lows) throughout the year vary little based on its geographic position. Jambi. Jawa Timur. Kayan and Musi. Jawa Tengah. and the rainy season runs from mid-December through March.000 ft) are found on Irian Jaya in the east. . Sulawesi Selatan. Significant rivers include the Barito. There are also scattered inland lakes. Kepulauan Riau. Kalimantan Selatan. Nusa Tenggara Barat. Hari. The highest elevations (over 16. Banten. Kalimantan Timur. there are two special regions. Bengkulu. including: Bali. Indonesia is generally hot and humid throughout the year. Kepulauan Bangka Belitung. Riau. with at least 90 still active in some way. Maluku Utara. Sulawesi Tenggara. rural Indonesia Climate With its location on.with some peaks reaching 12. Kalimantan Barat. Digul. Irian Jaya Barat.000 ft. Located along the Ring of Fire. Kampar.502 ft. Jawa Barat. Lampung. Highest Point Puncak Jaya . (5. Gorontalo.030 m) Lowest Point Indian Ocean .0 ft. Daily (brief) rainstorms are the norm.16. and the capital city district of Jakarta Raya. Kapuas. small in size.

and in recent years eco-travel to the country has increased dramatically.S. historic Portuguese Church. Additionally within the city. including Jemaah Islamiyah (JI). with its colonial-style buildings and monuments reminiscent of its Dutch and British periods. Country Dialling Code 62 Threats to safety and security: Since 2005. points-of-interest include the Central Museum. The capital city of Jakarta remains the major attraction. other destinations include the islands of Sulawesi (Orchid Island). shopping bazaars and ethnic restaurants that cover the streets. Istiqlal Mosque. Bali. Sumatra. the U. and of course. Indonesia suffered its worst terrorist attack in 2002. Department of State and other governments continue to warn their citizens to defer non-essential travel to Indonesia. the Indonesian police and security forces have disrupted a number of terrorist cells. government-designated terrorist organization that carried out several bombings at various times from 2000 to 2009.S. Indonesia Traveller Information Attractions Indonesia and its thousands of islands offer a diverse variety of ecologies. Outside of Jakarta. a U.A happy local child. Unfortunately. and the many antique markets. with its volcanic mountains and hot springs. due to continuing concerns about the possibility of additional terrorist attacks directed against western citizens and interests. and especially to Bali. when more than 200 foreign tourists and .

violent attacks against police and civilians in the province that resulted in the deaths of and injuries to local residents and expatriate workers. pursuing daily activities.000 Rupiah from Soekarno-Hatta airport to central Jakarta. Since these attacks. restaurants. and entertainment or recreational venues that you frequent. including six U. The gunfire wounded a European development worker. Depending on traffic. nightclubs. In the same area. security forces arrested more than 100 individuals on terrorism-related charges. However. Blue Bird or White Express. or by calling or hailing a reputable taxi company. Crimes Crime can be a problem in some major metropolitan areas in Indonesia. Be sure to consider the security and safety preparedness of hotels. shopping areas. citizens. JI-affiliated elements bombed two Western hotels in Jakarta. North Sumatra. violent elements in Indonesia continue to demonstrate a willingness and ability to carry out violent attacks with little or no warning. a minimum metered fare is 150. Crimes of opportunity such as pick-pocketing and theft occur throughout the country. Indonesian security forces are engaged in combat and policing operations to suppress the Free Papua Movement (OPM). hire a taxi either at a major hotel or shopping center queue. Major hotels have staff on duty to offer safe meet-and-greet service at airports and can also direct their hotel guests to a reliable taxi. Indonesia has effectively pursued counterterrorism efforts through legislation and law enforcement. use only these taxis obtained at a designated taxi queue or clearly marked taxi stand. However. residences. and/or while traveling. such as Silver Bird. In November 2009. Monitor local news reports. Extremists may target both official and private interests. separatists in Papua continue to conduct occasional. vary your routes and times. and maintain a low profile. booking taxis by telephone directly from the company or through hotels is the best way to avoid falling victim to this scam. Deadly car bombs have exploded outside hotels and resorts frequented by Westerners in Jakarta and Bali in 2003 and 2005 and outside of the Australian Embassy in Jakarta in 2004. It is best to request meet and greet services from your hotel in advance. an area that was devastated by the 2004 tsunami and the scene of a long-running separatist conflict that ended in 2005.000 Rupiah to the metered fare for required airport taxes and toll road fees. Add about 25. citizen teachers was targeted and hit by gunfire. killing nine Indonesians and foreigners and injuring over 50. . citizen casualties. In 2010. Politely decline all offers of help from touts or anyone who approaches you. If you are in Jakarta and Surabaya. unknown assailants shot at foreigners in Banda Aceh. you should be vigilant and prudent at all times. If you are arriving at Soekarno-Hatta International Airport in Jakarta.S.Indonesian citizens were killed in Bali.S. Criminals in Jakarta regularly rob customers in taxis painted to look like taxis from reputable companies. In July 2009. but there were no U. including hotels. and restaurants.000-200. a house occupied by U. a low-intensity separatist insurgency.S. Whether at work.

The best defense is to proactively take personal responsibility for your own security: know the layout of your dwelling. . and tourist and other areas are not equipped with accommodating features. although wearing a headscarf is not compulsory. and seek guidance from local police if confronted by Sharia authorities. have someone at home at all times. In these areas. restaurant. carry a scarf to drape around their head while traveling in Aceh. and 2008 regarding accessibility for the disabled. competence. Claiming to act in the name of religious or moral standards. Credit card fraud and theft is a serious and growing problem in Indonesia. rest rooms. and business partners based on their reputation. discuss security procedures with your family and household staff. Many women. and enforcement can be arbitrary. implementation is uneven. hotels. If used. Sharia law: Sharia law is enforced in Aceh. Persons with disabilities will face severe difficulties in Indonesia as walkways. 1998. particularly in wealthier areas where expatriates tend to live.Indonesian police have noted an upward trend in burglaries and armed robberies in Jakarta. There have been many reports of shop. road crossings. ATM cards have been skimmed and cloned. exercise the same level of caution you would in the United States when using unfamiliar ATM machines and monitor your statements closely. 2007. and ability to help can be very useful when considering a stay in Indonesia. processes are opaque. and non-Muslim women are not necessarily expected to wear one. most public places and transportation facilities are not accessible. on occasion. by a separate police force. credit card numbers should be closely safeguarded at all times. Special Circumstances Accessibility: Indonesia enacted laws in 1997. except for buildings constructed under international standards. The Sharia concept of ―khalwat‖ forbids an unmarried man and unmarried woman (who are not close relatives) to be alone together in closed rooms or secluded areas. northern Sumatra. both Muslim and non-Muslim. and applicable laws are not enforced. Sharia authorities rarely confront non-Muslims about violations of Sharia law. an increase of 25 percent in 2010. Travelers who decide to use credit cards should monitor their credit card activity carefully and immediately report any unauthorized use to their financial institution. certain extremist groups have. Most of these attacks have sought to destroy property rather than to injure individuals. If you choose to use an ATM. and know your neighborhood. Visitors to all areas are encouraged to respect local tradition. it exists unofficially or through local legislation. Selecting tour guides. attacked nightspots and places of entertainment. International news events can sometimes trigger anti-American or anti-Western demonstrations. dress modestly. 2004. However. In a few other areas. resulting in bank accounts being drained. Travelers should minimize use of credit cards and instead use cash. and hotel staff writing down the credit card numbers of customers and then making purchases using the credit card number after the card owner has departed the retail location. particularly for Westerners. but this has occurred. Travelers should also avoid using credit cards for online transactions at Internet cafes and similar venues.

000 people and left over 37. erupted with massive pyroclastic flows from April to early July 2006 and again in late 2010. Earthquakes and Tsunamis: The Indian Ocean earthquake and tsunami in December 2004 killed more than 130. according to its own 2010 report. obtain up-to-date information on local conditions. be sure to establish an escape route beforehand. have overseas medical insurance. causing widespread damage and 700 deaths and many more injuries.000 missing in Aceh and North Sumatra. fire prevention is no better. be aware of the possibility of land slippage. Environmental Quality: Air quality outside of Jakarta and other major cities is acceptable most of the time. Organized and trained rescue services are rudimentary in populated areas and do not exist in remote areas. In January 2009. Mount Sinabung in the Tanah Karo Highlands of North Sumatra erupted in August 2010. and the city fire department is only manned at fifty percent of its recommended level. Obey instructions from security and emergency personnel. Seventy percent of Jakarta's fire hydrants are inoperative." Some expatriate residents of Jakarta have tested positive for highly elevated levels of carbon monoxide in their blood. Open burning of rain forests continues.9 earthquakes struck the towns of Jambi and Padang in Sumatra. you may find yourself at great risk even if you can communicate your plight. Flooding and Landslides: These frequently follow heavy rains. and potholes. Individuals susceptible to chronic respiratory illnesses should consult with their doctor before spending significant amounts of time in Jakarta. Sewage and drainage systems are incomplete.000 people. Merapi. . and carry a local mobile phone. within Indonesia's major cities. If you get into trouble. The eruption caused the evacuation of 30. emergency response personnel needed several days to evacuate tourists and bring in emergency relief supplies. a volcano near Yogyakarta. Occupants of high floors and crowded markets are at great risk. The city of Jakarta lacks an earthquake plan. since fire departments are unable to reach those places. and do not enter restricted areas. which is a common problem replicated throughout the country.Natural Disasters: Many areas of Indonesia are at high risk for natural disasters due to the country's geographic location and topography. In September 2009. Volcanoes: Mt. Only bottled water should be consumed. road washouts. and travelers should exercise caution both in and outside of cities. However. travel with a reputable local guide. Another earthquake in the Mentawai islands in October 2010 caused a tsunami which killed over 450 locals and displaced up to tens of thousands for several weeks. Water is not potable. In places where tsunamis are a potential threat. you should head inland for high ground immediately when large tremors are felt as tsunami warning systems may not be operable or reports delayed. If you are planning hikes or other outdoor activities in Indonesia.7 quake struck the north coast of Papua between the cities of Sorong and Manokwari causing deaths and heavy damage. The air and water quality in Jakarta is particularly polluted. disrupting air travel as far away as Jakarta and causing hundreds of casualties in the volcano's vicinity.6 and 7. Because of the islands' remoteness. Outside of Jakarta. Fires: Fire departments lack modern equipment and training. a magnitude 7. although to a lesser degree than in the early 2000s. On the roads. magnitude 7. A 2008 study showed that 100 percent of Jakarta's water is contaminated by fecal coliform bacteria (see below). air quality can range from "unhealthy for sensitive groups" to "unhealthy.

