[136] India also has further economic ties with Indonesia through its free trade agreement with ASEAN, of which Indonesia is a member. 18 of them lived in Jakarta and the others spread among other large cities in Indonesia. Inside the ASEAN-region, Indonesia ranks fourth in terms of total trade. However, the sector has significant challenges, including intense international competition, particularly from China, increasing labour costs, high transportation and logistics costs, difficulties getting credit, and varying levels of transparency and clarity in regulations.

As of 2005, crude oil and condensate output were 1.07 million barrels (170,000m3) per day. The main exports were construction equipment, machinery, aviation parts, chemicals, and agricultural products. Fifty domestic and foreign conglomerations held around 70.5%. With the $512 billion economy expanded 4.4% in the first quarter from a year earlier and last month, the IMF revised its 2009 Indonesia forecast to 34% from 2.5%. The 1997 Asian financial crisis that began to affect Indonesia became an economic and political crisis. Indonesia enjoyed stronger fundamentals with the authorities implemented wide-ranging economic and financial reforms, including a rapid reduction in public and external debt, strengthening of corporate and banking sector balance sheets and reducing bank vulnerabilities through higher capitalization and better supervision. [121][122][123] China is also Indonesia's most important source of imports, reaching US$30.8 billion, or 22.7% of Indonesian imports in 2016.

Development in Sumatra and in the outer islands is less intensive and consists primarily of estate-raised cash crops. Indonesia mostly exports to the EU agricultural products and processed resources, mainly palm oil, fuels and mining products, textiles and furniture.

The aim was to encourage increased investment, particularly in infrastructure projects across Indonesia. [171][172][173], Economic disparity and the flow of natural resource profits to Jakarta has led to discontent and even contributed to separatist movements in areas such as Aceh and Papua. The government subsequently inaugurated a four-year national development plan that helped return the economy to its precrisis strength. [52] It returned to the 8,000/USD1 range at the end of 1998 and has generally traded in the Rp 8,00010,000/USD1 range ever since, with fluctuations that are relatively predictable and gradual. [178] Even though the economy recovered very quickly during the first decade of the New Order administration (19701981), never once was the inflation less than 10% annually. Within the World Bank's Doing Business Survey,[143] Indonesia rose to 122 out of 178 countries in 2010, from 129 in the previous year. However, since the 1990s, the majority of the economy has been controlled by individual Indonesians and foreign companies. For purchasing power parity comparisons, the exchange rate for 1 US dollar is set at 3,094.57 rupiah. In 2019, as Indonesia's share of global trade exceeded 0.5 percent, the United States Trade Representatives decided not to classify Indonesia as a "developing country. Single market will also include the ASEAN Single Aviation Market (ASEAN-SAM), the region's aviation policy geared towards the development of a unified and single aviation market in Southeast Asia. Indonesia is the world's largest tin market. [84], Two US firms operate three copper/gold mines in Indonesia, with a Canadian and British firm holding significant other investments in nickel and gold, respectively. Nearly all commodity production comes from large estates. [36], Indonesia is predicted to be the 4th largest economy in the world by 2045.

Since then, the annual growth rate has fluctuated around 5%. [156], National net wealth, also known as national net worth, is the total sum of the value of a nation's assets minus its liabilities. Prior to that time, growth generally had been confined to a rather small group of conglomerates, most benefiting from the governments favour. Numbers had increased by 19% compared to 2009. [58][59] Unlike many of its more export-dependent neighbors, Indonesia has managed to skirt the recession helped by strong domestic demand (which makes up about two-thirds of the economy) and a government fiscal stimulus package of about 1.4% of GDP. They demanded a 22% to 25% increase in the minimum wage by 2016 and lower prices on essential goods, including fuel. Under President Susilo Bambang Yudhoyono (SBY), the government was forced to cut its massive fuel subsidies, which were planned to cost $14 billion in October 2005.

