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Review on the International Business Environment in

Indonesia
Projected by Heeral Shah 40

Introduction
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 largestand the politically dominantethnic 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.

Etymology
The name Indonesia derives from the Latin and Greek Indus, and the Greek nsos, 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 Indi), popularly Indi; 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, 18841894. 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.

History

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

as the 8th century BCE, allowed villages, towns, and small kingdoms to flourish by the 1st century CE. Indonesias strategic sea-lane position fostered inter-island and international trade, including links with Indian kingdoms and China, which were established several centuries BCE. Trade has since fundamentally shaped Indonesian history.

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

For most of the colonial period, Dutch control over the archipelago was tenuous outside of coastal strongholds; only in the early 20th century did Dutch dominance extend to what was to become Indonesia's current boundaries. Despite major internal political, social and sectarian divisions during the National Revolution, Indonesians, on the whole, found unity in their fight for independence. Japanese occupation during World War II ended Dutch rule, and encouraged the previously suppressed Indonesian independence movement. 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,Sukarno, an influential nationalist leader, declared independence and was appointed president. The Netherlands tried to re-establish their rule, and an armed and diplomatic struggle ended in December 1949, when in the face of international pressure, the Dutch formally recognized Indonesian independence (with the exception of the Dutch territory of West New Guinea, which was incorporated into Indonesia following the 1962 New York Agreement, and the UN-mandated Act of Free Choice of 1969).

Sukarno, Indonesia's founding president Sukarno moved Indonesia from democracy towards authoritarianism, and maintained his power base by balancing the opposing forces of the military and the Communist Party of Indonesia (PKI). An attempted coup on 30 September 1965 was countered by the army, who led a violent anti-communist purge, during which the PKI was blamed for the coup and effectively destroyed. Around 500,000 people are estimated to have been killed. The head of the military, General Suharto, out-maneuvered the politically weakened Sukarno, and was formally appointed president in March 1968. His New Order administration was supported by the US government, and encouraged foreign direct investment in Indonesia, which was a major factor in the subsequent three decades of substantial economic growth. However, the authoritarian "New Order" was widely accused of corruption and suppression of political opposition.

Indonesia was the country hardest hit by the late 1990s Asian financial crisis. This increased popular discontent with the New Order and led to popular protest across the country. Suharto resigned on 21 May 1998. In 1999, East Timor voted to secede from Indonesia, after a twenty-five-year military occupation that was marked by international condemnation of repression of the East Timorese. Since Suharto's resignation, a strengthening of democratic processes has included a regional autonomy program, and the first direct presidential election in 2004. Political and economic instability, social unrest, corruption, and terrorism slowed progress, however, in the last five years the economy has performed strongly. Although relations among different religious and ethnic groups are largely harmonious, sectarian discontent and violence has occurred. 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. As a unitary state, power is concentrated in the central government. Following the resignation of President Suharto in 1998, Indonesian political and governmental structures have undergone major reforms. Four amendments to the 1945 Constitution of Indonesia have revamped the executive, judicial, and legislative branches. The president of Indonesia is the head of state, commander-in-chief of the Indonesian National Armed Forces, and the director of domestic governance, policymaking, and foreign affairs. The president appoints a council of ministers, 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. The president may serve a maximum of two consecutive five-year terms. The highest representative body at national level is the People's Consultative Assembly (MPR). Its main functions are supporting and amending the constitution, inaugurating the president, and formalizing broad outlines of state policy. It has the power to impeach the president. The MPR comprises two houses; the People's Representative Council (DPR), with 560 members, and the Regional Representative Council (DPD), with 132 members. The DPR passes legislation and monitors the executive branch; party-aligned

members are elected for five-year terms by proportional representation. Reforms since 1998 have markedly increased the DPR's role in national governance. The DPD is a new chamber for matters of regional management. Most civil disputes appear before a State Court (Pengadilan Negeri); appeals are heard before the High Court (Pengadilan Tinggi). The Supreme Court (Mahkamah Agung) is the country's highest court, and hears final cessation appeals and conducts case reviews. Other courts include the Commercial Court, which handles bankruptcy and insolvency; a State Administrative Court (Pengadilan Tata Negara) to hear administrative law cases against the government; a Constitutional Court (Mahkamah Konstitusi) to hear disputes concerning legality of law, general elections, dissolution of political parties, and the scope of authority of state institutions; and a Religious Court (Pengadilan Agama) to deal with codified Sharia Law cases.

Foreign Relations and Military

President of Indonesia Susilo Bambang Yudhoyono with Barack Obama, the President of United States, in ceremony at the Istana Merdeka in Jakarta, 9 November 2010. Obama has been quite popular in Indonesia since his experience about being a child in Jakarta was unveiled. In contrast to Sukarno's anti-imperialistic antipathy to western powers and tensions with Malaysia, Indonesia's foreign relations since the Suharto "New Order" have been based on economic and political cooperation with Western nations. Indonesia maintains close relationships with its neighbors in Asia, and is a founding member of ASEAN and the East Asia Summit. 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. Indonesia has been a member of the United Nations since 1950, and was a founder of the Non-Aligned

Movement (NAM) and the Organisation of the Islamic Conference (OIC, now the Organisation of Islamic Cooperation). Indonesia is signatory to the ASEAN Free Trade Area agreement, the Cairns Group, and the WTO, and has historically been a member of OPEC, although it withdrew in 2008 as it was no longer a net exporter of oil. Indonesia has received humanitarian and development aid since 1966, in particular from the United States, western Europe, Australia, and Japan. The Indonesian Government has worked with other countries to apprehend and prosecute perpetrators of major bombings linked to militant Islamism and Al-Qaeda. The deadliest bombing killed 202 people (including 164 international tourists) in the Bali resort town of Kuta in 2002. The attacks, and subsequent travel warnings issued by other countries, severely damaged Indonesia's tourism industry and foreign investment prospects. Indonesia's 300,000-member armed forces (TNI) include the Army (TNI AD), Navy (TNIAL, which includes marines), and Air Force (TNIAU). The army has about 400,000 active-duty personnel. Defense spending in the national budget was 4% of GDP in 2006, and is controversially supplemented by revenue from military commercial interests and foundations. One of the reforms following the 1998 resignation of Suharto was the removal of formal TNI representation in parliament; nevertheless, its political influence remains extensive. Separatist movements in the provinces of Aceh and Papua have led to armed conflict, and subsequent allegations of human rights abuses and brutality from all sides. Following a sporadic thirty-year guerrilla war between the Free Aceh Movement (GAM) and the Indonesian military, a ceasefire agreement was reached in 2005. In Papua, there has been a significant, albeit imperfect, implementation of regional autonomy laws, and a reported decline in the levels of violence and human rights abuses, since the presidency of Susilo Bambang Yudhoyono.

Administrative Divisions

Provinces of Indonesia Administratively, Indonesia consists of 33 provinces, five of which have special status. Each province has its own political legislature and governor. The provinces are subdivided into regencies (kabupaten) and cities (kota), which are further subdivided into districts (kecamatan), and again into village groupings (either desa or kelurahan). Furthermore, a village is divided into several citizen-groups (Rukun-Warga (RW)) which are further divided into several neighbourhood-groups (Rukun-Tetangga (RT)). Following the implementation of regional autonomy measures in 2001, the regencies and cities have become the key administrative units, responsible for providing most government services. The village administration level is the most influential on a citizen's daily life, and handles matters of a village or neighborhood through an elected lurah or kepala desa (village chief). The provinces of Aceh, Jakarta, Yogyakarta, Papua, and West Papua have greater legislative privileges and a higher degree of autonomy from the central government than the other provinces. The Acehnese government, for example, has the right to create certain elements of an independent legal system; in 2003, it instituted a form of Sharia (Islamic law). Yogyakarta was granted the status of Special Region in recognition of its pivotal role in supporting Indonesian Republicans during the Indonesian Revolution. Papua, formerly known as Irian Jaya, was granted special autonomy status in 2001 and was separated intoPapua and West Papua in February 2003. Jakarta is the country's special capital region.

Geography

Map of Indonesia Indonesia lies between latitudes 11S and 6N, and longitudes 95E and 141E. It consists of 17,508 islands, about 6,000 of which are inhabited. These are scattered over both sides of the equator. The largest are Java, Sumatra, Borneo (shared with Brunei and Malaysia), New Guinea (shared with Papua New Guinea), and Sulawesi. Indonesia shares land borders with Malaysia on Borneo, Papua New Guinea on the island of New Guinea, and East Timor on the island of Timor. Indonesia shares maritime borders across narrow straits with Singapore, Malaysia, and the Philippines to the north, and with Australia to the south.

The capital, Jakarta, is on Java and is the nation's largest city, followed by Surabaya, Bandung, Medan, and Semarang. At 1,919,440 square kilometers (741,050 sq mi), Indonesia is the world's 16th-largest country in terms of land area. Its average population density is 134 people per square kilometer (347 per sq mi), 79th in the world, although Java, the world's most populous island, has a population density of 940 people per square kilometer (2,435 per sq mi). At 4,884 metres (16,024 ft), Puncak Jaya in Papua is Indonesia's highest peak, and Lake Toba in Sumatra its largest lake, with an area of 1,145 square kilometers (442 sq mi). The country's largest rivers are in Kalimantan, and include the Mahakam and Barito; such rivers are communication and transport links between the island's river settlements.

