COUNTRY PROFILE

IndonesiaOur quarterly Country Report on Indonesia analyses currenttrends. This annual Country Profile provides politicalbackground and economic information.

1998-99The Economist Intelligence Unit15 Regent Street, London SW1Y 4LRUnited Kingdom

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Copyright 1998 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited.

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ISSN 0269-5375

Comparative economic indicators, 1997

0 200 400 600 800 1,000

China

South Korea

Taiwan

Indonesia

Hong Kong

Thailand

Malaysia

Singapore

Philippines

Vietnam

Gross domestic product$ bn

Sources: EIU estimates; national sources.

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Singapore

Hong Kong

Taiwan

South Korea

Malaysia

Thailand

Philippines

Indonesia

China

Vietnam

Gross domestic product per head$ '000

Sources: EIU estimates; national sources.

-2 0 2 4 6 8 10

China

Vietnam

Malaysia

Singapore

Taiwan

South Korea

Hong Kong

Philippines

Indonesia

Thailand

Gross domestic product% change, year on year

Sources: EIU estimates; national sources.

0 1 2 3 4 5 6 7 8

Indonesia

Hong Kong

Thailand

Philippines

South Korea

Vietnam

China

Malaysia

Singapore

Taiwan

Consumer prices% change, year on year

Sources: EIU estimates; national sources.

EIU Country Profile 1998-99 The Economist Intelligence Unit Limited 1998

November 27th 1998 Contents

3 Basic data

4 Political background4 Historical background7 Constitution and institutions8 Political forces

11 International relations and defence

12 The economy12 Economic structure13 Economic policy18 Economic performance20 Regional trends

21 Resources21 Population22 Education23 Health23 Natural resources and the environment

24 Economic infrastructure24 Transport and communications26 Energy provision28 Financial services32 Other services

33 Production33 Industry35 Mining and semi-processing36 Agriculture, forestry and fishing39 Construction

39 The external sector39 Merchandise trade42 Invisibles and the current account42 Capital flows and foreign debt45 Foreign reserves and the exchange rate

46 Appendices46 Sources of information48 Reference tables48 Government finances49 Money supply and credit49 Interest rates49 Gross domestic product50 Gross domestic product by expenditure50 Gross domestic product by sector

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The Economist Intelligence Unit Limited 1998 EIU Country Profile 1998-99

51 Prices51 Wage rates by sector52 Employed labour force, 199552 Population53 Geographical distribution of population by province54 Transport statistics54 National energy statistics55 Banking statistics56 Stock-market indicators56 Manufacturing production56 Minerals production57 Agricultural production57 Houses built by Perumnas58 Exports58 Imports59 Key exports59 Key exports60 Imports by main commodity group60 Main trading partners61 Balance of payments, IMF estimates62 Balance of payments, national estimates62 External debt, World Bank estimates63 Net official development assistance63 Foreign reserves63 Exchange rates

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EIU Country Profile 1998-99 The Economist Intelligence Unit Limited 1998

Indonesia

Basic data

Land area 1,919,317 sq km

Sea area (exclusive zone) 3,166,163 sq km

Total area 5,085,606 sq km

Population 201.4m (mid-1997 estimate)

Main towns Population in 000, 1990 census

Jakarta (capital) 8,228 Medan 1,730Surabaya 2,484 Semarang 1,251Bandung 2,058 Palembang 1,144

Climate Tropical

Weather in Jakarta(altitude 8 metres)

Hottest months, April-May, 24-31oC (average daily minimum and maximum);coldest months, January-February, 23-29oC; wettest months, January-February,300 mm average rainfall

Languages Indonesian (Bahasa Indonesia), as well as some 250 other regional languagesand dialects. English has increasingly replaced Dutch as the main second lan-guage, and is widely spoken in government and business circles

Measures Metric system

Currency Rupiah (Rp). Exchange rates (1997 averages): Rp2,909:$1. Exchange rate end-November 1998: Rp7,490:$1

Time Western Zone 7 hours ahead of GMT, Central Zone 8 hours ahead, EasternZone 9 hours ahead

Fiscal year April 1st-March 31st

Public holidays New Year, January 1st; Independence Day, August 17th; Christmas, December25th. Other movable holidays: Nyepi, Easter, Miraj, Ascension Day, Waisak,Eid al-Fitr, Eid ul-Adha, Islamic New Year, Maulud

Indonesia: Basic data 3

The Economist Intelligence Unit Limited 1998 EIU Country Profile 1998-99

Political background

The Republic of Indonesia is formally a constitutional democracy with a strongexecutive presidency. More than 32 years after coming to power in the wake ofa coup, President Suharto, amid mounting economic troubles, resigned officein May 1998 after losing both popular and elite support. He was succeeded byhis vice-president, B J Habibie. Mr Habibie has promised to hold parliamentaryelections in June 1999, to be followed by a presidential election by the end ofthe year. He also took some immediate steps to open the political system.However, by late 1998 Mr Habibies own lack of popular support and hisgovernments apparent inability to tackle the countrys massive economicproblems were creating pressures for faster political change.

Historical background

Pre-colonial history The territorial extent of the Republic of Indonesia is defined principally by theboundaries of the former Dutch colonial empire in South-east Asia. The territo-ries now comprising the country had never constituted a single political entitybefore the establishment of Dutch colonial rule, and their pre-colonial historywas marked by the rise and fall of a number of important empires and king-doms. Close commercial and cultural ties existed with India before the 16thcentury, as a result of which the most important Indonesian empires duringthis period were based on Hindu and Buddhist beliefs and practices. The cul-tural influence of this Hindu-Buddhist past remains strong in many parts ofIndonesia. The introduction of Islam in the 13th century was followed by theIslamisation of much of the archipelago.

European colonisation European interest in Indonesia arose out of the quest for spices in the 15th and16th centuries. The founding of the Dutch East India Company (VereenigdeOostindische Compagnie, VOC) in 1602 set the scene for the gradual estab-lishment of Dutch colonial rule in Indonesia. In 1799 the Dutch state took overthe interests of the VOC and embarked on an extended period of territorialconquest, which continued until the early years of the 20th century.

Nationalism andindependence

In the early 1900s a pan-Indonesian nationalism began to emerge within thegrowing ranks of modern educated urban intellectuals. The Japanese conquestof the Dutch East Indies in 1942 and the subsequent defeat of Japan enabledthese nationalists, under the leadership of Sukarno and Mohammad Hatta, toproclaim Indonesias independence on August 17th 1