Indonesia: how to boost investment in renewable energy. Although Indonesia has remained a major importer of manufactured goods, high technology, and technical skills since the early 1970s, the countrys economic base has shifted from the primary sector to secondary and tertiary industriesmanufacturing, trade, and services. It refers to the total value of net wealth possessed by the citizens of a nation at a set point in time. Transportation and accommodation were significantly affected by the COVID-19 outbreak, since many hotels were forced to close and not operate to reduce the spread of the virus. [144] In 2010, 609 transactions were announced, which is a new record. [137] The two countries target to achieve bilateral trade of $25 billion by 2015, with cumulative Indian investments of $20 billion in Indonesia.[138]. [39] Despite this, currency issued during the Japanese occupation and by Dutch authorities was still in circulation, and the simplicity of the ORI made its counterfeiting relatively easy, worsening matters. ", "Indonesia to replant 4.7m hectares of palm oil plantation", "Tigers count the cost of easing fuel subsidies", "Coal Mining in Indonesia - Indonesian Coal Industry | Indonesia Investments", "Coal production may reach 370 million tons this year", "Nickel prices hit four-year high on Indonesia export ban", "RI aims to be second largest alumina producer", "Economic nationalism is back in Indonesia as election approaches", "Indonesia's Manufacturing Sector: Practical Information for Investors", https://www.researchgate.net/publication/341793782, "Honda eyes larger share in premium bike market", "Local automobile sales hit all-time high", "Penjualan mobil capai 1,1 juta unit di 2012", "Car Exports Expected to Increase 15.6% This Year", "Google to Open Indonesia Office 'Before 2012', "Internet penetration and the connected archipelago", "Indonesia's State Assets Worth IDR1,338.7 Trillion", "Siaran Pers: OJK Awasi 50 Konglomerasi Keuangan", "Indonesia textile sector faces challenge", "Indonesia Among the World's Top 10 Remittance Receivers", "After Malaysia, RI seeks similar pact with S. Arabia", "ASEAN feared to become multinational companies market only", "ASEAN Framework Agreement on Services (1995)", "Concern over free flow of labour after AEC starts", "Why the AEC in 2015 Will Lead to Few Changes in Thailand", "Indonesia belum akan masuk Asean Linkage", "Singaporean PM urges ASEAN to liberalise aviation", "Indonesia-Japan Economic Partnership Agreement (IJEPA) Reviewed", Huge opportunity from Japanese investment, "Indonesia China Trade Relations: The deepening of economic integration amid uncertainty? The currency exchange rate reached Rp 12,000/USD1 before stabilizing. It became the third-biggest foreign investor in Indonesia, with US$1.94 billion in investment. The 1997 crisis brought to light a severe weakness in the process of dispute resolution, however, particularly in the area of private infrastructure projects. Fitch also predicted that the economy would grow at least 6% on average per year through 2013, despite a less conducive global economic climate. Reform happened in Indonesia around the 1980s, when the Indonesian government states it will be attempting to economically integrate with global economies. This growth was financed mostly from private investment, both foreign and domestic. [103] Exports from the textile sector in 2012 were $13.7 billion. It initially acted as the manufacturer and distributor of ORI (Oeang Republik Indonesia/Money of the Republic of Indonesia), a currency issued by the Republican Government which was the predecessor of Rupiah. and Yurnaidi, Z. [74] Primary agriculture commodities include rice, cassava (tapioca), peanuts, natural rubber, cocoa, coffee, palm oil, copra; poultry, beef, pork, and eggs. By November 1997, rapid currency depreciation had seen public debt reach US$60 billion, imposing severe strains on the government's budget. In February 2017 the electricity, gas, and water sector has the highest average net wage, while the agriculture sector has the lowest.[140]. Various mass guidance (bimbingan massal) schemes to broaden the availability of credit and to promote the use of fertilizers and high-yielding varieties have increased rice output. The rupiah remained weak, however, and Suharto was forced to resign in May 1998 after massive riots erupted. Banking practices were very unsophisticated, with collateral-based lending the norm and widespread violation of prudential regulations, including limits on connected lending.

Batak market on the shore of Lake Toba, Sumatra, Indonesia. [115] In 2012, there were between 1,200 and 1,300 Japanese corporates operating in Indonesia, with some 12,000 Japanese nationals living in Indonesia. President Abdurrahman Wahid took office in October 1999, and Indonesia and the IMF signed another EFF in January 2000. Major timber operations are located primarily in Kalimantan, but logging also occurs on the other large islands; legitimate companies as well as illegal loggers target certain species, such as meranti (a subspecies of the genus Shorea), which yields an easily workable, relatively lightweight reddish wood. Because of political turmoil, the country had once suffered hyperinflation, with 1,000% annual inflation between 1964 and 1967,[177] and it had been enough to create severe poverty and hunger. [47] High levels of economic growth masked several structural weaknesses in the economy. Since the 1960s the timber industry has grown rapidly, but it has caused considerable damage through deforestation. Economic outlook became more positive as the 2000s progressed. [61] Indonesia managed to increase their GDP growth slightly above 5% in 20162017. It is equivalent to a free trade agreement, though focuses on a broader scope of economic cooperation. Despite these efforts, the rank is still below regional peers, and an unfavorable investment climate persists. Palm oil production is vital to the economy as Indonesia is the world's biggest producer and consumer of the commodity, providing about half of the world's supply. Prior to the formation of the Indonesian Republic, the Japanese had viewed Indonesia as an important source of natural resources. In the late 20th century, the emphasis in the public sector tended increasingly toward independent, self-financing state enterprises. The consistent monsoon climate and almost even distribution of rainfall in Indonesia make it possible for the same types of crops to be grown throughout the country. This is a chart of trend of Indonesia's GDP at market prices[139] by the IMF with figures in millions of rupiah. [92] Since 2011, some local carmakers have introduced some Indonesian national cars which can be categorized as Low-Cost Green Car (LCGC). CS1 maint: bot: original URL status unknown (. Large-scale agribusiness is becoming a more important component of the countrys economy, with increasing government investment. Rice, corn, and cassava are grown in the Padang area in the west and around the oil fields near Palembang in the southeast. Indonesia was the only Asian member of the Organization of Petroleum Exporting Countries (OPEC) until 2008 and is currently a net oil importer. [63][64] The current unemployment rate for 2019 is at 5.3%.[65]. Substantial expansion of the private sector has been evident since the mid-1990s. ASEAN has concluded seven packages of commitments under AFAS.