Mount Semeru and Mount Bromo in East Java. Indonesia's seismic and volcanic activity is among the world's highest

Indonesia's location on the edges of the Pacific, Eurasian, and Australian tectonic plates makes it the site of numerous volcanoes and frequent earthquakes. Indonesia has at least 150 active volcanoes, including Krakatoa and Tambora, both famous for their devastating eruptions in the 19th century. The eruption of the Toba supervolcano, approximately 70,000 years ago, was one of the largest eruptions ever, and a global catastrophe. Recent disasters due to seismic activity include the 2004 tsunami that killed an estimated 167,736 in northern Sumatra, and the Yogyakarta earthquake in 2006. However, volcanic ash is a major contributor to the high agricultural fertility that has historically sustained the high population densities of Java and Bali. Lying along the equator, Indonesia has a tropical climate, with two distinct monsoonal wet and dry seasons. Average annual rainfall in the lowlands varies from 1,7803,175 millimeters (70125 in), and up to 6,100 millimeters (240 in) in mountainous regions. Mountainous areasparticularly in the west coast of Sumatra, West Java, Kalimantan, Sulawesi, and Papuareceive the highest rainfall. Humidity is generally high, averaging about 80%. Temperatures vary little throughout the year; the average daily temperature range of Jakarta is 2630 C (7986 F).

Biota and Environment

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

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

Economy

Using water buffalo to plough rice fields in Java. Agriculture had been the country's largest employer for centuries

Indonesia has a mixed economy in which both the private sector and government play significant roles. The country is the largest economy in Southeast Asia and a member of the G-20 major economies. Indonesia's estimated gross domestic product (nominal), as of 2010 was US$706.73 billion with estimated nominal per capita GDP was US$3,015, and per capita GDP PPP was US$4,394 (international dollars). June 2011: At World Economic Forum on East Asia, Indonesian president said Indonesia will be in the top ten countries with the strongest economy within the next decade. The Gross domestic product (GDP) is about $1 trillion[3] and the debt ratio to the GDP is 26%. The industry sector is the economy's largest and accounts for 46.4% of GDP (2010), this is followed by services (37.1%) and agriculture (16.5%). However, since 2010, service sector has employed more people than other sectors, accounting 48.9% of the total labor force, this has been followed by agriculture (38.3%) and industry (12.8%). Agriculture, however, had been the country's largest employer for centuries. According to World Trade Organization data, Indonesia was the 27th biggest exporting country in the world in 2010, moving up three places from a year before. Indonesia's main export markets (2009) are Japan (17.28%), Singapore (11.29%), the United States (10.81%), and China (7.62%). The major suppliers of imports to Indonesia are Singapore (24.96%), China (12.52%), and Japan (8.92%). In 2005, Indonesia ran a trade surplus with export revenues of US$83.64 billion and import expenditure of US$62.02 billion. The country has extensive natural resources, including crude oil, natural gas, tin, copper, and gold. Indonesia's major imports include machinery and equipment, chemicals, fuels, and foodstuffs. And the country's major export commodities include oil and gas, electrical appliances, plywood, rubber, and textiles.

Jakarta, the capital of Indonesia and the country's largest commercial center In the 1960s, the economy deteriorated drastically as a result of political instability, a young and inexperienced government, and economic nationalism, which resulted in severe poverty and hunger. By the time of Sukarno's downfall in the mid-1960s, the economy was in chaos with 1,000% annual inflation, shrinking export revenues, crumbling infrastructure, factories operating at minimal capacity, and negligibleinvestment. Following President Sukarno's downfall in the mid-1960s, the New Order administration brought a degree of discipline to economic policy that quickly brought inflation down, stabilized the currency,

rescheduled foreign debt, and attracted foreign aid and investment. (See Berkeley Mafia). Indonesia was until recently Southeast Asia's only member of OPEC, and the 1970s oil price raises provided an export revenue windfall that contributed to sustained high economic growth rates, averaging over 7% from 1968 to 1981. Following further reforms in the late 1980s, foreign investment flowed into Indonesia, particularly into the rapidly developing export-oriented manufacturing sector, and from 1989 to 1997, the Indonesian economy grew by an average of over 7%. Indonesia was the country hardest hit by the Asian financial crisis of 199798. Against the US dollar, the rupiah dropped from about Rs. 2,600 to a low point of 14,000, and the economy shrank by 13.7%. The Rupiah stabilized in the Rs. 8,000 to 10,000 range,[130] and a slow but significant economic recovery has ensued. However, political instability, slow economic reform, and corruption slowed the recovery. Transparency International, for example, has since ranked Indonesia below 100 in its Corruption Perceptions Index. Since 2007, however, with the improvement in banking sector and domestic consumption, the national economic growth has been 6% annually and this helped the country weather the 20082009 global recession. In 2011, Indonesia's inflation rate was only 3.79 percent, well below the government-set target of 5.65 percent. It was the lowest inflation rate since 1998. 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, Indonesia GDP expanded 6.5 percent as its fastest pace since Asian financial crisis, affirming Indonesia as one of Asia's fastest-growing economies. As of 2010, an estimated 13.3% of the population was living below poverty line, and the unemployment rate was 7.1%. 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, for the first time in December 2011, Fitch Rating raised Indonesia's longterm and local currency debt rating to BBB- from BB+ with both ratings is stable. Fitch also predicted that economy will grow at least 6.0% on average per year through 2013, despite a less conducive global economic climate.

Demographics

Balinese children. There are around 300 distinct native ethnicities in Indonesia.

The population of Indonesia according to the 2010 national census is 237.6 million, with population growth still high at 1.9%. 58% of the population lives on Java, the world's most populous island. Despite a fairly effective family planning program that has been in place since the 1960s, the population is expected to grow to around 265 million by 2020 and 306 million by 2050. There are around 300 distinct native ethnicities in Indonesia, and 742 different languages and dialects. Most Indonesians are descended from Austronesian-speaking peoples whose languages can be traced to Proto-Austronesian (PAn), which possibly originated in Taiwan. Another major grouping are Melanesians, who inhabit eastern Indonesia. The largest ethnic group is the Javanese, who comprise 42% of the population, and are politically and culturally dominant. The Sundanese, ethnic Malays, and Madurese are the largest nonJavanese groups. A sense of Indonesian nationhood exists alongside strong regional identities. Society is largely harmonious, although social, religious and ethnic tensions have triggered horrendous violence. Chinese Indonesians are an influential ethnic minority comprising 34% of the population. Much of the country's privately owned commerce and wealth is Chinese-Indonesian-controlled, which has contributed to considerable resentment, and even anti-Chinese violence.

The Istiqlal Mosque in Central Jakarta. Indonesia is the world's most populous Muslimmajority nation.

The official national language, Indonesian, a form of Malay, is universally taught in schools, and consequently is spoken by nearly every Indonesian. It is the language of business, politics, national media, education, and academia. It is based on the prestige dialect of Malay, that of the Johor-Riau Sultanate, which for centuries had been the lingua franca of the archipelago, standards of which are the official languages in Singapore, Malaysia and Brunei. It was promoted by Indonesian nationalists in the 1920s, and declared the official language under the name Bahasa Indonesia on the proclamation of independence in 1945. Most Indonesians speak at least one of the several hundred local languages and dialects, often as their first language. Of these, Javanese is the most widely spoken as the language of the largest ethnic group. On the other hand, Papua has over 270 indigenous Papuan and Austronesian languages, in a region of about 2.7 million people. While religious freedom is stipulated in the Indonesian constitution, the government officially recognizes only six religions: Islam, Protestantism, Roman

Catholicism, Hinduism, Buddhism, and Confucianism. Although it is not an Islamic state, Indonesia is the world's most populous Muslim-majority nation, with 86.1% of Indonesians being Muslim according to the 2000 census. On May 21, 2011 the Indonesian SunniShia Council (MUHSIN) was established. The council aims to hold gatherings, dialogues and social activities. It was an answer to violence committed in the name of religion. The majority of Muslims in Indonesia are Sunni. 9% of the population was Christian, 3% Hindu, and 2% Buddhist or other. Most Indonesian Hindus are Balinese, and most Buddhists in modern-day Indonesia are ethnic Chinese. Though now minority religions, Hinduism and Buddhism remain defining influences in Indonesian culture. Islam was first adopted by Indonesians in northern Sumatra in the 13th century, through the influence of traders, and became the country's dominant religion by the 16th century. Roman Catholicism was brought to Indonesia by early Portuguese colonialists and missionaries, and the Protestant denominations are largely a result of Dutch Calvinist and Lutheran missionary efforts during the country's colonial period. A large proportion of Indonesianssuch as the Javanese abangan, Balinese Hindus, and Dayak Christianspractice a less orthodox, syncretic form of their religion, which draws on local customs and beliefs.

Culture

Wayang Kulit (shadow puppet) in Wayang Purwatype, depicting five Pandava, from left to right: Bhima,Arjuna, Yudhishtira, Nakula, and Sahadeva, Indonesia Museum, Jakarta.