Anti-government protests have caused numerous deaths and injuries and led to temporary closures of the airport in Timika. Surfers and divers should also be aware that local fishermen in coastal waters may use explosives and poisons to catch fish. citizens drown in unstable water.S.Scuba Diving. and divers and swimmers should be prepared to provide first aid if encountered. carefully review employment contracts before traveling to Indonesia. Papua: All travelers to Papua and West Papua provinces. Low-intensity communal conflict exists in Papua and has caused numerous deaths and injuries. DAN has a large network of dive physicians that are available for consultation and emergency response to its members. of government forces. In 2009 and January 2010. Snorkeling. Teaching English in Indonesia: If you would like to teach English in Indonesia. snorkeling. and expatriates. and formal. Climbers should be aware that transiting private or commercial properties on the way down the mountain is considered trespassing and not a safe or legal alternative to a proper plan. please refer to the U.S. or surfing and when visiting remote tourist locations. Mountain Hiking: Hikers on Puncak Jaya or other mountains in Papua and elsewhere in Indonesia should organize their trip through a reputable tour operator and ensure that they have firm. must obtain prior approval to travel from the Indonesian government. It can be challenging to resolve trade disputes. every year. English schools may hold passports to insure that the employee complies with the terms of the contract or pays the appropriate penalty.S. Internet Purchases: U. and Surfing: Exercise prudence when scuba diving.S. several U. Travelers should strictly avoid situations involving armed tribal members. some local tour operators have abandoned climbers after they reached the summit. Rescue services are mostly ad hoc and cannot be relied upon. primary and backup plans for climbing down the mountain. be aware that the business environment is complex. Local and foreign businesses often cite corruption and ineffective courts as serious problems. although this practice is illegal in Indonesia. citizens who were unable to depart Indonesia after having terminated their employment contracts early because their employer would not release their passports. Strong seasonal undercurrents in coastal waters pose a fatal threat to surfers and swimmers. citizens frequently may be defrauded when purchasing goods by Internet from Indonesian suppliers whom the buyer has not met personally. Hikers should be aware that severe seismic events occur frequently and without notice. In the past. regulated. realistic. whether traveling as a private citizen or in an official capacity. transparent dispute settlement mechanisms are not fully developed. There have been many U. may in some cases be treated as criminal cases in Indonesia. Divers should contact the Divers Alert Network (DAN) and obtain diving medical insurance in the event decompression is required as air evacuation is usually the only way to get to the nearest decompression chamber. Hikers should assume that they will be completely on their own in case of any emergency. including deaths. Most contracts include a monetary penalty for early termination. For more information. . Department of Commerce's Commercial Guide for Indonesia. local workers. which would be generally considered administrative or civil matters in the United States. Commercial Disputes: If you are involved in commercial or property matters. Business and regulatory disputes. Dangerous marine life such as cnidaria (jellyfish) and physalia (Portugese Man-O-War) are common. sniper fire from unknown attackers on the private road from Kuala Kencana to Tembagapura caused several casualties.

injuries.S. You should contact the Embassy of Indonesia in Washington or Indonesian consulates elsewhere in the United States for specific information about customs requirements. Embassy Jakarta's website. Medical facilities and health information: The general level of sanitation and health care in Indonesia is far below U.S. and bringing them back to the United States may result in forfeiture and/or fines. Ferries are frequently overcrowded and lack basic safety equipment.Currency: The widespread use of counterfeit currency causes banks. although most expatriates leave the country for all but the simplest medical procedures. Psychological and psychiatric services are limited throughout Indonesia.S. Australia. Parents whose children hold both Indonesian and U. oversight is spotty. While all forms of transportation are ostensibly regulated in Indonesia. Because of this law.S. such as Singapore. Transportation: There has been a rapid rise in all manners of public and private transportation within Indonesia.S. and most commercial establishments to not accept U. or issued before 1996. citizenship continue to experience difficulties with entry and exit immigration procedures. amenities do not typically meet Western standards. citizens. defaced. Travelers by boat or ferry should not board before confirming that adequate personal floatation devices are provided. Some routine medical care is available in all major cities. citizens. Physicians and hospitals often expect immediate cash payment or sizable deposits before offering medical care.S. Medical procedures requiring hospitalization and/or medical evacuation to locations with acceptable medical care. standards. Dual Nationality: Indonesian law does not recognize dual nationality for adults over 18 years of age. dual nationals may also be subject to other laws that impose special obligations on Indonesian citizens. or the United States can cost thousands of dollars.S. the Indonesian Parliament passed new legislation allowing children under age 18 to hold foreign as well as Indonesian citizenship. Customs Regulations: Indonesian customs authorities strictly regulate the import and export of items such as prescription medicines and foreign language materials or videotapes/discs. equipment tends to be less well maintained than that operated in the United States.S. as have new bus and ferry lines. Transactions involving such products may be illegal. ferry. Holding dual citizenship may also hamper the U. In July 2006. Embassy's ability to provide consular protection to dual national U. exchange facilities. A non-exhaustive list of English-speaking doctors and hospitals is accessible via the U. Air. U. and there have been a number of ferry sinkings resulting in significant loss of life. and significant damage are common. currency that is worn. torn. Many places in Indonesia are inaccessible to the physically . citizens who are also documented as Indonesian nationals may experience difficulties with immigration formalities in Indonesia. and rescue/emergency response is notably lacking. New private airlines have begun operations over the past several years. and road accidents resulting in fatalities. In addition to being subject to all Indonesian laws affecting U.

handicapped. you are advised to investigate private ambulance services in your area. What sidewalks that exist are uneven and difficult to navigate. Indonesian ambulance attendants lack paramedical training equivalent to U. Traffic congestion is a significant problem in urban Indonesia and roads are generally in poor condition in rural Indonesia. standards.S. so ambulance transport. and there is no reliable emergency ambulance service in Indonesia. especially if you have known health problems. If you are staying in Indonesia for an extended period. and many buildings do not have elevators. if it exists at all. and to provide family and close contacts with the direct telephone number(s) of their preferred service. Ambulance services are individually run by hospitals and clinics. even over short distances can take hours Capital of Indonesia .

The city is the seat of the ASEAN Secretariat.000. and is the thirteenth-largest city in the world. and has an area of 661 square kilometres (255 sq mi) Established in the fourth century. cultural and political centre. and with a population of over 9. and include people from different parts of Indonesia. foods and customs. the city became an important trading port for the Kingdom of Sunda. Halim Perdanakusuma International Airport. known as Jabodetabek. Jakarta is listed as a global city in the 2008 Globalization and World Cities Study Group and Network (GaWC) research. and Tanjung Priok Harbour. Jakarta is the country's economic.000. It was the de facto capital of the Dutch East Indies (when it was known as "Batavia") and has continued as the capital of Indonesia since the country's independence was declared in 1945. Jakarta is served by the Soekarno-Hatta International Airport. East Jakarta. The language and Betawi culture are distinct . The Golden Snail (Keong Emas). The "Betawi" (Orang Betawi. or "people of Batavia") is a term used to describe the descendants of the people living in and around Batavia and recognized as an ethnic group from around the 18th–19th century. and served by several bus lines running on reserved busways Culture As the economic and political capital of Indonesia. is the second largest in the world. established in 1970s during New Order era. Jakarta attracts many domestic immigrants who bring their various languages. dialects. it is connected by several intercity and commuter railways. The urban area.Jakarta Daerah Khusus Ibu Kota Jakarta Special Capital Territory of Jakarta Jakarta (/dʒəˈkɑrtə/). The Betawi people are mostly descended from various Southeast-Asian ethnic groups brought or attracted to Batavia to meet labor needs. officially known as the Special Capital Territory of Jakarta (Indonesian: Daerah Khusus Ibu Kota Jakarta). it is the most populous city in Indonesia and in Southeast Asia. Located on the northwest coast of Java. is an IMAX theater located in Taman Mini Indonesia Indah. is the capital and largest city of Indonesia.

It is easier to find Java. and traditional Indonesian art performances at the pavilions of some provinces in Taman Mini Indonesia Indah. Pluit and Glodok (Jakarta Chinatown) areas. The Jakarta Fair is held annually from mid-June to mid-July to celebrate the anniversary of the city and is largely centered around a trade fair. They also can be found in old chinatowns of Senen and Jatinegara. Indonesia Creative Products and Jakarta Arts and Crafts exhibition. Jakarta has several performing art centers. The artist Hatem El Mekki was born in Jakarta . Javanese Wayang Orang performances can be found at Wayang Orang Bharata theater near Senen bus terminal. Jakarta Fashion & Food Festival (JFFF). Jakarta International Java Jazz Festival. Javanese. However this month-long fair also features entertainment. Traditional music is often found at high-class hotels. Balai Sarbini in Plaza Semanggi area. Chinese culture also had influenced Betawi culture. including arts and music performances by local bands and musicians. Several foreign art and culture centers are also established in Jakarta. Jakarta has lured much national and regional talent who hope to find a greater audience and more opportunities for success. Jakarta Fashion Week. held annually in August at Lapangan Banteng Park. Pasar Seni (Art Market) in Ancol. they make up 6% of the Jakartan population. and pets. firecrackers. the Jakarta dialect (Bahasa Jakarta).or Minang-based wedding ceremonies rather than Betawi weddings in Jakarta. and the Jawaharlal Nehru Indian Cultural Center. Japan Foundation. to Betawi wedding attire that demonstrates Chinese and Arab influences. France Centre Culturel Français. Nowadays. some festivals such as the Jalan Jaksa Festival or Kemang Festival include efforts to preserve Betawi arts by inviting artists to give performances. plant nurseries. Germany Goethe-Institut. including Wayang and Gamelan performances. The Chinese in Jakarta traditionally reside around old urban areas. Officially. such as the Taman Ismail Marzuki (TIM) art center in Cikini.from those of the Sundanese or Javanese. featuring flowers. It is easier to find Javanese Gamelan instead of Gambang Kromong (a mixture between Betawi and Chinese music) or Tanjidor (a mixture between Betawi and Portuguese music) or Marawis (a mixture between Betawi and Yaman music). Chinese. Portuguese. Among these foreign art and cultural centers are Netherlands Erasmus Huis. UK British Council. and Arabic. is loosely based on the Betawi language. Sundanese. such as the annual Jakarta International Film Festival (JiFFest). Flona Jakarta is a flora-and-fauna exhibition. There has been a significant Chinese community in Jakarta for many centuries. and art galleries. and most Betawi have moved to the suburbs of Jakarta. libraries. Gedung Kesenian Jakarta near Pasar Baru. although this number may be under-reported. Bentara Budaya Jakarta in Palmerah area. and mainly serve to promote culture and language through learning centers. and exhibitions. such as Jakarta Kota. used as a street language by people in Jakarta. The language is mostly based on the East Malay dialect and enriched by loan words from Dutch. As the nation's largest city and capital. displaced by new migrants. Jakarta hosts several prestigious art and culture festivals. such as the popularity of Chinese cakes and sweets. However. Betawi arts have a low profile in Jakarta.

