Indonesia Demographic

Indonesia Demographic

According to Central Statistics Bureau and Statistics Indonesia 2009, the population of Indonesian people is 232 million people.

The official language of Indonesia is Indonesian language. In Indonesia there are 300 native ethnicities. Dialects and languages are around 743 which are very varies .Indonesian are descended from Austronesian people. Their languages are developed from Melanesian people that used to live in eastern Indonesia. Javanese is found to be the largest ethic group who comprise 42% of the population, and are politically and culturally dominant. The Sundanese, ethnic Malays, and Madurese are the largest non-Javanese groups.Nowsday, there are Chinese Indonesian but they are ethnic minority consisted of less than one percent of the Indonesian population. However, The major economic and commerce of Indonesia wealth is Chinese controlled .


largest archipelago country in the world is Indonesia which comprising 17,508 islands stretching along 5,120 kilometers from east to west, and 1,760 kilometers from north to south. The islands scatter over more than one tenth of the equator between Southeast Asia and Australia, covering a land area of around 2 million square kilometers and territorial waters nearly four time of that size.

The main islands are the following:

Bali, Kalimantan Java, Sumatera, Sulawesi, and Papua. However, Indonesia consists of two large groupings of smaller islands: Maluku and Nusa Tenggara.

Main cities of Indonesia are the following

Jakarta is the capital city of the Republic of Indonesia located on the north west coast Java, is the government and an economic center of Indonesia. The second largest is Surabaya, Indonesia's second largest city located in East Java, is a leading industrial center and port. The Medan in North Sumatera, is the third largest city near of Singapore/ Selat Malaka. Other important cities are Bandung, Denpasar , Semarang, Yogyakarta, Padang, Palembang, Makassar, Manado, Banjarmasin, Balikpapan, and Jayapura.


Indonesia locates within the equatorial zone .So , Indonesia is hot ,dry as well as has a high degree of air relative humidity. The average air relative humidity ranges around 80-90%. Although, the average temperature in Indonesia is around 35oC in 2009 .But for the high areas such as hills, caves , mountains and jungles the temperature is 25oC and 30oC. This implies that the temperature can increase to 35oC in 2009 where as the lowest air temperature is 21oCC.

3. Economy-

GDP growth rate, per capita GDP, competitiveness, openness, exchange rate, trade system, tariff etc.,

According to Badan Pusat Statistik Republik Indonesia (Statistics Indonesia) 2010

* Indonesia economic growth rate in 2009 is 4.5%

* Economic growth per capita GDP is 24,3 million rupiah that is around 2590,1 US dollars

* Inflation in January 2010 is 0.84%

Exchange Rage

Indonesian currency is Rupiah. Rupiah connotation from Indian currency which known as Rupee. Bank of Indonesia is authorized to issue currency . Indonesia Currency is denoted by the currency code IDR. Rupiah is denoted by the symbol Rp.

According to Indonesia Bank, before ushering of the present currency system, the currency that was used during the dutch colonial era, especially between 1610 and 1817, was Dutch Guilder. During World War 2, the Japanese Imperialist forces invaded Indonesia and crushed the Dutch regime. It is in this period, the new currency called Rupiah was introduced. But just after the Japanese forces surrendered before the Allied forces, the currency of Indonesia got changed from Rupiah to Java Rupiah, introduced by the Java Bank, as a stop gap currency. Present day Indonesia Currency called the Indonesian Rupiah was first accepted by the independent country on 02.11.1949. But still after independence, there were some parts of the island which had their own currency. The Riau Island along with some parts of New Guinea had their own currency system. It was only in the years 1964 and 1971, that Rupiah was accepted as the national currency by those areas too.

At first, Indonesia Currency was introduced in the paper format, known as bank notes. It was introduced in the subsequent years, 1951 and 1952. The bank notes of Rupiah was introduced with the denominations 1 Rupiah, 5 Rupiah, 10 Rupiah, 25 Rupiah, 50 Rupiah, 100 Rupiah, 500 Rupiah and 1000 Rupiah in the year 1952. But to keep up with the pace of inflation, the Indonesia Bank had to introduce bank notes of denominations of 2500 and 5000 Rupiah.