Indonesia has about 300 ethnic groups, each with cultural identities developed over centuries, and influenced by Indian, Arabic, Chinese, and European sources. Traditional Javanese and Balinese dances, for example, contain aspects of Hindu culture and mythology, as do wayang kulit (shadow puppet) performances. Textiles such as batik, ikat, ulos and songket are created across Indonesia in styles that vary by region. The most dominant influences on Indonesian architecture have traditionally been Indian; however, Chinese, Arab, and European architectural influences have been significant. Sports in Indonesia are generally male-orientated and spectator sports are often associated with illegal gambling. The most popular sports are badminton and football. 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, as well as numerous Olympic medals since the sport gained full Olympic status in 1992. Its women have won the Uber Cup, the female equivalent of the Thomas Cup, twice, in 1994 and 1996. Liga Indonesia is the country's premier football club league. Traditional

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

Geographic Coordinates Latitude/Longitude (of the Capital City) Jakarta 6 8' 0" S / 106 45' 0" E Relative Location Indonesia, located on both sides of the Equator, is therefore in both the northern and southern hemispheres, as well as the eastern hemisphere. It's positioned just to the north of Australia in far Southeast Asia, and bordered by the Indian Ocean, Pacific Ocean, over a dozen regional seas, and the countries of Malaysia, Papua New Guinea and East Timor

Land Statistics Coastline 33,999 miles (54,716 km) Land Areas (land) 705,192 sq miles (1,826,440 sq km) (water) 35,907 sq miles ( 93,000 sq km) (TOTAL)741,099 sq miles (1,919,440 sq km) Landforms This archipelagic nation contains over 18,000 islands. Of those, the larger islands of Sumatra, Java, Kalimantan, Sulawesi, and Irian Jaya are quite mountainous,

with some peaks reaching 12,000 ft. The highest elevations (over 16,000 ft) are found on Irian Jaya in the east. Located along the Ring of Fire, Indonesia has some400 volcanoes within its borders, with at least 90 still active in some way. Significant rivers include the Barito, Digul, Hari, Kampar, Kapuas, Kayan and Musi. There are also scattered inland lakes, small in size. Highest Point Puncak Jaya - 16,502 ft. (5,030 m) Lowest Point Indian Ocean - 0 ft. (0 m) Land Divisions 30 provinces, including: Bali, Banten, Bengkulu, Gorontalo, Irian Jaya Barat, Jambi, Jawa Barat, Jawa Tengah, Jawa Timur, Kalimantan Barat, Kalimantan Selatan, Kalimantan Tengah, Kalimantan Timur, Kepulauan Bangka Belitung, Kepulauan Riau, Lampung, Maluku, Maluku Utara, Nusa Tenggara Barat, Nusa Tenggara Timur, Papua, Riau, Sulawesi Barat, Sulawesi Selatan, Sulawesi Tengah, Sulawesi Tenggara, Sulawesi Utara, Sumatera Barat, Sumatera Selatan and Sumatera Utara. In addition, there are two special regions; Aceh and Yogyakarta, and the capital city district of Jakarta Raya.

A smiling cow, rural Indonesia

Climate With its location on, or just below the Equator, Indonesia is generally hot and humid throughout the year, with moderate cooling in the higher elevations. Average temperatures (highs and lows) throughout the year vary little based on its geographic position. Daily (brief) rainstorms are the norm, and the rainy season runs from mid-December through March.

A happy local child, Indonesia

Traveller Information Attractions Indonesia and its thousands of islands offer a diverse variety of ecologies, and in recent years eco-travel to the country has increased dramatically. The capital city of Jakarta remains the major attraction, with its colonial-style buildings and monuments reminiscent of its Dutch and British periods. Additionally within the city, points-of-interest include the Central Museum; historic Portuguese Church; Istiqlal Mosque, and the many antique markets, shopping bazaars and ethnic restaurants that cover the streets. Outside of Jakarta, other destinations include the islands of Sulawesi (Orchid Island), Sumatra, with its volcanic mountains and hot springs, and of course, Bali. Unfortunately, due to continuing concerns about the possibility of additional terrorist attacks directed against western citizens and interests, the U.S. Department of State and other governments continue to warn their citizens to defer non-essential travel to Indonesia, and especially to Bali. Country Dialling Code 62

Threats to safety and security:


Since 2005, the Indonesian police and security forces have disrupted a number of terrorist cells, including Jemaah Islamiyah (JI), a U.S. government-designated terrorist organization that carried out several bombings at various times from 2000 to 2009. Indonesia suffered its worst terrorist attack in 2002, when more than 200 foreign tourists and

Indonesian citizens were killed in Bali. 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. In July 2009, JI-affiliated elements bombed two Western hotels in Jakarta, killing nine Indonesians and foreigners and injuring over 50, including six U.S. citizens. Since these attacks, Indonesia has effectively pursued counterterrorism efforts through legislation and law enforcement. In 2010, security forces arrested more than 100 individuals on terrorism-related charges. However, violent elements in Indonesia continue to demonstrate a willingness and ability to carry out violent attacks with little or no warning. Extremists may target both official and private interests, including hotels, nightclubs, shopping areas, and restaurants. Whether at work, pursuing daily activities, and/or while traveling, you should be vigilant and prudent at all times. Monitor local news reports, vary your routes and times, and maintain a low profile. Be sure to consider the security and safety preparedness of hotels, residences, restaurants, and entertainment or recreational venues that you frequent. In November 2009, unknown assailants shot at foreigners in Banda Aceh, North Sumatra, an area that was devastated by the 2004 tsunami and the scene of a long-running separatist conflict that ended in 2005. The gunfire wounded a European development worker. In the same area, a house occupied by U.S. citizen teachers was targeted and hit by gunfire, but there were no U.S. citizen casualties. Indonesian security forces are engaged in combat and policing operations to suppress the Free Papua Movement (OPM), a low-intensity separatist insurgency. However, separatists in Papua continue to conduct occasional, violent attacks against police and civilians in the province that resulted in the deaths of and injuries to local residents and expatriate workers.

Crimes
Crime can be a problem in some major metropolitan areas in Indonesia. Crimes of opportunity such as pick-pocketing and theft occur throughout the country. If you are in Jakarta and Surabaya, hire a taxi either at a major hotel or shopping center queue, or by calling or hailing a reputable taxi company, such as Silver Bird, Blue Bird or White Express. If you are arriving at Soekarno-Hatta International Airport in Jakarta, use only these taxis obtained at a designated taxi queue or clearly marked taxi stand. Politely decline all offers of help from touts or anyone who approaches you. 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. It is best to request meet and greet services from your hotel in advance. Add about 25,000 Rupiah to the metered fare for required airport taxes and toll road fees. Depending on traffic, a minimum metered fare is 150,000-200,000 Rupiah from Soekarno-Hatta airport to central Jakarta. Criminals in Jakarta regularly rob customers in taxis painted to look like taxis from reputable companies; booking taxis by telephone directly from the company or through hotels is the best way to avoid falling victim to this scam.

Indonesian police have noted an upward trend in burglaries and armed robberies in Jakarta, an increase of 25 percent in 2010, particularly in wealthier areas where expatriates tend to live. The best defense is to proactively take personal responsibility for your own security: know the layout of your dwelling, have someone at home at all times, discuss security procedures with your family and household staff, and know your neighborhood. Claiming to act in the name of religious or moral standards, certain extremist groups have, on occasion, attacked nightspots and places of entertainment. Most of these attacks have sought to destroy property rather than to injure individuals. International news events can sometimes trigger anti-American or anti-Western demonstrations. Credit card fraud and theft is a serious and growing problem in Indonesia, particularly for Westerners. Travelers should minimize use of credit cards and instead use cash. If used, credit card numbers should be closely safeguarded at all times. There have been many reports of shop, restaurant, 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. Travelers should also avoid using credit cards for online transactions at Internet cafes and similar venues. Travelers who decide to use credit cards should monitor their credit card activity carefully and immediately report any unauthorized use to their financial institution. ATM cards have been skimmed and cloned, resulting in bank accounts being drained. If you choose to use an ATM, exercise the same level of caution you would in the United States when using unfamiliar ATM machines and monitor your statements closely. Selecting tour guides, hotels, and business partners based on their reputation, competence, and ability to help can be very useful when considering a stay in Indonesia.

Special Circumstances
Accessibility: Indonesia enacted laws in 1997, 1998, 2004, 2007, and 2008 regarding accessibility for the disabled. However, except for buildings constructed under international standards, most public places and transportation facilities are not accessible, and applicable laws are not enforced. Persons with disabilities will face severe difficulties in Indonesia as walkways, road crossings, rest rooms, and tourist and other areas are not equipped with accommodating features. Sharia law: Sharia law is enforced in Aceh, northern Sumatra, by a separate police force. In a few other areas, it exists unofficially or through local legislation. In these areas, implementation is uneven, processes are opaque, and enforcement can be arbitrary. Sharia authorities rarely confront non-Muslims about violations of Sharia law, but this has occurred. Visitors to all areas are encouraged to respect local tradition, dress modestly, and seek guidance from local police if confronted by Sharia authorities. Many women, both Muslim and non-Muslim, carry a scarf to drape around their head while traveling in Aceh, although wearing a headscarf is not compulsory, and non-Muslim women are not necessarily expected to wear one. 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.

Natural Disasters: Many areas of Indonesia are at high risk for natural disasters due to the country's geographic location and topography. If you are planning hikes or other outdoor activities in Indonesia, obtain up-to-date information on local conditions, travel with a reputable local guide, have overseas medical insurance, and carry a local mobile phone. Obey instructions from security and emergency personnel, and do not enter restricted areas. Organized and trained rescue services are rudimentary in populated areas and do not exist in remote areas. If you get into trouble, you may find yourself at great risk even if you can communicate your plight. Earthquakes and Tsunamis: The Indian Ocean earthquake and tsunami in December 2004 killed more than 130,000 people and left over 37,000 missing in Aceh and North Sumatra. In January 2009, a magnitude 7.7 quake struck the north coast of Papua between the cities of Sorong and Manokwari causing deaths and heavy damage. In September 2009, magnitude 7.6 and 7.9 earthquakes struck the towns of Jambi and Padang in Sumatra, causing widespread damage and 700 deaths and many more injuries. 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. Because of the islands' remoteness, emergency response personnel needed several days to evacuate tourists and bring in emergency relief supplies. 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; be sure to establish an escape route beforehand. The city of Jakarta lacks an earthquake plan, according to its own 2010 report, which is a common problem replicated throughout the country. Volcanoes: Mt. Merapi, a volcano near Yogyakarta, erupted with massive pyroclastic flows from April to early July 2006 and again in late 2010, disrupting air travel as far away as Jakarta and causing hundreds of casualties in the volcano's vicinity. Mount Sinabung in the Tanah Karo Highlands of North Sumatra erupted in August 2010. The eruption caused the evacuation of 30,000 people. Flooding and Landslides: These frequently follow heavy rains, and travelers should exercise caution both in and outside of cities. On the roads, be aware of the possibility of land slippage, road washouts, and potholes. Fires: Fire departments lack modern equipment and training. Seventy percent of Jakarta's fire hydrants are inoperative, and the city fire department is only manned at fifty percent of its recommended level. Outside of Jakarta, fire prevention is no better. Occupants of high floors and crowded markets are at great risk, since fire departments are unable to reach those places. Environmental Quality: Air quality outside of Jakarta and other major cities is acceptable most of the time. However, within Indonesia's major cities, air quality can range from "unhealthy for sensitive groups" to "unhealthy." Some expatriate residents of Jakarta have tested positive for highly elevated levels of carbon monoxide in their blood. The air and water quality in Jakarta is particularly polluted. Individuals susceptible to chronic respiratory illnesses should consult with their doctor before spending significant amounts of time in Jakarta. Open burning of rain forests continues, although to a lesser degree than in the early 2000s. Water is not potable. A 2008 study showed that 100 percent of Jakarta's water is contaminated by fecal coliform bacteria (see below). Only bottled water should be consumed. Sewage and drainage systems are incomplete.