Financial assistance to Indonesia is coordinated through the Consultative Group on Indonesia (CGI) formed in 1989. In 2012, sales increased significantly by 24%, making it the first time that there were more than one million units in automobile sales. [175] 1% of Indonesia's population has 49.3% of the country's $1.8 trillion wealth, down from 53.5%. Toyota dominated the domestic car market (35.34%), followed by Daihatsu and Mitsubishi with 15.44% and 14.56%, respectively. US imports from Indonesia in 1999 totaled $9.5 billion and consisted primarily of clothing, machinery and transportation equipment, petroleum, natural rubber, and footwear. For Japanese businesses, Indonesia has been a location for low-cost manufacturing operations as well as being the source of various natural resources required by those operations. Receipts from gold, copper, and coal accounted for 84% of the $3 billion earned in 1998 by the mineral mining sector. Under the deal, Indonesia will scrap 94.8% of tariffs on South Korean products while South Korea will scrap 95.8% of tariffs on Indonesian products. Under Suharto, Indonesia had moved towards the private provision of public infrastructure, including electric power, toll roads, and telecommunications. [85], Joko Widodo's administration continued the resource nationalism policy of SBY, nationalizing some assets controlled by multinational companies such as Freeport McMoRan, TotalEnergies and Chevron. [134] In August 1998, Indonesia and the IMF agreed on an Extended Fund Facility (EFF) under President B. J. Habibie that included significant structural reform targets. [142] Efforts are further being made to improve the business and investment environment. Nevertheless, Indonesia's post-1960 economic improvement was considered remarkable when taking consideration of how few indigenous Indonesians in the 1950s had received a formal education under Dutch colonial policies. The 1997 crisis made continued private financing imperative but problematic. In 2015, the total production of seafood reached about 22.31 million metric tons, valued at around 18.10 billion US dollars. To date, inflation is affecting the Indonesian lower middle class, especially those who are not able to afford food after price hikes. [160], Corruption is pervasive in the Indonesian government, affecting many fields that are central to barrier the country's economic development from local governments, the police, the private sectors even various ministerial institutions which are close to the president. Trade with China has increased since the 1990s, and in 2014, China became Indonesia's second-largest export destination after Japan. [90], In 2010, Indonesia sold 7.6 million motorcycles, which were mainly produced in the country with almost 100% local components. (See Inter-Governmental Group on Indonesia and Berkeley Mafia). Growth accelerated to 5.1% in 2004 and reached 5.6% in 2005. [163] A 2018 World Economic Forum survey reports that corruption is the most problematic issue regarding doing business in Indonesia, as well as inefficient government bureaucracy policies. Indeed, while in 2003 trade between Indonesia and China reached only US$3.8 billion, in 2010 it multiplied almost 10 times and reached US$36.1 billion. Indonesia has increased the debt by Rp 1,815 trillion compared to his predecessor, SBY. Thus, the government, together with foreign aid, has been a major force in propelling development in areas where private enterprise has not been immediately forthcoming; the state-owned oil company Pertamina was a product of these government initiatives. This was the worst growth since the 1997 crisis. The initial response was to float the rupiah, raise key domestic interest rates, and tighten fiscal policy. Small business was slower to develop.