Coins were first introduced in the financial year 1970. At present Indonesia Currency is being issued in the form of coins with the denominations 1, 2, 5, 10, 25, 50, 100, 200, 500 and 1000 Rupiah.

Indonesia uses manage floating exchange rate system to administrate the currency. Managed float is an exchange rate system under which a country's exchange rate is not pegged, which reflect the demand and supply of Rupiah currency in forex market. Although, the currency tend to fluctuate during the day and has impact on the export and import industry. Therefore , Bank of Indonesia try to smooth out this effect by buying and selling rupiah. For instance, if Bank of Indonesia want Rupiah to be weak , Bank can sell Rupiah and buy US dollars .As a consequence of this, Rupiah will boost the export and contribute to a current account surplus. On the other hand, if the Bank want Rupiah to be strong the Bank can Sell US dollars and purchase Rupiah. As a result of this, Rupiah will boost an import and can contribute to the current account deficit.


Indonesia is the largest palm oil exporter in the world. This is due to Indonesia produces approximately 185000000 tonnes per annum as well as most of the palm oil produced is used to export rather than local consumption. In addition, the land about 9.7 million hectares were used to plant palm in 2009.Indonesia has a comparative advantage in growing and producing palm oil due to most of part of Indonesia lies within equatorial zone and a suitable weather to grow palms as well as low wages .Hence cost of production is very competitive in the world market.

Another, competitiveness of Indonesia is the coal mining industry. Coal mine is the largest mine in Indonesia . Indonesia is the third largest coal steaming exporter after Australia and China.

According to the 2008 BP Statistical Energy Survey, Indonesia had end 2007 coal reserves of 4328 million tonnes. Indonesia is one of the leading exporters of sub-bituminous coal which represents the bulk of Indonesian coal production. According to the 2008 BP Statistical Energy Survey, Indonesia had 2007 coal production of 174.83 million tonnes, and consumption of 27.8 million tonnes oil equivalent. Most of Indonesia's coal reserves are situated in Sumatra in the south, with the balance located in Kalimantan, West Java, and Sulawesi. Coal quality varies, with lower grade lignite (59%), sub bituminous (27%) and high grade bituminous and anthracite (14%).

Tariff System

Recently, Indonesia try to open free trade. However, there were obstacles that slow the progress. As Indonesian tariffs are invented to stimulate export and to shield infant domestic industries. Although, the tariff system is burdensome and time consuming as well as evasion is wide spread.

Indonesia tariff structure consists of 0%, 5%, of 10 % applied to various commodities, has been implemented to satisfy Indonesia's IMF commitments. An import sales tax is imposed on imports at point of entry (except for those goods considered essential by the government) at rates of 5–30%. Distilled spirits are dutied at a rate of 170% and vehicle taxes range from 5% for trucks up to 75% for some sedans. Indonesia has also committed to the ASEAN Free Trade Agreement and its Common Effective Preferential Tariff (CEPT).

Moreover, There is a free trade zone on Batam Island that is exempt from all import and export taxes; a free trade facility near Tanjung Priok, the country's main port; a bonded warehouse in Cakung, near Jakarta; and a number of other export processing zones

4. Political System

The political system in Indonesia is the presidential system. The authorities is concentrated in the central government. Indonesian president has a supreme power as the president is the chief commander of the national armed forces , the head of state, policy maker as well as head of state etc. Ministers are not required to be elected members of legislative they are appointed by Indonesian president.

People's Consultative Assembly (MPR)is the highest representative body at national level. The president can be impeached by MPR as MPR has an authorities to do so .In addition, There are 2 houses in MPR the People's Representative Council (DPR), with 560 members, and the Regional Representative Council (DPD), with 132 members.

5. Legal and regulatory environment

Court system

There are State , High and Supreme courts in Indonesia. Supreme is the highest court in the nation. Other courts are Commercial, State Administrative and Constitutional courts

6. Socio-cultural environment

- including work force values, consumer attitudes etc.

7. Availability of resources

- natural, raw materials, human, financial etc.

Natural Resources


8. Concern for Ethics and social Responsibility

Conclusion and your recommendation

10. References

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