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

Currency: The widespread use of counterfeit currency causes banks, exchange facilities, and most commercial establishments to not accept U.S. currency that is worn, defaced, torn, or issued before 1996. Dual Nationality: Indonesian law does not recognize dual nationality for adults over 18 years of age. Because of this law, U.S. citizens who are also documented as Indonesian nationals may experience difficulties with immigration formalities in Indonesia. Holding dual citizenship may also hamper the U.S. Embassy's ability to provide consular protection to dual national U.S. citizens. In addition to being subject to all Indonesian laws affecting U.S. citizens, dual nationals may also be subject to other laws that impose special obligations on Indonesian citizens. In July 2006, the Indonesian Parliament passed new legislation allowing children under age 18 to hold foreign as well as Indonesian citizenship. Parents whose children hold both Indonesian and U.S. citizenship continue to experience difficulties with entry and exit immigration procedures. Transportation: There has been a rapid rise in all manners of public and private transportation within Indonesia. New private airlines have begun operations over the past several years, as have new bus and ferry lines. Air, ferry, and road accidents resulting in fatalities, injuries, and significant damage are common. While all forms of transportation are ostensibly regulated in Indonesia, oversight is spotty, equipment tends to be less well maintained than that operated in the United States, amenities do not typically meet Western standards, and rescue/emergency response is notably lacking. Travelers by boat or ferry should not board before confirming that adequate personal floatation devices are provided. Ferries are frequently overcrowded and lack basic safety equipment, and there have been a number of ferry sinkings resulting in significant loss of life. Customs Regulations: Indonesian customs authorities strictly regulate the import and export of items such as prescription medicines and foreign language materials or videotapes/discs. You should contact the Embassy of Indonesia in Washington or Indonesian consulates elsewhere in the United States for specific information about customs requirements. Transactions involving such products may be illegal, and bringing them back to the United States may result in forfeiture and/or fines.

Medical facilities and health information:


The general level of sanitation and health care in Indonesia is far below U.S. standards. Some routine medical care is available in all major cities, although most expatriates leave the country for all but the simplest medical procedures. Psychological and psychiatric services are limited throughout Indonesia. Medical procedures requiring hospitalization and/or medical evacuation to locations with acceptable medical care, such as Singapore, Australia, or the United States can cost thousands of dollars. Physicians and hospitals often expect immediate cash payment or sizable deposits before offering medical care. A non-exhaustive list of English-speaking doctors and hospitals is accessible via the U.S. Embassy Jakarta's website. Many places in Indonesia are inaccessible to the physically

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

Capital of Indonesia

Jakarta Daerah Khusus Ibu Kota Jakarta


Special Capital Territory of Jakarta Jakarta (/dkrt/), officially known as the Special Capital Territory of Jakarta (Indonesian: Daerah Khusus Ibu Kota Jakarta), is the capital and largest city of Indonesia. Located on the northwest coast of Java, Jakarta is the country's economic, cultural and political centre, and with a population of over 9,000,000, it is the most populous city in Indonesia and in Southeast Asia, and is the thirteenth-largest city in the world. The urban area, known as Jabodetabek, is the second largest in the world. Jakarta is listed as a global city in the 2008 Globalization and World Cities Study Group and Network (GaWC) research. and has an area of 661 square kilometres (255 sq mi) Established in the fourth century, the city became an important trading port for the Kingdom of Sunda. 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. The city is the seat of the ASEAN Secretariat. Jakarta is served by the Soekarno-Hatta International Airport, Halim Perdanakusuma International Airport, and Tanjung Priok Harbour; it is connected by several intercity and commuter railways, and served by several bus lines running on reserved busways

Culture
As the economic and political capital of Indonesia, Jakarta attracts many domestic immigrants who bring their various languages, dialects, foods and customs.

The Golden Snail (Keong Emas), established in 1970s during New Order era, is an IMAX theater located in Taman Mini Indonesia Indah, East Jakarta. 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 18th19th century. The Betawi people are mostly descended from various Southeast-Asian ethnic groups brought or attracted to Batavia to meet labor needs, and include people from different parts of Indonesia. The language and Betawi culture are distinct

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

Cuisine
Jakarta has a vast range of food available at hundreds of eating complexes located all over the city, from modest street-side foodstalls and traveling vendors to the high-class expensive restaurants. The traditional Padang restaurants and low-budget Javanese Warteg (Warung Tegal) foodstalls are ubiquitous in the capital. Next to a myriad of selections of Indonesian food and regional specialties from all over Indonesia, there is also international food, especially Chinese, Japanese, Korean, Thai, Indian, American, French, Middle Eastern, and modern fusion food. One of the most popular local dishes in Jakarta is Soto Betawi, which is a cow milk or coconut milk broth with beef tendons, intestines, tripe. The other popular foods include: kerak telor, gado-gado, sate, nasi goreng and kue cucur.

Economy, governance and infrastructure


Economy

Bank Indonesia headquarters. Jakarta's economy depends highly on service sectors, including financial, banking and trading sector. Jakarta's economy depends heavily on financial service, trade, and manufacturing. Industry includes electronics, automotive, chemicals, mechanical engineering and biomedical sciences manufacturing. The economic growth of Jakarta in 2007 was 6.44% up from 5.95% the previous year, with the growth in the transportation and communication (15.25%), construction (7.81%) and trade, hotel and restaurant sectors (6.88%). In 2007, GRP (Gross Regional Domestic Product) was Rp. 566 trillion (around $US 56 billion). The largest contributions to GDRP were by finance, ownership and business services (29%); trade, hotel and restaurant sector (20%), and manufacturing industry sector (16%). In 2007, the increase in per capita GRDP of DKI Jakarta inhabitants was 11.6% compared to the previous year[35]

Both GRDP by at current market price and GRDP by at 2000 constant price in 2007 for the Municipality of Central Jakarta (Jakarta Pusat), which was Rp 146 million rupiahs and Rp 81 million rupiahs, was higher than other municipalities in DKI Jakarta.

Tourism and landmarks

West Irian Liberation Statue, one of the many Sukarno era monuments in the city.

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

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

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, Jakarta Cathedral, and the Jakarta Central Post Office. It is about 4.5 hectares. Initially it was called Waterlooplein of Batavia and functioned as the ceremonial square during the Netherlands Indies colonial period. A number of colonial monuments and

memorials erected on the square during the colonial period were demolished during the Sukarno era. The most notable monument in the square is the Monumen Pembebasan Irian Barat (Monument of the Liberation of West Irian). During the 1970s and 1980s the park was used as a bus terminal. In 1993 the park was turned into a public space again. It has become a recreation place for people and is occasionally also used as an exhibition place or for other events. The Jakarta Flona (Flora dan Fauna), the flower and decoration plants and pet exhibition, is held in this park around August annually. Taman Mini Indonesia Indah (Miniature Park of Indonesia), in East Jakarta, has 10 mini parks. But the most popular is The Bird Park or Aviary

Spherical cage Bird Park in Taman Mini Indonesia Indah. Taman Suropati is located in Menteng city subdistrict in Central Jakarta. The park is surrounded by several Dutch colonial buildings. Taman Suropati was known as Burgemeester Bisschopplein during the Dutch colonial time. The park is circular shaped with a surface area of 16,322 m2. There are several modern statues in the park made by artists of the ASEAN countries, which contributes to the nickname of the park "Taman persahabatan seniman ASEAN" ("Park of the ASEAN artists friendship"). Also located in the Menteng area are the Taman Menteng and Situ Lembang pond parks. The Taman Menteng was built on the former Persija soccer Stadium. Taman Monas (Monas Park) or Taman Medan Merdeka (Medan Merdeka Park) is a huge square where the symbol of Jakarta, Monas or Monumen Nasional (National Monument) is located. The enormous space was created by Dutch Governor General Herman Willem Daendels (1810) and was originally named Koningsplein (Kings Square). On 10 January 1993, President Soeharto initiated action for the beautification of the square. Several features in the square are a deer park and 33 trees that represents the 33 provinces of Indonesia. In June 2011, Jakarta has only 10.5 percent Ruang Terbuka Hijau (Green Open Space) and will be added to 13.94 percent Public Green Open Space. Public Parks are include in Public Green Open Space. By 2030, the administration also hope there are 16 percent Private Green Open Space.