especially Chinese. tripe. banking and trading sector. trade. and manufacturing. construction (7. automotive. Indian. including financial. and modern fusion food. nasi goreng and kue cucur. 566 trillion (around $US 56 billion). The economic growth of Jakarta in 2007 was 6. Middle Eastern. One of the most popular local dishes in Jakarta is Soto Betawi. the increase in per capita GRDP of DKI Jakarta inhabitants was 11. ownership and business services (29%). gado-gado.81%) and trade. Industry includes electronics. GRP (Gross Regional Domestic Product) was Rp.6% compared to the previous year[35] . Korean. governance and infrastructure Economy Bank Indonesia headquarters. mechanical engineering and biomedical sciences manufacturing.95% the previous year. there is also international food. trade.25%). chemicals. American. In 2007. Economy. Jakarta's economy depends highly on service sectors. Jakarta's economy depends heavily on financial service.44% up from 5. Thai.Cuisine Jakarta has a vast range of food available at hundreds of eating complexes located all over the city. The traditional Padang restaurants and low-budget Javanese Warteg (Warung Tegal) foodstalls are ubiquitous in the capital.88%). Japanese. French. from modest street-side foodstalls and traveling vendors to the high-class expensive restaurants. which is a cow milk or coconut milk broth with beef tendons. The largest contributions to GDRP were by finance. sate. Next to a myriad of selections of Indonesian food and regional specialties from all over Indonesia. and manufacturing industry sector (16%). hotel and restaurant sector (20%). hotel and restaurant sectors (6. The other popular foods include: kerak telor. with the growth in the transportation and communication (15. intestines. In 2007.

. The Wisma 46 building in Central Jakarta is currently the highest building in Jakarta and Indonesia. including Dunia Fantasi theme park. one of the many Sukarno era monuments in the city. the "Selamat Datang" (welcome) statue stands on the fountain in the center of Hotel Indonesia roundabout. Jakarta also possesses many historical places and cultural heritage. Tourism and landmarks West Irian Liberation Statue. Atlantis Water Adventure. Jakarta is primarily a city of government and business. the main avenue of Jakarta. It is seldom viewed as a centre for tourism other than the old part of the city which is a popular tourist destination. the central park of the city. Jakarta Old Town. was higher than other municipalities in DKI Jakarta. However the Jakarta authority saw the opportunity to develop the city's reputation as a service and tourism city. entertainment centers. Other landmarks include the Istiqlal Mosque. Further south through Jalan Thamrin. and the West Irian Liberation monument. stands at the center of Merdeka Square. There are many new tourism infrastructures. which was Rp 146 million rupiahs and Rp 81 million rupiahs. Near the national monument stands a Mahabharata themed Arjuna Wijaya chariot statue and fountain. and international-class hotels and restaurants being built in Jakarta. Ragunan Zoo. Tourist attractions include Taman Mini Indonesia Indah.Both GRDP by at current market price and GRDP by at 2000 constant price in 2007 for the Municipality of Central Jakarta (Jakarta Pusat). the Jakarta Cathedral. Arjuna Wijaya monument and fountain. Sea World. The National Monument. and Gelanggang Samudra. and the Ancol Dreamland complex on Jakarta Bay.

Most of the visitors attracted to Jakarta are domestic tourists from all over Indonesia. Mal Artha Gading. such as Malaysia and Singapore. Lampung. one of the largest shopping malls in Indonesia. Tanah Abang. visit Jakarta (to some extent also include Bandung) for shopping purposes. Pondok Indah Mall. It is about 4. such as Surabaya Street and Rawabening Market. and Central Java.5 hectares. As the gateway of Indonesia. Jakarta shopping malls with areas in excess of 100. Mal Taman Anggrek. At the end of June 2011. Plaza Indonesia and Plaza e'X. Traditional markets include Blok M. Senen. Atrium Senen. and Jatinegara. and traditional markets. shopping centers. Cempaka Mas. A number of colonial monuments and . Banten. Other smaller but popular malls are Sarinah Thamrin. Most foreign visitors from the neighboring ASEAN countries. Ratu Plaza. and the Jakarta Central Post Office. Pasaraya. Pacific Place Jakarta. Jakarta Cathedral. In Jakarta there is also a market that sells used goods. Mall Ambassador and Pasar Festival. since the city is famous for its cheap but fair quality products. and Mall of Indonesia. the majority of them from the neighboring provinces of West Java. Plaza Senayan. especially textiles. Senayan City. Initially it was called Waterlooplein of Batavia and functioned as the ceremonial square during the Netherlands Indies colonial period. is located in Jakarta.000 metres square.Mal Taman Anggrek. Mal Kelapa Gading. Parks The National Monument in the center of Medan Merdeka Park Taman Lapangan Banteng (Buffalo Field Park) is located in Central Jakarta near the Istiqlal Mosque. there were 68 malls and trade centers across Jakarta and the Governor planned to suspend permits for new commercial centers with footprints bigger than 5. Glodok. include Grand Indonesia. Pasar Baru. craft and fashion products. Jakarta is sprawling with numerous malls. Mangga Dua.000 square meters since 2012. Jakarta often serves as the stop-over for foreign visitors on their way to Indonesian popular tourist destinations such as Bali and Yogyakarta.

Taman Mini Indonesia Indah (Miniature Park of Indonesia). has 10 mini parks. Transport Jakarta is strained by transport problems. It has become a recreation place for people and is occasionally also used as an exhibition place or for other events. Taman Monas (Monas Park) or Taman Medan Merdeka (Medan Merdeka Park) is a huge square where the symbol of Jakarta. Also located in the Menteng area are the Taman Menteng and Situ Lembang pond parks. Jakarta has only 10. In June 2011. The park is surrounded by several Dutch colonial buildings. The park is circular shaped with a surface area of 16. Taman Suropati was known as Burgemeester Bisschopplein during the Dutch colonial time. the administration also hope there are 16 percent Private Green Open Space.94 percent Public Green Open Space. however. But the most popular is The Bird Park or Aviary Spherical cage Bird Park in Taman Mini Indonesia Indah. By 2030. Public Parks are include in Public Green Open Space. are undertaken by non- .memorials erected on the square during the colonial period were demolished during the Sukarno era. in East Jakarta. the flower and decoration plants and pet exhibition. During the 1970s and 1980s the park was used as a bus terminal.322 m2. The enormous space was created by Dutch Governor General Herman Willem Daendels (1810) and was originally named Koningsplein (Kings Square). In 1993 the park was turned into a public space again. The Taman Menteng was built on the former Persija soccer Stadium. Several features in the square are a deer park and 33 trees that represents the 33 provinces of Indonesia. On 10 January 1993. The Jakarta Flona (Flora dan Fauna). The city still suffers a lack of urban public transport services due to the prioritised development of road networks. Taman Suropati is located in Menteng city subdistrict in Central Jakarta. which contributes to the nickname of the park "Taman persahabatan seniman ASEAN" ("Park of the ASEAN artists friendship"). The most notable monument in the square is the Monumen Pembebasan Irian Barat (Monument of the Liberation of West Irian). Most trips. which is mostly designed to accommodate private vehicles. Monas or Monumen Nasional (National Monument) is located. There are several modern statues in the park made by artists of the ASEAN countries. is held in this park around August annually. President Soeharto initiated action for the beautification of the square.5 percent Ruang Terbuka Hijau (Green Open Space) and will be added to 13.

This was also spurred by geopolitical tension in Iran and Iraq and disturbances in oil production in Nigeria.To recommend policies to relevant authorities for promoting a stable financial system. Continual vulnerability in the international economy had a strong impact on the stability of the domestic financial system during the course of semester I. The supply and demand gap has been the root of the persistently high global oil. The persistently high oil price in international markets placed growing pressures on global inflation which has tended to rise. as a result of geopolitical tension and the stronger regional effect on domestic economy. upward risk pressures. which recently showed higher volatility. the persistence of global imbalances. This has driven tight-biased monetary policies in the vast majority of world economies. forecast to reach USD100per barrel. Besides. which are expected to persist for the next couple of years. The expectation of a continuous cycle of a spiralling Fed Fund Rate triggered more capital . Various Stability Avenues for Economic The Financial Stability Review (FSR) is one of the avenues through which Bank Indonesia achieves its mission ―to safeguard the stability of the Indonesian Rupiah by maintaining monetary and financial system stability for sustainable national economy development. and the rising global interest rate. Despite the rapid growth in global oil consumption decelerating.motorized transport (particularly walking) and numerous modes of public or demandresponsive transportation services. Escalation of the Middle East crisis and the persistently wide supply-demand gap in international markets will drastically amplify oil price expectations. and-To foster market discipline and public knowledge on domestic and global financial system stability issues SOURCES OF POTENTIAL INSTABILITY Financial system stability is a result of interactions amongst all components of an economy strongly influenced by domestic and international factors. Sources of the recent susceptibility included international oil price fluctuations.‖ FSR is published biannually with the objectives:-To analyze potential risks confronting domestic financial system:. triggered potential instability in the financial system. persistently high demand coupled with short supply put upward pressure on the global oil price. Volatility in the oil price is likely to be more relentless than that of the oil price crisis in the 1970»s.

