Economy of Indonesia
Overview
Indonesia, a vast polyglot nation, has been undergoing significant economic reforms under President YUDHOYONO. Indonesia's debt-to-GDP ratio has been declining steadily, its foreign exchange reserves are at an all-time high of over $50 billion, and its stock market has been one of the three best performers in the world in 2006 and 2007, as global investors sought out higher returns in emerging markets. The government has introduced significant reforms in the financial sector, including tax and customs reforms, the introduction of Treasury bills, and improved capital market supervision.
Indonesia's new investment law, passed in March 2007, seeks to address some of the concerns of foreign and domestic investors. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. Indonesia has been slow to privatize over 100 state-owned enterprises, several of which have monopolies in key sectors. The non-bank financial sector, including pension funds and insurance, remains weak. Capital markets are underdeveloped. The high global price of oil in 2007 increased the cost of domestic fuel and electricity subsidies, and are contributing to concerns about higher food prices. Located on the Pacific "Ring of Fire" Indonesia remains vulnerable to volcanic and tectonic disasters.
Significant progress has been made in rebuilding Aceh after the devastating December 2004 tsunami, and the province now shows more economic activity than before the disaster. Unfortunately, Indonesia suffered new disasters in 2006 and early 2007 including: a major earthquake near Yogyakarta, an industrial accident in Sidoarjo, East Java that created a "mud volcano," a tsunami in South Java, and major flooding in Jakarta, all of which caused additional damages in the billions of dollars. Donors are assisting Indonesia with its disaster mitigation and early warning efforts.
GDP
Real Growth Rate
6%
Per Capita
USD 3,400
From Agriculture
12%
From Industry
48%
From Services
40%
Labour Force
Available for Work
108
Working in Agriculture
43%
Working in Industry
18%
Working in Services
39%
Unemployment Rate
10%
Population Below Poverty Line
18%
Inflation Rate
6%
Investment as Percent of GDP
24%
Budget
Revenues
USD 88,210 (m)
Expenditures
USD 95,410 (m)
Public Debt
US$ 0.00 (m)
Agricultural Products
Rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, copra; poultry, beef, pork, eggs
Core Industries
Petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food, tourism
Exports
Value
USD 118,400 (m)
Commodities
Oil and gas, electrical appliances, plywood, textiles, rubber
Partners
Japan 19.4%, Singapore 11.8%, US 11.5%, China 7.7%, South Korea 6.4%, Taiwan 4.2% (2006)
Imports
Value
USD 86,240 (m)
Commodities
Machinery and equipment, chemicals, fuels, foodstuffs
Partners
Singapore 29.6%, China 11.2%, Japan 8.8%, South Korea 5.3%, Malaysia 4.8% (2006)
External Debt
USD 137,200 (m)
Fiscal Year
Calendar year