Transport
Jakarta is strained by transport problems. The city still suffers a lack of urban public transport services due to the prioritised development of road networks, which is mostly designed to accommodate private vehicles. Most trips, however, are undertaken by non-

motorized transport (particularly walking) and numerous modes of public or demandresponsive transportation services.

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. FSR is published biannually with the objectives:-To analyze potential risks confronting domestic financial system:- To recommend policies to relevant authorities for promoting a stable financial system; 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. Continual vulnerability in the international economy had a strong impact on the stability of the domestic financial system during the course of semester I. Sources of the recent susceptibility included international oil price fluctuations, the persistence of global imbalances, and the rising global interest rate. Besides, upward risk pressures, as a result of geopolitical tension and the stronger regional effect on domestic economy, triggered potential instability in the financial system. The supply and demand gap has been the root of the persistently high global oil. Despite the rapid growth in global oil consumption decelerating, persistently high demand coupled with short supply put upward pressure on the global oil price, which recently showed higher volatility. This was also spurred by geopolitical tension in Iran and Iraq and disturbances in oil production in Nigeria. Volatility in the oil price is likely to be more relentless than that of the oil price crisis in the 1970s. Escalation of the Middle East crisis and the persistently wide supply-demand gap in international markets will drastically amplify oil price expectations; forecast to reach USD100per barrel. The persistently high oil price in international markets placed growing pressures on global inflation which has tended to rise. This has driven tight-biased monetary policies in the vast majority of world economies, 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

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

financial institutions, nevertheless, the liquidity of banks remained in good shape despite the pressures. Despite the lower purchasing power, banks effectively maintained a secure level of liquidity position. This indicated that the level of customer savings was maintained attributable to attractive domestic interest rates for savings and time deposits. Conversely, perceived uncertainty surrounding business forced business players to postpone expansion whilst waiting for domestic interest rates to ease. This encouraged business players to retain their liquidity in time deposits as they expected an attractive pay off from the interest. The generally moderate risk exposure did not engender downward pressure on the profitability or capital of financial institutions. The risk pressures did not threaten financial system stability. The profitability of banks and financial institutions remained steady and their efficiency continued to improve. This development did not impose continuous pressures on capital adequacy in the financial system. The relatively high CAR of banks indicated that the level of stability is relatively sufficient. Financial system stability is also supported by the robustness of the payment system, which has been equipped to encounter operational disruptions via the installation of a Disaster Recovery Centre and, therefore, potential failures in the system can be sufficiently mitigated.

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, East Java, 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

Affairs (Kementerian Agama or Kemenag). In Indonesia, all citizens must undertake nine years of compulsory education, six years at elementary level and three in junior high school. Islamic schools are the responsibility of the Ministry of Religious Affairs. 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, consciousness, personality, intelligence, behaviour and creativity to him/herself, other citizens and for the nation. The constitution also notes that education in Indonesia is divided into two major parts, formal and non-formal. Formal education is divided again into three levels, primary, secondary and tertiary education. Schools in indonesia are run either by the government (negeri) or privately (swasta). Some private schools refer to themselves as "national plus schools" meaning that they go beyond the minimum government requirements, especially in relation to the use of English as medium of instruction or having an international curriculum instead of the national curriculum.

Entertainment in Indonesia
Entertainment in Indonesia is a combination of traditional, modern (local), and nonlocal. Traditional entertainment includes wayang (puppet show), commedians, and traditional dances. Local entertainment, I supose, is similar to entertainment in other countries but with local content. In music, for example, there are pop bands and singers, rock bands, country singers, jazz groups, rappers, you name it. Some are okey, and some are excellent. Famous Indonesian song writers are Titik Puspa, Guruh Sukarnoputra, Chandra Darusman, Rhoma Irama, Iwan Fals, and so on. (Check out the "Indonesian Music page".) There is also non-traditional music styles, but has a rich Indonesian flavor: kroncong, and dangdut. They use regular musical instruments. Dangdut is closer to Indian's (as in Asia's India, not North American's Indian) music. Non-local entertainment includes music and movies from outside Indonesia. For movies, Chinese Kung Fu or martial arts and India films are among the popular ones. I am sorry to say that current Indonesian movies are poor in quality (have low quality). They tend to be produced just to get quick dollars (or I should say Rupiah), not considering (or little consideration) the artistic or content aspect. Most of them have too much sexual content, with sexy titles. In my subjective opinion, the Indonesian movies were much better few years ago. Imported movies are either subtitled in Bahasa Indonesia or dubbed with Bahasa Indonesia. Indonesia houses everything on earth to keep its visitors enthralled and happy. Entertainment in Indonesia is a consolidation of traditional, modern (local), and non-local. The people coming here are never bored because of the myriad forms of entertainment here.

Entertainment in Indonesia is not only diversified but also colorful. The traditional entertainment here includes Wayang (puppet show), comedians, and traditional dances. The Wayang (Puppet Show) besides being a form of entertainment is also the bearer of Indonesian culture. These Indonesian puppet shows are regarded as one of the earliest forms of animation. The culture of Indonesia is reflected in the plays that act as a carrier of myth, morality play, and form of religious experience rolled into one. In music, for example, there are pop bands and singers, rock bands, country singers, jazz groups, rappers and many others. These music forms are entertaining and rejuvenating at the same time. The non-traditional music styles like kroncong, and dangdut has a rich Indonesian flavor: You can also entertain yourself by visiting the theater halls here. Indian films are widely batched and popular here. 21 Cineplex is one of the popular theatre halls here. Besides, there is the Chinese Kung Fu or martial art which is another form of entertainment. In Kuta, Sanur, Nusa Dua, 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. Dont miss the opportunity to watch extravagant and exotic traditional dances and dramas accompanied by the high-valued gamelan instruments in Indonesia. The dances and dramas and other cultural attractions are organized at many venues, mainly in the open-air. They also held in temples, incorporated in some of the munificent Balinese ceremonies. The hotels, bars, clubs and other nightspots houses modern entertainment.

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, sophisticated and well-paid private services such as finance and insurance, and millions of self-employed traders earning a marginal living in what is often called the informal sector. While there was little threat of privatizing the often inefficient government monopolies, the deregulation trend in the late 1980s encouraged more private participation in many services formerly reserved exclusively for the public sector. For example, a private airline--Sempati Air Services--was permitted for the first time to provide international jet service in competition with the government-owned airline, Garuda Indonesia, and the massive state-owned National Electric Company (PLN) began negotiations to purchase electricity from privately owned generators. In an archipelagic setting, transportation infrastructure is crucial to a modern integrated economy. The effort to boost non-oil exports also demanded more efficient transportation both among islands and to international ports. Repelita V (FY 1989-93) increased transportation investment to almost 20 percent of development expenditures from around 12 percent in Repelita IV. An extensive reform of shipping regulations increased competition and access to Indonesia's ports. Services provided 26 million jobs, about 35 percent of the employed work force in 1989. Growth in service employment was over 4 percent per year during the 1970s and 1980s, faster than total labor force growth, which averaged about 3 percent per year. One of the fastest growing sources of employment in services was the government civil service, which grew at a rate of almost 6 percent per year in these two decades. By 1990 there were

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

Roads and Highways

The total length of roads in 2004 reached about 340,000 km; out of which, 34,628 km were under the state responsibility; 649 km toll roads, 37,164 km under provincial responsibility; and the rest, 266,564 km under district responsibility. Of the total road length, 58 percent is paved. The national road network is in good condition with 95 percent paved and 81 percent in good and fair condition. The provincial road network is also predominantly in good or fair condition. The district rural and urban roads are only 50 percent in reasonable condition. Densely populated Java, with 7 percent of Indonesias land area and 62 percent of its population, accounts for 27 percent of the classified road network. At the other end of the spectrum, Maluku and Papua, with 23 percent of the land area and only 2 percent of population, account for 7 percent of the network. Indonesias first toll road was opened in 1978 and placed under the management of the state-owned toll road company, Jasa Marga which now has overall responsibility for some 515 km of toll roads. Around 460 km of which are on the island of Java. Since 1987, all proposed toll road projects have been required to be offered to private investors, and so far some 30 percent of the network in operation has been developed by private consortia. The number of motor vehicles registered by the State Police was 19 million in 1999 (excluded Timor Timur) and 27 million in 2003. The motor vehicles in 2003 consisted of 71 percent motorcycles, 13 percent passenger cars, 8 percent trucks, and 3 percent buses. Of the total 3.1 million motor vehicles assembled domestically about 90 percent were motorcycles.

Air Transport Air transport is rapidly increasing; not only, driven by the insufficient water and land transport networks, but also because travel by air is the quickest way to get around the country's thousands of islands, and for some areas, the only option. Indonesia has adopted the standards of the International Civil Aviation Organization with only minor variations, but the compliance with the standards is far from uniform. Indonesia's sudden air transport development became possible by the collapse of the Suharto regime in 1998. Before 1999, there were five scheduled carriers and a few charter operators. In 2004, there were 23 scheduled airlines operating and 37 licenses had been issued. Air transport is growing rapidly, with air travelers doubling every three years primarily driven by the low fares. In 2003, 16 million trips were taken, compared with 6.6 million in 1999. Conservatively, the Directorate General of Air Communication estimated in 20 million the seats sold in 2004, which is 7 million more than in 1997.

Inland Waterways There are more than 10,000 km of navigable waterways among 50 river systems. Over half of these rivers are in Kalimantan and the rest in Sumatra. These were originally used mainly for long-haul transport. Most of the vessels and terminals on the inland waterways system are owned and operated by the private sector. Some infrastructure improvements have been carried out, like the construction of new wharves, dredging of river channels at several river ports, and installation of navigational aids. However, because of the high seasonal variation in the water level of many rivers,

without further investment for improvement of crucial sections, the role of inland waterways is relatively minor, and limited to certain areas of Sumatra and Kalimantan.