the economy slowed slightly in the first quarter. experienced active rallies resulting from inflows of foreign investors. therefore. This was attributable to optimistic expectations on the returns of investment in these countries as a result of attractive interest rates and economic growth. This reduced the repayment capacity of all debtors leading to credit quality deterioration. Appealing domestic interest rates and expected returns in the Indonesian capital markets attracted more capital inflows. The second-round effects of fuel price hikes in the third quarter of 2005 had latent ramifications on household purchasing power. Moreover. the net open position of banks was far less than the mandatory threshold. Investment loans and credit cards were two segments which significantly contributed to the deterioration. Lower purchasing power coupled with rising lending interest rates contributed to weaker intermediation by financial institutions in the first quarter. the business confidence index has shown an improvement with a positive outlook since the beginning of the year. this condition made emerging countries more susceptible to regional effects. another mitigating tool to insulate banks from unexpected losses emanating from foreign exchange risk. the credit growth of banks and multi-finance companies declined. Additionally. However. it appeared that the economy grow more rapidly than financial sector intermediation. As a result. Weaker purchasing power since October 2005 impinged on demand and.inflows to the United States. particularly government bonds. as depicted by simultaneous and identical bullish rallies in these countries capital markets. Nevertheless. while bond markets also showed positive growth. the bond market. hampered production and the subsequent profitability of the corporate sector. particularly in the first quarter of 2006. banks had the capacity to mitigate price risk because they held sufficient capital and their asset structures were predominantly in the form of government securities held to maturity (SUN) and Bank Indonesia certificates (SBI). thus stabilizing the profitability of . Notwithstanding. rebounding in the second quarter of 2006. the annual salary bonus given to civil servants helped improve the repayment capacity of household economies. In addition. Compared to the previous semester. Weaker purchasing power did not contribute to economy growth and. Notwithstanding. created unfavourable impacts. As a result. Capital inflows to domestic capital markets dramatically drove short-lived bullish rallies in the equity market and more active transactions in the bond market. This spawned bullish asset prices and exchange rate appreciation. The potential risk of an equity market bubble finally came to an end following the continuation of raising Fed Fund Rate. a condition which helped tore cover the domestic bond market. Notwithstanding. a condition indicating the emergence of intermediation from the non-financial sector. Indonesian capital markets have also been the target of international capital flows. therefore. the existing positive expectations of investment returns in Indonesia helped mitigate the risk of capital outflows from the country The search for yield by hedge funds drove greater capital inflows into emerging countries. financing from the equity markets grew significantly. attributable to the steady recovery of corporate debtor profitability. Credit quality began to rebound in the second quarter.

perceived uncertainty surrounding business forced business players to postpone expansion whilst waiting for domestic interest rates to ease. Indonesia Education in Indonesia is the responsibility of the Ministry of Education and Culture (Kementerian Pendidikan dan Kebudayaan or Kemdikbud) and the Ministry of Religious . the liquidity of banks remained in good shape despite the pressures. Conversely. This indicated that the level of customer savings was maintained attributable to attractive domestic interest rates for savings and time deposits. Education in Indonesia The students in pramuka (boy scout) uniform studying The students listen the explanation and examine the model of Jawi temple during their study tour at Trowulan Museum. The relatively high CAR of banks indicated that the level of stability is relatively sufficient. East institutions. banks effectively maintained a secure level of liquidity position. Despite the lower purchasing power. This encouraged business players to retain their liquidity in time deposits as they expected an attractive pay off from the interest. nevertheless. Financial system stability is also supported by the robustness of the payment system. This development did not impose continuous pressures on capital adequacy in the financial system. The generally moderate risk exposure did not engender downward pressure on the profitability or capital of financial institutions. The profitability of banks and financial institutions remained steady and their efficiency continued to improve. The risk pressures did not threaten financial system stability. therefore. which has been equipped to encounter operational disruptions via the installation of a Disaster Recovery Centre and. potential failures in the system can be sufficiently mitigated.

For movies. Entertainment in Indonesia is a consolidation of traditional. rappers. They tend to be produced just to get quick dollars (or I should say Rupiah). In Indonesia. behaviour and creativity to him/herself. and dangdut. secondary and tertiary education. In music. They use regular musical instruments. Traditional entertainment includes wayang (puppet show). I supose.) There is also non-traditional music styles. Iwan Fals. Rhoma Irama. jazz groups. with sexy titles. modern (local). other citizens and for the nation. Chandra Darusman. Chinese Kung Fu or martial arts and India films are among the popular ones. modern (local). there are pop bands and singers. Formal education is divided again into three levels. formal and non-formal. country singers. not North American's Indian) music. primary. and some are excellent. . Islamic schools are the responsibility of the Ministry of Religious Affairs. especially in relation to the use of English as medium of instruction or having an international curriculum instead of the national curriculum. I am sorry to say that current Indonesian movies are poor in quality (have low quality). Famous Indonesian song writers are Titik Puspa. Education is defined as a planned effort to establish a study environment and education process so that the student may actively develop his/her own potential to gain the religious and spiritual level. six years at elementary level and three in junior high school. is similar to entertainment in other countries but with local content. and so on. Non-local entertainment includes music and movies from outside Indonesia. intelligence. all citizens must undertake nine years of compulsory education. Dangdut is closer to Indian's (as in Asia's India. Some are okey. The constitution also notes that education in Indonesia is divided into two major parts. Schools in indonesia are run either by the government (negeri) or privately (swasta). and non-local. consciousness. commedians.Affairs (Kementerian Agama or Kemenag). Imported movies are either subtitled in Bahasa Indonesia or dubbed with Bahasa Indonesia. for example. Guruh Sukarnoputra. Entertainment in Indonesia Entertainment in Indonesia is a combination of traditional. Indonesia houses everything on earth to keep its visitors enthralled and happy. personality. The people coming here are never bored because of the myriad forms of entertainment here. Most of them have too much sexual content. and traditional dances. Local entertainment. In my subjective opinion. the Indonesian movies were much better few years ago. you name it. (Check out the "Indonesian Music page". rock bands. not considering (or little consideration) the artistic or content aspect. and nonlocal. but has a rich Indonesian flavor: kroncong. Some private schools refer to themselves as "national plus schools" meaning that they go beyond the minimum government requirements.

They also held in temples. While there was little threat of privatizing the often inefficient government monopolies. about 35 percent of the employed work force in 1989. By 1990 there were . Infrastructure Introduction The services sector in Indonesia in the early 1990s was a heterogenous mix of modern government-operated utilities such as gas and electricity. The Wayang (Puppet Show) besides being a form of entertainment is also the bearer of Indonesian culture. which averaged about 3 percent per year. One of the fastest growing sources of employment in services was the government civil service. Ubud and other tourist destinations you will easily find advertisements and flyers informing you all about the art and cultural performances and also about modern entertainment. sophisticated and well-paid private services such as finance and insurance. which grew at a rate of almost 6 percent per year in these two decades. In Kuta. a private airline--Sempati Air Services--was permitted for the first time to provide international jet service in competition with the government-owned airline. and form of religious experience rolled into one. comedians. Garuda Indonesia. incorporated in some of the munificent Balinese ceremonies. The culture of Indonesia is reflected in the plays that act as a carrier of myth. An extensive reform of shipping regulations increased competition and access to Indonesia's ports. Indian films are widely batched and popular here. For example. These music forms are entertaining and rejuvenating at the same time. for example. Repelita V (FY 1989-93) increased transportation investment to almost 20 percent of development expenditures from around 12 percent in Repelita IV. Besides. faster than total labor force growth. These Indonesian puppet shows are regarded as one of the earliest forms of animation. Don’t miss the opportunity to watch extravagant and exotic traditional dances and dramas accompanied by the high-valued gamelan instruments in Indonesia. there is the Chinese Kung Fu or martial art which is another form of entertainment. and the massive state-owned National Electric Company (PLN) began negotiations to purchase electricity from privately owned generators. The dances and dramas and other cultural attractions are organized at many venues. Services provided 26 million jobs. The effort to boost non-oil exports also demanded more efficient transportation both among islands and to international ports. the deregulation trend in the late 1980s encouraged more private participation in many services formerly reserved exclusively for the public sector.Entertainment in Indonesia is not only diversified but also colorful. rock bands. In an archipelagic setting. rappers and many others. morality play. there are pop bands and singers. and traditional dances. The hotels. clubs and other nightspots houses modern entertainment. transportation infrastructure is crucial to a modern integrated economy. mainly in the open-air. The non-traditional music styles like kroncong. and millions of self-employed traders earning a marginal living in what is often called the informal sector. Nusa Dua. In music. jazz groups. Growth in service employment was over 4 percent per year during the 1970s and 1980s. 21 Cineplex is one of the popular theatre halls here. Sanur. country singers. bars. The traditional entertainment here includes Wayang (puppet show). and dangdut has a rich Indonesian flavor: You can also entertain yourself by visiting the theater halls here.

These ubiquitous small-scale traders." the becak. By this definition. possibly offered the best program to assist this sector. This number included about half of all women employed in nonagricultural occupations. from large incorporated firms to unincorporated establishments operating without fixed premises. The once common becak (pedicab) was restricted to small side streets in many urban areas to reduce traffic congestion. already enabled many rural households to supplement their income with informal employment in more prosperous urban areas. unrestricted economic growth. The extensive investment in transportation infrastructure during the 1970s and 1980s. In Jakarta. On the other hand. Employment in trade or commerce was the largest source of employment in the service sector. . like many informal activities. which should have increased incomes of factory workers who had a high demand for inexpensive informal services. In spite of its symbolic "backwardness. Most informal activities provided household consumption services. Throughout the 1970s and 1980s. the sector was recognized as an important source of employment that should be supported as part of the overall effort to promote pribumi economic development. like the popular kaki lima (five-leg) food stalls found throughout Javanese cities. which facilitated urban-rural migration and eased rural travel. For example. Petty traders made up the majority of the informal sector (small establishments outside the agricultural sector that employed only unpaid family labor). could be found plying their wares in the colorful village pasar (market) and in urban streets. The benefits of increasing manufacturing employment in the 1990s. often on a municipal level. In 1990 over 16 percent of civil servants had some university education. many policies. offered a vital service to urban dwellers at a low cost. compared with about 1 percent for the labor force as a whole. so named for the three-legged food stall together with the two legs of the attendant. although success was often tenuous because of the large and diverse target population. repeated efforts were made to centralize petty traders and food stalls into government-provided facilities in less-desirable locations with high rents. usually selfemployed or employing only family labor. thwarted informal sector activities. The informal sector also accounted for an important share of industrial employment. the becak was to be phased out entirely by denying new licenses after 1985. a variety of credit and training programs were geared to informal services and industry. about 17 million workers (around 23 percent of the labor force) in 1989 were employed in the informal sector in activities that usually required little skill or capital.8 million civil servants employed in all levels of government and in public institutions such as schools and hospitals. However. On one hand. A wide range of enterprises were involved in commerce. the unincorporated establishments were much more numerous and probably accounted for about 90 percent of employment in trade. Government civil servants were typically more educated than average. Specific programs designed to assist the informal sector may have been less important than general.3. The government had an ambivalent attitude toward the informal sector. accounting for almost 11 million workers in 1989.