Indonesia faced a recession in 2020 when the economic growth collapsed to -2.07% due to the COVID-19 pandemic, the worst growth since 1997 crisis. At the same time, the government has offered one-time subsidies for qualified citizens, to alleviate hardships. [95], In 2017, the country produced almost 1.2 million motor vehicles, ranking it as the 18th largest producer in the world. Indonesia has some of the worlds largest tracts of exploitable tropical forest, especially in Kalimantan and Papua. Please remove or replace such wording and instead of making proclamations about a subject's importance, use facts and attribution to demonstrate that importance. Export of cultivated shrimp from sizable farms in western Java and southern Sumatra has been a boon to middle-sized businesses. Careful management of allocated funds has been described as Indonesia's main issue in public expenditure. According to Credit Suisse, Indonesia has national net wealth of approximately $3.199 trillion, or about 0.765% of world net wealth, placing Indonesia at 17th, above Russia, Brazil, and Sweden. 2.78% in multidimensional poverty (2021)[8], The economy of Indonesia is the largest in Southeast Asia and is one of the emerging market economies. [158], According to Asia Wealth Report, Indonesia has the highest growth rate of high-net-worth individuals (HNWI) predicted among the 10 most Asian economies. A few of them were entrepreneurs who made new businesses. [165][166] There were 26 points in the revised law that crippling the commission, and might further prevent more progressive efforts to eradicate corruption cases in Indonesia. [75] Plantations in the country stretch across 6 million hectares as of 2007,[76] with a replanting plan set for an additional 4.7 million to boost productivity in 2017. [113][114] This policy supersedes existing unilateral, bilateral, and multilateral air services agreements among member states which are inconsistent with its provisions. [53], Since an inflation target was introduced in 2000, the GDP deflator and the CPI have grown at an average annual pace of 10% and 9%, respectively, similar to the pace recorded in the two decades prior to the 1997 crisis, but well below the pace in the 1960s and 1970s. Those who received visas for six months to one year were mostly Chinese, Japanese, South Koreans, Indians, Americans and Australians. Individuals in these professions will be free to work in any ASEAN states effective 31 December 2015. [141] As of November 2010, two-thirds of the market capitalization was in the form of foreign funds, and only around 1% of the population have stock investments. [174] At a 2011 Makassar Indonesian Chamber of Commerce and Industry (Kadin) meeting, Disadvantaged Regions Minister said there are 184 regencies classified as disadvantaged areas, with around 120 in eastern Indonesia. Put into perspective, Indonesia's manufacturing sector is now larger than the manufacturing sectors of the United Kingdom, Russia and Mexico. [99] According to Deloitte in 2011, Internet-related activities have generated 1.6% of the GDP. The project will not make the ores to become aluminum, as there are 100 types of Alumina derivatives that can be developed further by other companies in Indonesia. Average net wage in Indonesia varies by sector. By Widodo's estimate, there would be economic growth of 56% & GDP US$9.1 trillion. This growth rate was sufficient to reduce poverty from 17.8% to 16.6% based on the government's poverty line and reversed the recent trend towards jobless growth, with unemployment falling to 8.46% in February 2008. The government intervenes in the marketing of rice to maintain production at an economically viable level. The situation had stabilized but the economy continued to struggle with inflation at 17% in late 2005. Intensive cultivation is restricted to Java, Bali, Lombok, and certain areas of Sumatra and Celebes. [37], In the years immediately following the proclamation of Indonesian independence, both the Japanese occupation and conflict between Dutch and Republican forces had crippled the country's production, with exports of commodities such as rubber and oil being reduced to 12 and 5% of their pre-WW2 levels, respectively. Today Indonesia is Japan's major supplier for natural rubber, liquefied natural gas, coal, minerals, paper pulp, seafood such as shrimp and tuna, and coffee. 51.4 trillion (US$5.6 billion) or approximately 1.4% of GDP annually.

[98], There are 50 million small businesses in Indonesia, with online usage growth of 48% in 2010.

ASEAN Centre for Energy (ACE) Policy Brief Series, No. [96] Nowadays, Indonesian automotive companies can produce cars with a high ratio of local content (80%90%). [181][182] At the end of 2017, Indonesia's inflation rate was 3.61%, or higher than the government-set forecast of 3.03.5%.[183]. Japan has been investing in Indonesia for decades, particularly in the automotive, electronic goods, energy, and mining sectors. [146], Indonesia regained its investment grade rating from Fitch Rating in late 2011, and from Moody's Rating in early 2012, after losing it in the 1997 crisis, during which Indonesia spent more than Rp. Indonesia has played a modest role in the world economy since the mid-20th century, and its importance has been considerably less than its size, resources, and geographic position would seem to warrant. Deforestation and air quality issues prompted environmentalists to urge the Indonesian government to curtail clear-cutting of trees, to control burning, and to implement reforestation programs. The effects of the crisis were severe. [83] Indonesia is also the world's largest producer of nickel. Whereas total trade was worth almost 16 billion in 2009, by 2011 it had already reached 23.5 billion. [104] In May 2011, six million Indonesian citizens were working overseas, 2.2 million of whom reside in Malaysia and another 1.5 million in Saudi Arabia.[105]. [150][151], In 2018, President Joko Widodo substantially increased the amount of debt by taking foreign loans.