Ports and Shipping Indonesia has some 300 public ports scattered over the archipelago. Of these, 43 are international liner service ports; the rest are feeder, and special ports, serving inter-island, 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).

The most important ports are Jakarta (Tanjung Priok), Surabaya, Semarang and Cirebon in Java; Belawan, Pandang, and Panjangon in Sumatra; Balikpapan, Banjarmasin, and Samarinda in Kalimantan; Ujung Pandang and Bitung in Sulawesi; Ambon in Maluku; and Sorong in Irian Jaya. Jakarta, Surabaya, Belawan, and Ujung Pandang, the four largest ports, handle most of Indonesias export and import cargoes, except for special commodities such as crude oil, logs, timber, rubber, palm oil, and fertilizer which use specialized ports. Much of the domestic traffic originates or is destined to these four ports. Inter-island shipping is the prevailing means for distributing goods through the ports in Indonesia. The cargo volume carried by inter-island shipping services reaches over 300 million tons, far exceeding international trade volume. It is estimated that inter-island shipping accounts for 60 percent of the total sea borne cargo movement in the country. Especially, for remote islands like Sulawesi and others, the percentages of cargoes carried by inter-island shipping are even higher. About 14 million passengers a year are traveling by inter-island shipping. In remote islands a higher percentage of the total number of passengers is traveling by inter-island transport means. There are two distinct types of inter-island shipping services: ferry, and shipping services. Ferries are generally point-to-point services offered over a relatively short distance, typically between adjacent islands, and use ro-ro vessels that carry a mix of passengers, cars, and trucks. Whereas, shipping services are offered on more complex routes, commonly use lift-on lift-off vessels, and are mostly dedicated cargo services.

Railways

Indonesia has four unconnected railway systems, one in Java, and three in Sumatra. The Java railways core passenger traffic is intercity with long distance services, such as Jakarta-Surabaya (820 km), and Jakarta-Yogyakarta (510 km); and medium distance services, such as Jakarta-Bandung (180 km), and Jakarta-Cirebon (200 km). The freight traffic moved by the Java railway consists mostly of petroleum fuel, fertilizer, cement, coal, and containers. The South Sumatra dominant traffic is coal, the West Sumatra railway carries mostly coal and cement, and the North Sumatra main traffic is crude palm oil. The total length of track in operation is 5,040 km of which Java is 3,700 km. The rail network is made of 1,067 mm gauge, and mostly singled tracked. Some sections in the Jakarta metropolitan region have been electrified to enable operation of suburban commuter services by electric railcars. The total fleet consists of 468 locomotives that include diesel electric and diesel hydraulic locomotives. The average fleet age is approximately 30 years old. Due to inadequate maintenance and lack of spare parts, the availability and reliability is low. Revenue contribution and traffic composition vary significantly among the four railway systems. The Java railway contributes about 75 percent of the Indonesian Railways revenues, with passenger transport accounting for 83 percent of the total. The South Sumatra Railway generates some 20 percent of total revenues, of which freight accounts for 90 percent. The West Sumatra and North Sumatra contribute only 2 percent and 3 percent of total revenues, of which freight accounts for 100 percent and 60 percent respectively. Urban Transport Before the 1997 crisis, major urban transport investments were undertaken. These included toll road developments involving public-private partnerships with significant local private investment. Many of these projects, which were implemented under Build, Operate, and Transfer (BOT) arrangements are located around the metropolitan cities in Java, such as Jakarta, Ciawi, Bogor, Cikampek, Karawang, Surabaya, and Malang.

Despite rapid infrastructure development in large urban areas, traffic congestion continues to hamper large cities like Jakarta, Bandung, Medan, Surabaya, and many satellite towns like Bogor, Bakasi, and Tangerang. Public transport, including buses, minibuses, and taxis, is commonly used despite poor public transport facilities. The city of Jakarta has implemented a Bus Rapid Transit system on several kilometers on key city route to help ease traffic congestion, particularly at peak times. Car ownership is increasing, following the liberalization of import motor vehicle rules. At least three million locally assembled motorcycles are added each year; transforming vehicular pollution in a serious problem for the largest cities, and a rapidly emerging one among the medium-size cities.

Rural Transport With more than 292,000 km, about 80 percent of the total length of the road network is presently under the responsibility of the local governments. Some 11 million people in remote communities remain without direct access to the all-season road network, and an additional 6 million people reported to lack any reliable connection to the motorized transport network. The process for identifying road network links to villages (desa) which are still not connected has not been clearly established

Indonesias Industrial Sector


Indonesia's industrial sector has not fully recovered from the blows of the Asian financial crises in 19971998, when the fall of the rupiah, from about 2,600 down to 17,000 to one US dollar, left 75% to 80% of its businesses technically bankrupt. Recovery to precrisis levels has been hindered by both internal and external disturbances, particularly after 2001, 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. The Indonesian government's Industrial Production Index showed a year on year ( yoy ) growth throughout 2000, peaking at a 14% increase in the first quarter of 2001. Year on year increases declined in second and third quarters, and then turned negative in the fourth quarter, reaching a -13% ( yoy ) decline in the second quarter of 2002. Smaller enterprises, reflected in the government's figures for nonoil manufacturing, have done better, maintaining a positive yoy growth rate, although one that has dropped steadily from a 7.5% ( yoy ) improvement in the first quarter of 2000 to less than 3% ( yoy ) in the second quarter of 2001. Overall, the US Central Intelligence Agency (CIA) estimates that the industrial production growth rate in 2001 was 3.1%. The leading industries by value are petroleum and natural gas; textiles, apparel and footwear; mining; cement; chemical fertilizers; plywood; rubber; food and tourism. Industrial expansion is given a high priority in development plans. Labor-intensive industries are stressed, together with industries producing consumer items for domestic consumption and export and products accelerating agricultural development. The government encourages industrial investors, particularly those who plan to export, to locate in one of its eight bonded zones (BZs), the Batam Industrial Park or free trade zone (FTZ) or in an exportprocessing zone (EPZ). The Batam Industrial Park, located on Batam Island in the Malacca Strait 20 km (12.5 mi) south of Jakarta, was designed to attract investment away from crowded Singapore. In the period January to November 2002, 80 foreign projects were licensed in Batam, up from 59 during the same period in 2001. In November 2002, however, Sony Electronics, Indonesia's largest industrial employer, 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. Outside of Batam, foreign investment approvals in 2002 dropped 23% compared to 2001 (from 1333 to 1028), and 35.4% in value (from about $15 billion to $9.7 billion). Approvals, which the Indonesian government reports regularly, are indicators of foreign investor confidence but they are not the same as the actual level of investment, which is much lower. Domestic investment projects also declined in both number and value in 2002 compared to 2001, down 31.5% to 181 projects, and down 57% to R P 25,262 billion (about $11.2 billion in purchasing power parity terms). 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. Political uncertainties, insecurities about the new decentralized tax regime and worsening labor relations were cited as the main factors holding back foreign investment. Industries which process Indonesia's abundance of natural resources include those based on petroleum, wood, sugar, rubber, tea, coconuts, palm kernels, sisal, kapok, rice, and

cassava. Manufactured products include consumer goods such as tires and tubes, rubber shoes, radios, batteries, soap, margarine, cigarettes, light bulbs, textiles, glass, paper, tractors, and trucks. Other industries established in recent decades include the Krakatau Steel Industrial Estate at Cilegon (in northwest Java), plywood factories, cement works, spinning mills, knitting plants, iron works, copper and other foundries, a ceramics plant, a leathergoods plant, and a glass factory, and the manufacture of petrochemicals and urea fertilizers, as well as, most ambitiously, facilities for automobile assembly, shipbuilding and aircraft manufacture. The Asian financial crisis doomed ambitions for the mass production of passenger airplanes, as well as a "national car," the Timor. 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, and which sought to market the Timor as the "national car, " although in fact it was made mostly in Korea. Nepotism and corruption were also charged against the project as Pres. Suharto put his youngest son, Huotomo or "Tommy," at its head. The Asian financial crisis of 199798 swept most vestiges of the project away, aided by a WTO ruling calling for the elimination of the program's special tax, customs, and credit privileges issued by a WTO panel called for on the eve of the crisis by Japan (17 April 1997), the European Union (12 May 1997), and the United States (12 June 1997), and issued in April 1998. In the meantime, 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. From World War II until the 1990s, overall industrial growth was small with agriculture the dominant sector of the Indonesian economy. However, in the 1990s, industry and services took over as the dominant sectors, respectively contributing about 41% and 42% of the GDP, with agriculture falling to 17%. Although the government has put an emphasis on developing labor-intensive industries, industry accounts for only for 16% of employment, compared to a 45% share for agriculture and 39% for services. In 1991, textiles were the key industrial export, accounting for 47% of the total. In 2001 textiles and garments were technically still the leading industrial export, but only accounted for 13.6% of total export earnings. The value of textiles exports was down 15% from 2000, due mainly to the global economic slowdown, and was predicted to drop another 10% in 2002. Textiles remains characterized by small producers, with more than 1200 registered textile companies in Indonesia, employing more than a million workers. The petroleum refining industry has not grown significantly over the last decade. In 1992, Indonesia had six refineries, all operated by Pertamina, the state oil company. Production of refined products was 572.8 million barrels, which is 38% higher than the annual production from Indonesia's now eight state-owned refineries in 2001, operating at 96% capacity. Statistics on refined petroleum products consumption are questionable because of considerable smuggling out of Indonesia to escape its price controls. Oil products subsidies are scheduled to be phased out by 2004. The government has issued several licenses to foreign investors to build refineries, but as of 2002, only one has reached the construction phase. Coal production reached 70 million tons per year by 1999. In 2001 production was 92.5 million tons with 65.3 million tons exported, and was on track for production of over 100 million tons. and exports of 70 million tons. in 2002. The regulation and licensing of the coal industry in Indonesia, which currently includes 33 producing companies, was decentralized in legislation that went into effect in 2001.