Roads and Highways The total length of roads in 2004 reached about 340. Since 1987. Jasa Marga which now has overall responsibility for some 515 km of toll roads. and 3 percent buses. . Around 460 km of which are on the island of Java. 37.164 km under provincial responsibility.000 km.628 km were under the state responsibility. 8 percent trucks. with 23 percent of the land area and only 2 percent of population. The number of motor vehicles registered by the State Police was 19 million in 1999 (excluded Timor Timur) and 27 million in 2003.1 million motor vehicles assembled domestically about 90 percent were motorcycles.564 km under district responsibility. Of the total 3. Densely populated Java. 13 percent passenger cars. account for 7 percent of the network. 266. Indonesia’s first toll road was opened in 1978 and placed under the management of the state-owned toll road company. 649 km toll roads. out of which. 58 percent is paved. At the other end of the spectrum. all proposed toll road projects have been required to be offered to private investors. The motor vehicles in 2003 consisted of 71 percent motorcycles. The district rural and urban roads are only 50 percent in reasonable condition. and the rest. 34. with 7 percent of Indonesia’s land area and 62 percent of its population. Of the total road length. accounts for 27 percent of the classified road network. and so far some 30 percent of the network in operation has been developed by private consortia. The national road network is in good condition with 95 percent paved and 81 percent in good and fair condition. Maluku and Papua. The provincial road network is also predominantly in good or fair condition.

compared with 6. and installation of navigational aids. Indonesia's sudden air transport development became possible by the collapse of the Suharto regime in 1998.Air Transport Air transport is rapidly increasing.6 million in 1999. . and for some areas. Over half of these rivers are in Kalimantan and the rest in Sumatra. These were originally used mainly for long-haul transport. dredging of river channels at several river ports. Most of the vessels and terminals on the inland waterways system are owned and operated by the private sector. In 2004. which is 7 million more than in 1997. Air transport is growing rapidly. Inland Waterways There are more than 10. because of the high seasonal variation in the water level of many rivers. In 2003. the only option. driven by the insufficient water and land transport networks. 16 million trips were taken. there were 23 scheduled airlines operating and 37 licenses had been issued. Indonesia has adopted the standards of the International Civil Aviation Organization with only minor variations. Some infrastructure improvements have been carried out. like the construction of new wharves. Before 1999. but the compliance with the standards is far from uniform. the Directorate General of Air Communication estimated in 20 million the seats sold in 2004.000 km of navigable waterways among 50 river systems. with air travelers doubling every three years primarily driven by the low fares. there were five scheduled carriers and a few charter operators. However. not only. Conservatively. but also because travel by air is the quickest way to get around the country's thousands of islands.

Of these. shipping services are offered on more complex routes. Jakarta. and fertilizer which use specialized ports. the four largest ports. for remote islands like Sulawesi and others. . and shipping services. handle most of Indonesia’s export and import cargoes. Belawan. The most important ports are Jakarta (Tanjung Priok). Whereas. rubber. commonly use lift-on lift-off vessels. and Ujung Pandang. Ambon in Maluku. The cargo volume carried by inter-island shipping services reaches over 300 million tons. Especially. It is estimated that inter-island shipping accounts for 60 percent of the total sea borne cargo movement in the country. the role of inland waterways is relatively minor. and Samarinda in Kalimantan. and Panjangon in Sumatra. There are two distinct types of inter-island shipping services: ferry. Banjarmasin. timber. In remote islands a higher percentage of the total number of passengers is traveling by inter-island transport means. Balikpapan. Ujung Pandang and Bitung in Sulawesi.without further investment for improvement of crucial sections. Ports and Shipping Indonesia has some 300 public ports scattered over the archipelago. Semarang and Cirebon in Java. logs. and trucks. About 14 million passengers a year are traveling by inter-island shipping. serving inter-island. Much of the domestic traffic originates or is destined to these four ports. and special ports. Inter-island shipping is the prevailing means for distributing goods through the ports in Indonesia. the rest are feeder. typically between adjacent islands. Pandang. lokal (small motorized vessels up to 250 dwt operating in short inter-island or coastal routes) and sailing vessels (small wooden hulled vessels which mainly depend on a combination of wind power and motor propulsion). and Sorong in Irian Jaya. Surabaya. Belawan. cars. far exceeding international trade volume. and are mostly dedicated cargo services. Ferries are generally point-to-point services offered over a relatively short distance. the percentages of cargoes carried by inter-island shipping are even higher. Surabaya. 43 are international liner service ports. and use ro-ro vessels that carry a mix of passengers. and limited to certain areas of Sumatra and Kalimantan. palm oil. except for special commodities such as crude oil.

and three in Sumatra.Railways Indonesia has four unconnected railway systems. major urban transport investments were undertaken. and the North Sumatra main traffic is crude palm oil. Urban Transport Before the 1997 crisis. and Jakarta-Cirebon (200 km). These included toll road developments involving public-private partnerships with significant local private investment. the West Sumatra railway carries mostly coal and cement. Bogor. Operate. such as Jakarta-Surabaya (820 km). cement. Some sections in the Jakarta metropolitan region have been electrified to enable operation of suburban commuter services by electric railcars. The total length of track in operation is 5. which were implemented under Build. fertilizer.040 km of which Java is 3.700 km. Cikampek. of which freight accounts for 100 percent and 60 percent respectively. such as Jakarta. The Java railway contributes about 75 percent of the Indonesian Railways revenues. The total fleet consists of 468 locomotives that include diesel electric and diesel hydraulic locomotives. The Java railway’s core passenger traffic is intercity with long distance services. The South Sumatra Railway generates some 20 percent of total revenues. of which freight accounts for 90 percent. and medium distance services. and Jakarta-Yogyakarta (510 km). the availability and reliability is low. The freight traffic moved by the Java railway consists mostly of petroleum fuel. and Transfer (BOT) arrangements are located around the metropolitan cities in Java. Due to inadequate maintenance and lack of spare parts. Revenue contribution and traffic composition vary significantly among the four railway systems.067 mm gauge. coal. and mostly singled tracked. such as Jakarta-Bandung (180 km). Surabaya. and containers. The average fleet age is approximately 30 years old. with passenger transport accounting for 83 percent of the total. one in Java. Many of these projects. The rail network is made of 1. Ciawi. The South Sumatra dominant traffic is coal. and Malang. The West Sumatra and North Sumatra contribute only 2 percent and 3 percent of total revenues. Karawang. .

traffic congestion continues to hamper large cities like Jakarta. Medan. including buses. and many satellite towns like Bogor. following the liberalization of import motor vehicle rules. Rural Transport With more than 292. Bakasi. and taxis.000 km. Car ownership is increasing. Some 11 million people in remote communities remain without direct access to the all-season road network. At least three million locally assembled motorcycles are added each year. The city of Jakarta has implemented a Bus Rapid Transit system on several kilometers on key city route to help ease traffic congestion. about 80 percent of the total length of the road network is presently under the responsibility of the local governments. The process for identifying road network links to villages (desa) which are still not connected has not been clearly established . is commonly used despite poor public transport facilities. and a rapidly emerging one among the medium-size cities. and Tangerang. Public transport. Surabaya. transforming vehicular pollution in a serious problem for the largest cities. and an additional 6 million people reported to lack any reliable connection to the motorized transport network. Bandung. particularly at peak times. minibuses.Despite rapid infrastructure development in large urban areas.

rice. It is also estimated that at least 20 foreign businesses have left in the first three quarters of 2002 due to local taxes and other regulations that localities have or might impose as they were empowered to do under tax reforms introduced in January 2001.7 billion). and down 57% to R P 25. maintaining a positive yoy growth rate. Sony Electronics. wood. The Batam Industrial Park. Year on year increases declined in second and third quarters.5% to 181 projects.000 to one US dollar. announced that it would be closing its Indonesian operations in March 2003 as part of a plan to downsize from 70 plants to 54 worldwide. from about 2. rubber.600 down to 17. mining. The government encourages industrial investors. when the effects of the global slowdown were aggravated by intensifying political violence and uncertainty climaxing in the 12 October 2002 bombings in the Bali resort of Kuta Beach. Industries which process Indonesia's abundance of natural resources include those based on petroleum. Domestic investment projects also declined in both number and value in 2002 compared to 2001. although one that has dropped steadily from a 7. The leading industries by value are petroleum and natural gas. up from 59 during the same period in 2001. Industrial expansion is given a high priority in development plans. left 75% to 80% of its businesses technically bankrupt. peaking at a 14% increase in the first quarter of 2001. food and tourism. insecurities about the new decentralized tax regime and worsening labor relations were cited as the main factors holding back foreign investment.5% ( yoy ) improvement in the first quarter of 2000 to less than 3% ( yoy ) in the second quarter of 2001. and then turned negative in the fourth quarter. to locate in one of its eight bonded zones (BZs). chemical fertilizers. the US Central Intelligence Agency (CIA) estimates that the industrial production growth rate in 2001 was 3. the Batam Industrial Park or free trade zone (FTZ) or in an exportprocessing zone (EPZ). The Indonesian government's Industrial Production Index showed a year on year ( yoy ) growth throughout 2000. cement. down 31. particularly after 2001. and 35. Approvals.1%. rubber. In the period January to November 2002. sisal.5 mi) south of Jakarta.Indonesia’s Industrial Sector Indonesia's industrial sector has not fully recovered from the blows of the Asian financial crises in 1997–1998. textiles. Indonesia's largest industrial employer.2 billion in purchasing power parity terms).262 billion (about $11. which is much lower. sugar. Smaller enterprises. reflected in the government's figures for nonoil manufacturing. tea. Outside of Batam. palm kernels. coconuts. plywood. when the fall of the rupiah. together with industries producing consumer items for domestic consumption and export and products accelerating agricultural development. Recovery to precrisis levels has been hindered by both internal and external disturbances. Political uncertainties. Overall. located on Batam Island in the Malacca Strait 20 km (12. 80 foreign projects were licensed in Batam. was designed to attract investment away from crowded Singapore. apparel and footwear. which the Indonesian government reports regularly.4% in value (from about $15 billion to $9. In November 2002. foreign investment approvals in 2002 dropped 23% compared to 2001 (from 1333 to 1028). particularly those who plan to export. however. have done better. are indicators of foreign investor confidence but they are not the same as the actual level of investment. and . kapok. Labor-intensive industries are stressed. reaching a -13% ( yoy ) decline in the second quarter of 2002.