The steel industry in Indonesia basically consists of one large integrated mill, the PT Krakatau Steel complex plus numerous mini mills that use scrap steel as their raw material input. In 1992 steel billet production was 560,000 tons. In 2000, total steel billet capacity was 2.34 million tons across 11 companies, but the plants were only running at 60% capacity. In the Asian financial crisis, Indonesia's total steel production dropped from 7.3 million tons in 1997 to 2.7 million tons in 1998 as domestic demand collapsed. The industry was able to survive through exports, although facing stiff competition from its regional neighbors, Eastern Europe and Latin America, particularly. What recovery had been achieved in 2000, however, was cut off abruptly in 2001 when the United States, its biggest customer, placed dumping duties on Indonesian steel. Indonesia produces nitrogen, phosphate and potash fertilizers, but the strongest prospects are for the urea industry because of Indonesia's natural gas deposits. In 2001, urea production was6.954 million tons, above the total fertilizer production for 1992, which was 6.5 million tons. Prospects are good for an export market in urea, but in 2002 most fertilizer output was for domestic consumption, and plants, many of them state-owned, were running at near 100% capacity, and fertilizer formed less than 1% of exports. Wood and wood products have traditionally been Indonesia's second-largest industrial export group, accounting for 11% or 12% of total export value, though electronic some times claims a larger share. 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, is the cause of international controversy because of the rapid deforestation involved. Global Forest Watch estimates that forest cover has declined from 162 million hectares to 98 million hectares (39.5%) from 1995 to 2000. Laws are in place to curb the rate of exploitation, but it is estimated that over half of the logging done is illegally. In 2001 consumption of plywood was 13 million cu m and the total consumption of logs was 26 million cu m. Wood products, pulp, paper, and paper products, are Indonesia's second-largest sector of industrial exports. The chemical industry experienced an annual growth rate of 13% prior to 1993; and after 1997, the depreciation of the currency encouraged chemical production for the export market. In the consumer goods manufacturing sector, activities are run primarily by private enterprise. All oil and natural gas processing have historically been controlled by government enterprises, as have been other major heavy industries, such as basic metals, cement, paper products, fertilizer, and transport equipment. After the recession in 1998, the government proposed liberalizing heavy industry. Of the 168 parastatals, 140 were scheduled for privatization. During the 1990s, Indonesia's eight oil refineries, all owned by the state company Pertamina, produced about one million barrels of refined petroleum per day, contributing 9% of the GDP in 1999. In 1997, the fuel sector contributed about 20% to Indonesia's foreign exchange earnings and a waning amount of government tax revenues. Prior to 1997, these sectors accounted for nearly 80% of exports and 70% of government revenues. Natural gas production has steadily increased, and may take over from petroleum as a major source of export revenue. Natural gas proven reserves will last 40 years at current production rates, which reached 180,000 barrels per day in 1999. In July 1992 non-tariff barriers were reduced and key industries were deregulated to allow free importation of essential manufacturing inputs. There is a shortage of skilled technical personnel to support high-tech industries; most technology has been imported through joint ventures. The agency for Strategic Industries (BPIS), a state-owned holding

company including aircraft, telecommunications and high-technology industries, formed a joint venture with a major foreign multinational technology corporation to promote technology transfer to Indonesia. Most industrial enterprises were negatively affected by the 1998 recession, with an overall decline of at least 15%. The Indonesian Bank Restructuring Agency (IBRA) took over the majority of Indonesia's non-performing industrial assets in 2000 with plans to sell, including: cement factories, mining facilities, manufacturing plants, food processing firms, plywood production plants, vehicle assembly lines, chemical plants, property, and agribusinesses

Exports and Trade


Indonesia's exports were $158 billion in 2010, a rise of 35% from $116.5 billion in 2009. The largest export commodities for 2010 were oil and gas (17.8%), minerals (14.9%), textile and footwear (8.9%), crude palm oil (8.54%), electrical appliances (8.2%), and rubber products (4.7%). The top destinations for exports for 2010 were Japan (16.3%), China (11.6%), the U.S. (11.1%), Singapore (8.5%), and Korea (8.3%). Meanwhile, total imports in 2010 were $136 billion, up from $96.83 billion in 2009. Indonesia is currently our 28thlargest goods trading partner with $23.4 billion in total (two-way) goods trade during 2010. The U.S. trade deficit with Indonesia totaled $9.5 billion in 2010 ($6.9 billion in exports versus $16.5 billion in imports). Exports - commodities: oil and gas, electrical appliances, plywood, textiles, rubber

Imports
Indonesian imports from the U.S. rose 0.8% to $3.1 billion in 2006, up 20.4% since 2002. In terms of the merchandise flow between the two countries, Americas trade deficit with Indonesia was $10.3 billion in 2006, up 31.4% from 2002. The U.S. trade deficit with Indonesia increased 15.2% in 2006 up from the 10.1% deficit increase in 2005 from the year earlier.

Tsunami in Indonesia 2009


A powerful earthquake struck waters off eastern Indonesia early Thursday, briefly triggering fears of a tsunami, the local geological agency said. It was not immediately clear if there were injuries or damage.

The U.S. Geological Survey said the 7.0-magnitude quake was centered 195 miles from Manado, the northernmost city on Sulawesi island. It said it had a depth of about 20 miles beneath the ocean floor. The quake was followed by two aftershocks, one measuring magnitude 5.9 and the other 5.6, the USGS said. One Manado resident, Grace Wakary, said she did not feel anything and there were no visible signs of panic. The country's local geological agency initially told reporters that the quake had the power to trigger a tsunami, but lifted the alert about an hour later.The Pacific Tsunami Warning Center said that a pacific-wide tsunami that would threaten Hawaii was not expected.Earthquakes of this size can generate local tsunamis that could be destructive along coasts located within 62 miles of the epicenter.Indonesia is prone to seismic upheaval due to its location on the so-called Pacific "Ring of Fire," an arc of volcanos and fault lines encircling the Pacific Basin. In December 2004, 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 230,000 people more than half of them in Indonesia's Aceh province alone. A tsunami off Java island in 2007 killed nearly 5,000.

GDP of Indonesia

$706.56 Billion US dollars at current prices

Financial statement
Domestic economic performance improved during 2010 amid a multi speed global economic recovery. This was reflected by robust GDP growth, a large balance of payments surplus and improved financial sector performance. Underpinned by such strong fundamentals and positive perceptions concerning the Indonesian economy, the rupiah exchange rate strengthened with low volatility. In terms of prices, up to the middle of 2010 infltion was well controlled. However, the intensity of supplyside disruptions during the second half of the reporting year, in particular food items, heightened inflationary pressures that pushed inflation above its target. Despite improved economic performance, the domestic economy remained facing a number of key challenges that consists of massive foreign capital inflows, excess liquidity in banking system, rising inflation as well as several problems in the banking sector and impediments in the real sector. These challenges left Bank Indonesia facing a trilemma, namely maintaining price stability, exchange rate stability and financial system stability. Therefore, relying on merely one policy instrument was insufficient, and a policy mix was required. In 2010 Bank Indonesia instituted a policy mix to ensure internal and external stability. The mix of instruments used for internal stability aimed at stabilising prices and managing domestic demand, while external stability aimed at the management of foreign capital inflows and exchange rate stability. Referring to interest rate policy, in 2010 Bank Indonesia held its BI Rate at a level of 6.5%. Meanwhile, in addition to the interest rate policy, in the middle of 2010 Bank Indonesia issued macroprudential policy for managing domestic liquidity and the surge in foreign capital inflows. This policy mix was further supported by other policies to maintain financial system stability as well as government policies.
Budget: revenues: $119.5 billion Expenditures: $132.9 billion (2011 est.)

Cost of Living in Indonesia GDP - per capita (PPP): $4,200 (2010 est.) $4,000 (2009 est.) $3,900 (2008 est.)

Reasonable cost of living


As an EF teacher in Indonesia, you will be surprised at how far your money can go! The cost of living in Indonesia is very reasonable, especially if you are interested in experiencing the culture as a true insider.

Many EF teachers in Indonesia enjoy the option of sharing a house or apartment with other EF teachers to split the cost. If you eat local food from local restaurants or food stalls and shop in local markets, you can cut even more cost and end up with a fatter wallet.

Lower living cost, 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. EF teachers make a great living by local standards and they often tell us that their salary offers them a great quality of life. With your salary you can afford a lifestyle that you did not think possible back home: eat-out and take taxis, go to the spa, fly to Bali for the weekend.

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-$2.50 Starbuck's coffee: $2.50 Paperback book: $0.90-$1.50 Pre paid cell phone card: $1-$5 Nasi Goreng (Fried Rice): $0.70 Soft drink (cola etc): $0.30 Bintang beer: $0.75 Heineken beer: $1.50 Fresh fruit: $0.20-$1.50 Local brand toiletries: $1.50-$2.50 A package of instant noodles: $0.15 Refill bottled water (1gallon): $0.90

Cost Of Living
The cost of living in Jakarta in Indonesia is high compared to other places. The overall cost of living is determined using the prices for defined quantities of the same goods and services across 13 Basket Groups. Jakarta in Indonesia is currently ranked 198 overall out of 950 places (rank 1 is most expensive: rank 950 is least expensive). 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, alcohol at a bar, beer, locally produced spirit, whiskey, and wine (where alcohol is legally sold) as well as for tobacco products such as cigarettes. There are 12 places that are more expensive, and 937 places that are less expensive for alcohol and or tobacco. Clothing costs are low compared to other places for items such as clothing and footwear products, business suits, casual clothing, childrens clothing and footwear, coats and hats,

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

Recreation and Culture costs are high compared to other places for items such as books, camera film, cinema tickets, DVDs and CDs, sports goods, and theatre tickets. There are 207 places that are more expensive, and 742 places that are less expensive for recreation and culture. Restaurants, Meals Out and Hotel costs are low compared to other places for items such as a business dinner, dinner at a restaurant (non fast food), hotel rates, take away drinks and snacks (fast food). There are 689 places that are more expensive, and 260 places that are less expensive for restaurants, meals out and hotels. Transport costs are high compared to other places for items such as public transport, vehicle costs, vehicle fuel, vehicle insurance and vehicle maintenance, hire purchase / lease of vehicle, petrol / diesel, public transport service maintenance, tires, vehicle Insurance, and vehicle purchase. There are 292 places that are more expensive, and 657 places that are less expensive for transport. Personalized cost of living indexes for Jakarta in Indonesia are based on the basket groups and comparison location(s) selected in the Calculators. In terms of the hardship people are likely to experience, assessed in global terms, Jakarta in Indonesia is ranked as high degree of hardship with a hardship index of 30%.

Indonesia being a part of SAARC, European Union, NAFTA, ASEAN


Indonesia is not a part of SAARC The European Union considers Indonesia a priority country, given its size, its geopolitical importance and its role in the fight against the effects of climate change. Over the past few years, the EU and Indonesia have intensified their partnership. The political dialogue is undertaken through annual Ministerial meetings and through regular Senior Officials Meetings, the most recent of which took place in September 2008 in Brussels. The EU is Indonesia's 4th largest trading partner, representing more than 10% of its total external trade. EU cooperation with Indonesia dates back to the 1970s. This cooperation was formalised under the 1980 EC-ASEAN Agreement. The EU Delegation in Indonesia was opened in 1988. 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".

NAFTA having members as Canada; Mexico; United States, it doesnt consist on Indonesia Since its founding on August 8, 1967, ASEAN has been a major focus of Indonesia's regional international relations. In ASEAN Indonesia, together with Brunei, Malaysia, the Philippines, Singapore, and Thailand, helped construct a regional multinational framework to facilitate economic cooperation, diminish intra-ASEAN conflict, and formulate ASEAN positions regarding perceived potential external threats. 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 started selling products from their own production facilities in 2000 and have experienced rapid growth since 2006. With their six branch offices around Indonesia, they have come to establish themselves as the number one in Indonesia within the marine and protective coating market, each with a market share of more than 30 percent. 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. They have of course met several challenges on their way to success. Staying true to their values (loyalty, 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. Jotun has experienced many situations dealing with this issue. The most common situation is kickbacks to the customers employees. Jotun follows the saying It is ok to walk away from projects if it cannot be won in fair competition. This has helped them to succeed in Indonesia. Their strong beliefs in playing fair and their ability to leave contracts that cant be achieved without using corruption, has given them a lot of respect. This strength has enabled them to reach the strong position they hold today. Their way of fighting corruption is education. They teach employees how to deal with corruptive issues and that articipating in such deals are not accepted. As corruption has been a part of the everyday life ever since the colonization, the Indonesian workers dont necessarily see it as a problem. By teaching them not to contribute to corruption they have built an environment where everyone is strongly aware of the non-corruption policies. To remember what is legal or not, they have designed a decision-making model card where all things that are unacceptable to Jotun as a company are listed.

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

all these issues, however infrastructure is at a critical point, and needs a boost not to put a cap on investment opportunities. Anti-Corruption efforts in Indonesia are rapidly increasing in range and intensity with the free-spoken media in the lead. Our conclusion is clear. With Indonesias enormous natural recourses, cheap labour and growing middle class the potential is exceptional. Despite of the challenges the country is something every investor should consider. The challenges can be handled and the opportunities are too big to neglect. Indonesia is definitely a country we would recommend for your future investments. Our report has limitations. We have only been in Indonesia for a limited period of time. Our studies have taken place in Norway before the field studies and during three weeks in Indonesia. The main part of our research has taken place in the Jakarta area. Due to this, our report might not reflect all regions of the country accurately enough. However, 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. Another limitation with our research is that we visited a limited number of companies. This may cause the report to be too one-sided. We have tried to balance our visits with two Indonesian companies, three Norwegian companies, the royal Norwegian embassy, the Indonesian Chamber of Commerce and Industry and the European Chamber of Commerce. We have also talked to locals and expatriates in more informal settings and to our best ability tried to understand the Indonesian history, culture and way of thinking.

Banking Sector
Indonesia has 120 commercial banks (October 2011), of which 10 are majority foreign-owned and 28 are foreign joint venture banks while the number of bank branches has continuously increased from 6,397 in 2000 to 14,510 in 2011. The top 10 banks control about 62.4% of assets in the sector. Four state-owned banks (Bank Mandiri, BNI, BRI, BTN) control about 34.8% of assets (September 2011). The Indonesian central bank, Bank Indonesia (BI), announced plans in January 2005 to strengthen the banking sector by encouraging consolidation and improving prudential banking and supervision. BI hoped to encourage small banks with less than Rp 100 billion (about U.S. $11 million) in capital to either raise more capital or merge with healthier "anchor banks" before end-2010, announcing the criteria for anchor banks in July 2005. In October 2006, BI announced a single presence policy to further prompt consolidation. The policy stipulated that a single party could own a controlling interest in only one banking organization; exceptions would be granted in controlling two banks that do business under different principles, such as commercial and sharia, or one of which is a joint venture bank. Controlling interest is defined as 25% or more of total outstanding shares or having direct or indirect control of the institution. BI has started to move toward Basel II standards in 2011, 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. The IBA is a joint effort between BI, the Capital Market and Financial Institution Supervisory Board (BAPEPAM-LK), and the Ministry of Finance that was launched in 2004. A cornerstone program of the IBA is the

structural reinforcement of the national banking system, aimed at building stronger capitalization for commercial banks to underpin its expansion and accelerate the required consolidation process among Indonesias 120+ banks. Another important banking sector reform was the decision to eliminate the blanket guarantee on bank third-party liabilities. 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, LPS) in March 2007. The removal of the blanket guarantee did not produce significant deposit outflows from or among Indonesian banks. Sharia banking has grown in Indonesia in recent years, but represented only 3.7% of the banking sector, about $14.4 billion in assets as of October 2011. In October 2011, Indonesia has a new regulator to oversee a growing financial industry. The new regulator, Financial Services Supervisory Authority (OJK), will take over the supervision of banks, brokerages and insurance firms from the central bank (BI) and the capital market watchdog BAPEPAM-LK. By early 2013, OJK will have the power to supervise capital markets and non-banking institutions, while the oversight of commercial banks will start from 2014.

Conclusion and Recommendation


Although income or expenditure level as a poverty indicator appears relevant conceptually, the practical use is limited by its reliability, cost effectiveness, timeliness, and comparability across countries. 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. Prompted by the need for an alternative indicator for ADB rural development project, the paper evaluates the possibility of introducing child malnutrition as an alternative poverty indicator to the commonly used income indicator. 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. Empirical studies show that child malnutrition is closely linked to income level, the widely used poverty indicator. A study also shows that child malnutrition is reflective and indicative of other desirable development outcomes i.e. gender equality, intra-household distribution, and health environment quality. 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, which generally target this section of the population. On the basis of accuracy, anthropometric measurement, i.e. measuring weight and height of children using objective tools, is far more accurate than collecting information on income and/or expenditures based on recall during a survey, particularly in the context of rural households in a subsistence economy. Measurements of child malnutrition do not need to be adjusted for inflation and so are not constrained by any inadequacy of price data. On the basis of cost effectiveness and timeliness of data collection, 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, because the concept of using child nutrition as a poverty indicator is relatively new, data availability across the globe is still limited. Using Indonesia

as the case to explore the possibility of adopting child malnutrition as a poverty indicator for ADB agriculture and rural development projects, 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. For development interventions where the expected poverty impacts are expected to be manifest in the medium or long-term, it is highly feasible to adopt child malnutrition as a poverty indicator. Since baseline information and information on subsequent years are available through secondary sources, change in childrens nutritional status can easily be tracked. However, for short-term intervention projects, 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. While child malnutrition could not universally be adopted as a poverty indicator at this point of time due to lack of universally available data, it's strength and relevance as a poverty indicator, particularly for monitoring poverty impacts on the low income population, is gradually being recognized by governments and international agencies around the globe. 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. With this growing awareness, it is expected that it will be widely adopted by all governments in the near future. 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, it is recommended that child malnutrition be included as one of the millennium development goal indicators. Indonesia's commitment to multilateralism has been confirmed by its active participation in WTO negotiations, as well as its timely implementation of Uruguay Round obligations and additional WTO and Association of Southeast Asian Nations (ASEAN) commitments. Indonesia fully implemented the final stage of its commitments under the ASEAN Free Trade Agreement on schedule on 1 January 2002. The country has, however, 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. Trade liberalization and other structural reforms undertaken by Indonesia have successfully stabilized the economy and fostered growth. But the economy remains fragile and the recent global downturn has heavily reduced foreign investment on which the economy critically depends.

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. Dcosta. The information submitted is true and original to the best of my knowledge. I would like to express my gratitude to all those who gave me the possibility to complete this project. I would like to specially thank Prof. Dcosta for encouraging me and being my guardian for this project and giving me the scope to make this project.

Bibliography
www.google.com www.wikipedia.com

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