glass. In 1992. industry and services took over as the dominant sectors.6% of total export earnings. compared to a 45% share for agriculture and 39% for services. cement works." the Timor. The Asian financial crisis doomed ambitions for the mass production of passenger airplanes. in the 1990s. Manufactured products include consumer goods such as tires and tubes. shipbuilding and aircraft manufacture. textiles were the key industrial export. the state oil company. margarine.cassava. Textiles remains characterized by small producers. Other industries established in recent decades include the Krakatau Steel Industrial Estate at Cilegon (in northwest Java)." at its head. customs. The petroleum refining industry has not grown significantly over the last decade. Huotomo or "Tommy. Production of refined products was 572. the immediate elimination of the National Car Program's privileges had been made a conditional of the Indonesia's IMF bailout program by the Memorandum on Economic and Financial Policies (MEFP) of 15 January 1998. and the manufacture of petrochemicals and urea fertilizers. due mainly to the global economic slowdown. which currently includes 33 producing companies. The value of textiles exports was down 15% from 2000. as well as. but as of 2002. cigarettes. industry accounts for only for 16% of employment.3 million tons exported. Although the government has put an emphasis on developing labor-intensive industries. the European Union (12 May 1997). and issued in April 1998. batteries. and which sought to market the Timor as the "national car. . textiles. tractors. Indonesia had six refineries. employing more than a million workers. and a glass factory. In the meantime. was decentralized in legislation that went into effect in 2001. The Asian financial crisis of 1997–98 swept most vestiges of the project away. but only accounted for 13. with more than 1200 registered textile companies in Indonesia. paper. light bulbs. radios.8 million barrels. respectively contributing about 41% and 42% of the GDP. However. In 1991. operating at 96% capacity. as well as a "national car. iron works. and the United States (12 June 1997). Oil products subsidies are scheduled to be phased out by 2004. a ceramics plant. overall industrial growth was small with agriculture the dominant sector of the Indonesian economy. with agriculture falling to 17%. rubber shoes. Statistics on refined petroleum products consumption are questionable because of considerable smuggling out of Indonesia to escape its price controls. Suharto put his youngest son. all operated by Pertamina. soap. and was predicted to drop another 10% in 2002. " although in fact it was made mostly in Korea. only one has reached the construction phase. From World War II until the 1990s. The government has issued several licenses to foreign investors to build refineries. and trucks. aided by a WTO ruling calling for the elimination of the program's special tax. most ambitiously. and was on track for production of over 100 million tons.5 million tons with 65. Coal production reached 70 million tons per year by 1999. which is 38% higher than the annual production from Indonesia's now eight state-owned refineries in 2001. accounting for 47% of the total. Nepotism and corruption were also charged against the project as Pres. In 2001 production was 92. In 2001 textiles and garments were technically still the leading industrial export. spinning mills. a leathergoods plant. plywood factories. and credit privileges issued by a WTO panel called for on the eve of the crisis by Japan (17 April 1997). and exports of 70 million tons. Indonesia's National Car Project was established in February 1996 as an extension of a 1993 program that gave tariff and tax incentives for using locally produced parts in automobiles. copper and other foundries. in 2002. facilities for automobile assembly. knitting plants. The regulation and licensing of the coal industry in Indonesia.

was cut off abruptly in 2001 when the United States. the depreciation of the currency encouraged chemical production for the export market. There is a shortage of skilled technical personnel to support high-tech industries. its biggest customer. above the total fertilizer production for 1992. the government proposed liberalizing heavy industry. urea production was6. In 1992 steel billet production was 560. these sectors accounted for nearly 80% of exports and 70% of government revenues. a state-owned holding .The steel industry in Indonesia basically consists of one large integrated mill. In the Asian financial crisis. Prospects are good for an export market in urea. Laws are in place to curb the rate of exploitation. total steel billet capacity was 2. In the consumer goods manufacturing sector. but the strongest prospects are for the urea industry because of Indonesia's natural gas deposits.34 million tons across 11 companies. the fuel sector contributed about 20% to Indonesia's foreign exchange earnings and a waning amount of government tax revenues. are Indonesia's second-largest sector of industrial exports. Prior to 1997. Indonesia's total steel production dropped from 7. The robust growth in the output of wood and wood products. from 4 million cm in 1967 to an estimated 60 to 70 million cm in 2001. but it is estimated that over half of the logging done is illegally.3 million tons in 1997 to 2. Global Forest Watch estimates that forest cover has declined from 162 million hectares to 98 million hectares (39. the PT Krakatau Steel complex plus numerous mini mills that use scrap steel as their raw material input. and after 1997. pulp. The chemical industry experienced an annual growth rate of 13% prior to 1993.5%) from 1995 to 2000. and transport equipment. and fertilizer formed less than 1% of exports. and may take over from petroleum as a major source of export revenue. Eastern Europe and Latin America. and paper products. most technology has been imported through joint ventures. activities are run primarily by private enterprise. In July 1992 non-tariff barriers were reduced and key industries were deregulated to allow free importation of essential manufacturing inputs. fertilizer. In 1997.7 million tons in 1998 as domestic demand collapsed. All oil and natural gas processing have historically been controlled by government enterprises.5 million tons. particularly. as have been other major heavy industries. The industry was able to survive through exports. Wood and wood products have traditionally been Indonesia's second-largest industrial export group. Natural gas production has steadily increased.954 million tons. After the recession in 1998. produced about one million barrels of refined petroleum per day. Natural gas proven reserves will last 40 years at current production rates. all owned by the state company Pertamina. and plants. were running at near 100% capacity. paper products. Wood products. is the cause of international controversy because of the rapid deforestation involved. however.000 barrels per day in 1999. In 2001. but the plants were only running at 60% capacity. accounting for 11% or 12% of total export value. many of them state-owned. 140 were scheduled for privatization. placed dumping duties on Indonesian steel. which reached 180. which was 6. though electronic some times claims a larger share. The agency for Strategic Industries (BPIS). Indonesia's eight oil refineries. What recovery had been achieved in 2000. cement. Indonesia produces nitrogen. Of the 168 parastatals. phosphate and potash fertilizers. In 2000.000 tons. although facing stiff competition from its regional neighbors. paper. but in 2002 most fertilizer output was for domestic consumption. contributing 9% of the GDP in 1999. In 2001 consumption of plywood was 13 million cu m and the total consumption of logs was 26 million cu m. such as basic metals. During the 1990s.

and rubber products (4. and Korea (8. up 20. up 31.5%).8%). textile and footwear (8.5 billion in 2009. minerals (14. trade deficit with Indonesia totaled $9. Singapore (8. Exports . The largest export commodities for 2010 were oil and gas (17. with an overall decline of at least 15%. a rise of 35% from $116.54%). Tsunami in Indonesia 2009 A powerful earthquake struck waters off eastern Indonesia early Thursday. property. Most industrial enterprises were negatively affected by the 1998 recession. telecommunications and high-technology industries. rose 0. plywood production plants. and agribusinesses Exports and Trade Indonesia's exports were $158 billion in 2010.1% deficit increase in 2005 from the year earlier. up from $96. mining facilities.83 billion in 2009. electrical appliances (8.4% since 2002.4% from 2002.1 billion in 2006. Indonesia is currently our 28thlargest goods trading partner with $23. . briefly triggering fears of a tsunami. vehicle assembly lines. The top destinations for exports for 2010 were Japan (16. chemical plants.S. The U.2%). The Indonesian Bank Restructuring Agency (IBRA) took over the majority of Indonesia's non-performing industrial assets in 2000 with plans to sell. the U. including: cement factories. total imports in 2010 were $136 billion.8% to $3.9%).7%).S. Meanwhile.5 billion in imports). crude palm oil (8. It was not immediately clear if there were injuries or including aircraft.9%). plywood. rubber Imports Indonesian imports from the U. electrical appliances.6%).9 billion in exports versus $16. textiles. food processing firms. In terms of the merchandise flow between the two countries.5 billion in 2010 ($6.2% in 2006 – up from the 10.3%). (11.S. The U. manufacturing plants.commodities: oil and gas. the local geological agency said. formed a joint venture with a major foreign multinational technology corporation to promote technology transfer to Indonesia. China (11.3 billion in 2006. trade deficit with Indonesia increased 15. America’s trade deficit with Indonesia was $10.4 billion in total (two-way) goods trade during 2010.S.3%).1%).

56 Billion US dollars at current prices .Earthquakes of this size can generate local tsunamis that could be destructive along coasts located within 62 miles of the epicenter. GDP of Indonesia $706. one measuring magnitude 5. The quake was followed by two aftershocks. It said it had a depth of about 20 miles beneath the ocean floor. said she did not feel anything and there were no visible signs of panic. Geological Survey said the 7.000. the USGS said. Grace Wakary. One Manado resident. the northernmost city on Sulawesi island. The country's local geological agency initially told reporters that the quake had the power to trigger a tsunami.The U.000 people — more than half of them in Indonesia's Aceh province alone.The Pacific Tsunami Warning Center said that a pacific-wide tsunami that would threaten Hawaii was not expected.6. but lifted the alert about an hour later. A tsunami off Java island in 2007 killed nearly 5." an arc of volcanos and fault lines encircling the Pacific Basin. In December 2004.S.Indonesia is prone to seismic upheaval due to its location on the so-called Pacific "Ring of Fire.9 and the other 5. a massive earthquake off the country's western island of Sumatra triggered a tsunami that battered much of the Indian Ocean coastline and killed more than 230.0-magnitude quake was centered 195 miles from Manado.

. in 2010 Bank Indonesia held its BI Rate at a level of 6. The mix of instruments used for internal stability aimed at stabilising prices and managing domestic demand. Meanwhile. exchange rate stability and financial system stability. namely maintaining price stability.000 (2009 est. This policy mix was further supported by other policies to maintain financial system stability as well as government policies. Despite improved economic performance. These challenges left Bank Indonesia facing a trilemma.200 (2010 est.) Reasonable cost of living As an EF teacher in Indonesia. the rupiah exchange rate strengthened with low volatility. relying on merely one policy instrument was insufficient. rising inflation as well as several problems in the banking sector and impediments in the real sector.) Cost of Living in Indonesia GDP . you will be surprised at how far your money can go! The cost of living in Indonesia is very reasonable.5%. up to the middle of 2010 infltion was well controlled. However. the domestic economy remained facing a number of key challenges that consists of massive foreign capital inflows. in the middle of 2010 Bank Indonesia issued macroprudential policy for managing domestic liquidity and the surge in foreign capital inflows. Therefore.9 billion (2011 est. the intensity of supplyside disruptions during the second half of the reporting year. a large balance of payments surplus and improved financial sector performance.) $4. while external stability aimed at the management of foreign capital inflows and exchange rate stability.900 (2008 est. heightened inflationary pressures that pushed inflation above its target.5 billion Expenditures: $132. in particular food items. Budget: revenues: $119. Underpinned by such strong fundamentals and positive perceptions concerning the Indonesian economy. This was reflected by robust GDP growth.) $3. excess liquidity in banking system. In 2010 Bank Indonesia instituted a policy mix to ensure internal and external stability. In terms of prices. Referring to interest rate policy. especially if you are interested in experiencing the culture as a true insider. in addition to the interest rate policy. and a policy mix was required.Financial statement Domestic economic performance improved during 2010 amid a multi speed global economic recovery.per capita (PPP): $4.

childrens clothing and footwear.70 Soft drink (cola etc): $0.50 Pre paid cell phone card: $1-$5 Nasi Goreng (Fried Rice): $0. you can cut even more cost and end up with a fatter wallet. higher quality of life You will find that the combination of your competitive salary with EF and the relatively low cost of living in Indonesia will give you purchasing power much greater than in your own country.50 A package of instant noodles: $0.50 Local brand toiletries: $1. alcohol at a bar. The overall cost of living is determined using the prices for defined quantities of the same goods and services across 13 Basket Groups. Approximate prices and costs Here is just a sample of what your cost of living in Indonesia could be:             A dish from a local restaurant: $1-$2. . If you eat local food from local restaurants or food stalls and shop in local markets. locally produced spirit.50-$2.15 Refill bottled water (1gallon): $0.50 Fresh fruit: $0.90-$1. Jakarta in Indonesia is currently ranked 198 overall out of 950 places (rank 1 is most expensive: rank 950 is least expensive).50 Starbuck's coffee: $2.75 Heineken beer: $1.50 Paperback book: $0. EF teachers make a great living by local standards and they often tell us that their salary offers them a great quality of life. whiskey. There are 12 places that are more expensive. casual clothing. go to the spa. Lower living cost. With your salary you can afford a lifestyle that you did not think possible back home: eat-out and take taxis. Clothing costs are low compared to other places for items such as clothing and footwear products. and 937 places that are less expensive for alcohol and or tobacco.30 Bintang beer: $0.90 Cost Of Living The cost of living in Jakarta in Indonesia is high compared to other places. beer. and wine (where alcohol is legally sold) as well as for tobacco products such as cigarettes. business suits.20-$1. The cost of living rank for each of the 13 Basket Groups is as follows: Alcohol & Tobacco costs are very high compared to other places for items such as alcoholic beverages. fly to Bali for the weekend. coats and hats.Many EF teachers in Indonesia enjoy the option of sharing a house or apartment with other EF teachers to split the cost.

Communication costs are average compared to other places for various communication costs such as home telephone rental and call charges. newspapers and magazines. toothpaste. Miscellaneous costs are very low compared to other places for items such as stationery. Furniture & Appliance costs are very high compared to other places for items such as furniture. nappies. general practitioner consultation rates. hair care. meat. toilet paper. There are 186 places that are more expensive. There are 735 places that are more expensive. Household Accommodation costs are high compared to other places for items such as housing.evening wear. fresh vegetables. and 763 places that are less expensive for personal care. soft drinks. sauces. Healthcare costs are high compared to other places for general healthcare. Education costs are low compared to other places for items such as creche / pre-school fees. and 734 places that are less expensive for healthcare. fruit juices. internet connection and service provider fees. baking. fresh fruits. household equipment and appliances. seafood. linen. and 113 places that are less expensive for miscellaneous items. and tertiary study fees. oil & vinegars. fridge freezer. mobile / cellular phone contract. There are 65 places that are more expensive. domestic help. Grocery costs are very high compared to other places for items such as food. vacuum cleaner. kettle. mortgage. snacks. cleaning products. . household gas / fuel consumption. cosmetics. DVD player. toaster. There are 43 places that are more expensive. There are 385 places that are more expensive. and postage stamps. data. and private medical insurance / medical aid contributions. primary school fees. iron. pet food. linen. household water consumption. shoe repairs. and 906 places that are less expensive for groceries. light bulbs. Personal Care costs are very high compared to other places for items such as personal care products and services. non-alcoholic beverages and cleaning material items such as baby consumables. There are 695 places that are more expensive. water. pain relief tablets. medical and medical insurance. dairy. office supplies. canned foods. There are 215 places that are more expensive. and 564 places that are less expensive for communication. cheese. pre-prepared meals. local rates and residential taxes. and 670 places that are less expensive for household accommodation. and soap / shampoo / conditioner. television. dry cleaning. and calls. There are 836 places that are more expensive. and local property rates / taxes / levies. and 884 places that are less expensive for furniture and appliances. household gas. electricity. moisturizer / sun block. household fuels. high school / college fees. and 214 places that are less expensive for education. house / flat rental. and washing machine. spices & herbs . household electricity consumption. and underwear. microwave. general goods and services. and 254 places that are less expensive for clothing. There are 279 places that are more expensive. hospital private ward daily rate. baked goods. non-prescription medicine.

the most recent of which took place in September 2008 in Brussels. There are 292 places that are more expensive. This cooperation was formalised under the 1980 EC-ASEAN Agreement. dinner at a restaurant (non fast food). hotel rates. hire purchase / lease of vehicle. take away drinks and snacks (fast food). . the EU and Indonesia have intensified their partnership. and vehicle purchase. There are 207 places that are more expensive. EU cooperation with Indonesia dates back to the 1970s. vehicle insurance and vehicle maintenance. cinema tickets. tires. In terms of the hardship people are likely to experience. vehicle Insurance. its geopolitical importance and its role in the fight against the effects of climate change. Meals Out and Hotel costs are low compared to other places for items such as a business dinner. representing more than 10% of its total external trade. and 260 places that are less expensive for restaurants. Indonesia being a part of SAARC. The EU is Indonesia's 4th largest trading partner. Personalized cost of living indexes for Jakarta in Indonesia are based on the basket groups and comparison location(s) selected in the Calculators. NAFTA. There are 689 places that are more expensive. and 657 places that are less expensive for transport. and theatre tickets. and 742 places that are less expensive for recreation and culture. Jakarta in Indonesia is ranked as high degree of hardship with a hardship index of 30%. assessed in global terms. public transport service maintenance. vehicle costs. A political and economic dialogue between the EU and Indonesia was re-launched in February 2000 with the release of the Commission's Communication "Developing Closer Relations between Indonesia & the EU". Over the past few years.Recreation and Culture costs are high compared to other places for items such as books. DVDs and CDs. given its size. ASEAN Indonesia is not a part of SAARC The European Union considers Indonesia a priority country. petrol / diesel. sports goods. Transport costs are high compared to other places for items such as public transport. The EU Delegation in Indonesia was opened in 1988. The political dialogue is undertaken through annual Ministerial meetings and through regular Senior Officials Meetings. vehicle fuel. meals out and hotels. Restaurants. European Union. camera film.

Jotun follows the saying ‖It is ok to walk away from projects if it cannot be won in fair competition‖. and Thailand. Jotun has experienced many situations dealing with this issue. it doesn’t consist on Indonesia Since its founding on August 8. Staying true to their values (loyalty. Malaysia. 1967. ASEAN has been a major focus of Indonesia's regional international relations. Jotun has managed to achieve more than 34 percent sales increase every year since 2005 and are planning to continue this trend with an annual sales increase of 30 percent. care. respect and boldness) has made them face challenges in a professional way. The biggest challenge for businesses trying to operate in Indonesia is corruption. Singapore. has given them a lot of respect. Their way of fighting corruption is education. The most common situation is kickbacks to the customer’s employees. With their six branch offices around Indonesia. each with a market share of more than 30 percent. . They started selling products from their own production facilities in 2000 and have experienced rapid growth since 2006. the Indonesian workers don’t necessarily see it as a problem. they have designed a ―decision-making model card‖ where all things that are unacceptable to Jotun as a company are listed. helped construct a regional multinational framework to facilitate economic cooperation. This strength has enabled them to reach the strong position they hold today. To remember what is legal or not. diminish intra-ASEAN conflict. From the point of view of Jakarta-the site of ASEAN's general secretariat--ASEAN's predecessor organizations had been flawed Case Study Jotun – Success Stories in Indonesia Jotun Indonesia was established in 1985 within protective and marine paint. They have of course met several challenges on their way to success. As corruption has been a part of the everyday life ever since the colonization. This has helped them to succeed in Indonesia. By teaching them not to contribute to corruption they have built an environment where everyone is strongly aware of the non-corruption policies.NAFTA having members as Canada. United States. and formulate ASEAN positions regarding perceived potential external threats. Their strong beliefs in playing fair and their ability to leave contracts that can’t be achieved without using corruption. together with Brunei. the Philippines. They teach employees how to deal with corruptive issues and that articipating in such deals are not accepted. Mexico. In ASEAN Indonesia. they have come to establish themselves as the number one in Indonesia within the marine and protective coating market.

We have interviewed a handful of international companies. financial support is given to a choir for blind people. Jotun’s story proves it is possible for a Norwegia company to be very successful in Indonesia.Jotun´s leadership team is equal when it comes to the number of women and men.affected areas and prizes are given to all the employees’ kids who achieve the ―bestin. we have gathered information on all of the topics presented in the report. being highly respected. and shipping are sectors with tremendous potential that are especially relevant to Norwegian companies and investors. energy. Jotun is by far exceeding the CSR requirements set by both the Norwegian ministry of foreign affairs and the Indonesian government. The challenges we found most important were corruption. pharmaceutical products and telecommunication. donations are paid to earthquake.class‖ status. consumer goods. high quality helmets are also provided for all bikers at Jotun. Indonesia seems to be slowly improving on . detailed insight on opportunities and challenges in the Indonesian market and some practical information about working in Indonesia and Jakarta. As a result of our research we identified 8 sectors with great opportunities for foreign investments. Other prosperous sectors are power generation equipment. And that it is possible to do good business in third world country and at the same time take good care of your employees and the local community International Business in Indonesia The purpose of International Business report 2011 Indonesia is to explore the Indonesian market and help encourage investment. gas. mainly focusing on Norwegian and Indonesian businesses. with the exception of two extraordinary positions for which they have retained their seniors who helped establish the company in Indonesia. They have been a tremendous resource for Jotun as long as the company has been in the country. non electronic machinery. Their salary level is much higher than the industry standard and they are continuously working with HSE. three main challenges one will face in Indonesia and what are important to consider when moving employees to Jakarta and Indonesia. All these are critical to doing business. These are some examples of their charity work. infrastructure and the legal system. Deep-water oil fields. The report will provide potential investors an overview of the Indonesian economy and society. They have also initiated an enormous program concerning benefits to the employees and the support of the local community. Oil. To facilitate safe driving. Through our trip and field studies in Jakarta. geothermal energy and LNG gas are particularly attractive investment fields. Liters of paint are given out regularly to schools and mosques with painters provided. with all of their relations and market knowledge.

or one of which is a joint venture bank.S. BI hoped to encourage small banks with less than Rp 100 billion (about U. announcing the criteria for anchor banks in July 2005. Our report has limitations. and needs a boost not to put a cap on investment opportunities. Banking Sector Indonesia has 120 commercial banks (October 2011). the Capital Market and Financial Institution Supervisory Board (BAPEPAM-LK). culture and way of thinking. exceptions would be granted in controlling two banks that do business under different principles. The Indonesian central bank. Another limitation with our research is that we visited a limited number of companies.510 in 2011.4% of assets in the sector. BI announced a single presence policy to further prompt consolidation. We have only been in Indonesia for a limited period of time. such as commercial and sharia. and the Ministry of Finance that was launched in 2004.all these issues. cheap labour and growing middle class the potential is exceptional. This may cause the report to be too one-sided. The policy stipulated that a single party could own a controlling interest in only one banking organization. In October 2006.397 in 2000 to 14. With Indonesia’s enormous natural recourses. We have also talked to locals and expatriates in more informal settings and to our best ability tried to understand the Indonesian history. the Indonesian Chamber of Commerce and Industry and the European Chamber of Commerce. We have tried to balance our visits with two Indonesian companies. announced plans in January 2005 to strengthen the banking sector by encouraging consolidation and improving prudential banking and supervision. the main economic activity is based in and around Jakarta so this small area of the country will probably reflect the larger part of Indonesian business. BNI. A cornerstone program of the IBA is the . however infrastructure is at a critical point. Bank Indonesia (BI). $11 million) in capital to either raise more capital or merge with healthier "anchor banks" before end-2010. Anti-Corruption efforts in Indonesia are rapidly increasing in range and intensity with the free-spoken media in the lead.8% of assets (September 2011). Four state-owned banks (Bank Mandiri. which focus on advancing other aspects of the Indonesian Banking Architecture (IBA) and has improved operations of its credit bureau to centralize data on borrowers. Despite of the challenges the country is something every investor should consider. Controlling interest is defined as 25% or more of total outstanding shares or having direct or indirect control of the institution. of which 10 are majority foreign-owned and 28 are foreign joint venture banks while the number of bank branches has continuously increased from 6. three Norwegian companies. Due to this. BRI. Indonesia is definitely a country we would recommend for your future investments. Our conclusion is clear. However. The main part of our research has taken place in the Jakarta area. BI has started to move toward Basel II standards in 2011. BTN) control about 34. The IBA is a joint effort between BI. The challenges can be handled and the opportunities are too big to neglect. the royal Norwegian embassy. The top 10 banks control about 62. our report might not reflect all regions of the country accurately enough. Our studies have taken place in Norway before the field studies and during three weeks in Indonesia.

but represented only 3. brokerages and insurance firms from the central bank (BI) and the capital market watchdog BAPEPAM-LK. which generally target this section of the population. and comparability across countries. the widely used poverty indicator. data availability across the globe is still limited. LPS) in March 2007. while the oversight of commercial banks will start from 2014. the practical use is limited by its reliability. cost effectiveness. By early 2013. The use of income or expenditure as poverty indicator has numerous problems particularly in using it in monitoring poverty impacts of agriculture and rural development projects. will take over the supervision of banks. timeliness. i.structural reinforcement of the national banking system. and health environment quality. intra-household distribution. measuring weight and height of children using objective tools. because the concept of using child nutrition as a poverty indicator is relatively new. Prompted by the need for an alternative indicator for ADB rural development project. Sharia banking has grown in Indonesia in recent years.7% of the banking sector. OJK will have the power to supervise capital markets and non-banking institutions. The evaluation shows that child malnutrition as poverty indicator to assess the fulfillment of socio-economic development goals and targets is conceptually sound and is more practical. the paper evaluates the possibility of introducing child malnutrition as an alternative poverty indicator to the commonly used income indicator. Conclusion and Recommendation Although income or expenditure level as a poverty indicator appears relevant conceptually. Empirical studies show that child malnutrition is closely linked to income level. In October 2011. Financial Services Supervisory Authority (OJK). BI and the Indonesian Government completed the process of replacing the blanket guarantee with a deposit insurance scheme run by the independent Indonesian Deposit Insurance Agency (also known by its Indonesian acronym. about $14. That the relationship between child malnutrition and poverty is most sensitive at the lower end of the income range makes child malnutrition a good indicator for development intervention projects and programs. aimed at building stronger capitalization for commercial banks to underpin its expansion and accelerate the required consolidation process among Indonesia’s 120+ banks. is far more accurate than collecting information on income and/or expenditures based on recall during a survey. anthropometric measurements are also superior to an income or expenditure indicator as collecting information on all income sources of all income earning household members or collecting all expenditures of a rural household is extremely laborious and time-consuming. While conceptually sound. On the basis of cost effectiveness and timeliness of data collection. On the basis of accuracy. gender equality.e. Another important banking sector reform was the decision to eliminate the blanket guarantee on bank third-party liabilities.e. Indonesia has a new regulator to oversee a growing financial industry. Measurements of child malnutrition do not need to be adjusted for inflation and so are not constrained by any inadequacy of price data. The removal of the blanket guarantee did not produce significant deposit outflows from or among Indonesian banks.4 billion in assets as of October 2011. Using Indonesia . The new regulator. A study also shows that child malnutrition is reflective and indicative of other desirable development outcomes i. particularly in the context of rural households in a subsistence economy. anthropometric measurement.

The country has. With this growing awareness. it is highly feasible to adopt child malnutrition as a poverty indicator. however. . However. Indonesia fully implemented the final stage of its commitments under the ASEAN Free Trade Agreement on schedule on 1 January 2002. For development interventions where the expected poverty impacts are expected to be manifest in the medium or long-term. it is expected that it will be widely adopted by all governments in the near future. While child malnutrition could not universally be adopted as a poverty indicator at this point of time due to lack of universally available data. Since baseline information and information on subsequent years are available through secondary sources. the paper found that there is a high level of awareness of the of linkages between child malnutrition and poverty in Indonesia and several secondary sources of data on child malnutrition are readily available. expressed reservations about the pace of liberalization within the ASEAN Free Trade Area (AFTA) and indicated an interest in pursuing emergency exit clauses pertaining to general commitment under the agreement. is gradually being recognized by governments and international agencies around the globe. as well as its timely implementation of Uruguay Round obligations and additional WTO and Association of Southeast Asian Nations (ASEAN) commitments. particularly for monitoring poverty impacts on the low income population. for short-term intervention projects. it's strength and relevance as a poverty indicator. it is recommended that child malnutrition be included as one of the millennium development goal indicators. the feasibility of tracking the change in children needs to be investigated on a case by case basis due to discontinuation of data collection by some district governments after decentralization in 1999. To raise the commitment of governments and donors to prioritize resources to ensure children's health and to encourage routine data collection by all governments. Trade liberalization and other structural reforms undertaken by Indonesia have successfully stabilized the economy and fostered the case to explore the possibility of adopting child malnutrition as a poverty indicator for ADB agriculture and rural development projects. Indonesia's commitment to multilateralism has been confirmed by its active participation in WTO negotiations. The Food and Agriculture Organization of the United Nation(FAO) and the International Funds for Agriculture and Development has recently included child malnutrition as one of the indicators to be assessed in their projects and programs. change in children’s nutritional status can easily be tracked. But the economy remains fragile and the recent global downturn has heavily reduced foreign investment on which the economy critically depends.

Bibliography • • www.Acknowledgement I hereby acknowledge that I have completed this project on ―Review on International Business Environment in Indonesia‖ in my TYBBI (Semester 6) under the guidance of Prof. The information submitted is true and original to the best of my knowledge. D’costa.wikipedia. I would like to express my gratitude to all those who gave me the possibility to complete this www. I would like to specially thank . D’costa for encouraging me and being my guardian for this project and giving me the scope to make this project.

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