Indonesia Country Profile
Population
Total: 281,562,465
Male: 140,800,047
Female: 140,762,418
Ethnic groups
Javanese 40.1%,
Sundanese 15.5%,
Malay 3.7%,
Batak 3.6%,
Madurese 3%,
Betawi 2.9%,
Minangkabau 2.7%,
Buginese 2.7%
other 25%
Languages
Bahasa Indonesia (official, modified form of Malay) English
Dutch
local dialects (of which the most widely spoken is Javanese); more than 700 languages are used in Indonesia.
Religions
Muslim 87.4%
Protestant 7.5%
Roman Catholic 3.1%
Hindu 1.7%
other 0.8%
Population distribution
Major concentration on the island of Java, which is considered one of the most densely populated places on earth; of the outer islands (those surrounding Java and Bali), Sumatra contains some of the most significant clusters, particularly in the south near the Selat Sunda, and along the northeastern coast near Medan. The cities of Makasar, Banjarmasin are also heavily populated. [1]
Economic Context
Economic overview
Real GDP (purchasing power parity)
$3.906 trillion (2023 est.)
$3.718 trillion (2022 est.)
$3.718 trillion (2022 est.)
Real GDP growth rate
5.05% (2023 est.)
5.31% (2022 est.)
3.7% (2021 est.)
Agricultural products: oil palm fruit, rice, sugarcane, maize, coconuts, cassava, bananas, eggs, mangoes/guavas.
Industries: petroleum and natural gas, textiles, automotive, electrical appliances, apparel, footwear, mining, cement, medical instruments and appliances, handicrafts, chemical fertilizers, plywood, rubber, processed food, jewellery, and tourism.
Industrial production growth rate: 5% (2023 est.)
Labour force: 140.931 million (2023 est.)
Unemployment rate:3.42% (2023 est.), 3.46% (2022 est.), 3.83% (2021 est.) [1]
Economy in Context
Indonesia's GDP growth is forecast to average 5.1% annually from 2024 to 2026, despite challenges like the fading commodity boom, volatile food and energy prices, and rising geopolitical uncertainty, according to the World Bank.
Strong macroeconomic policies have attracted investment, but maintaining fiscal discipline and prioritising social spending and infrastructure remains crucial.
Inflation, driven by rising food prices and adverse climate conditions, is expected to average 3% in 2024. Bank Indonesia raised its interest rate to 6.25% in 2024 due to currency pressures but may start cutting rates next year. Public debt is projected to remain stable as the government increases social spending.
Emerging challenges include rising concentration in manufacturing, regional income disparities, weak wage growth, and limited labour mobility. Regulatory reforms to boost private sector investment and productivity are key to Indonesia's goal of becoming a high-income country by 2045. [2]
Political context
Government
Government type: Presidential Republic
Capital: Jakarta - Indonesian lawmakers on 18 January 2022 approved the relocation of the country’s capital from Jakarta to a site on the island of Borneo between Samarinda City and the port city of Balikpapan.Nusantara, officially the Capital City of Nusantara (Indonesian: Ibu Kota Nusantara, abbreviated IKN)
Administrative divisions: 35 provinces
Executive Branch
Chief of state: President Joko "Jokowi" Widodo(since 20 October 2014)
Head of government: President Joko "Jokowi" Widodo (since 20 October 2014)
Cabinet: Cabinet appointed by the president
Elections/appointments: president and vice president directly elected by absolute majority popular vote for a 5-year term (eligible for a second term); election last held on 14 February 2024 (next to be held in 2029)
Election results:
2024: Prabowo Subianto elected president (assumes office 20 October 2024); percent of vote - Prabowo Subianto (GERINDRA) 58.6%
Anies Rasyid Baswedan (Independent) 24.9%
Ganjar Pranowo (PDI-P) 16.5%
2019: Joko WIDODO reelected president; percent of vote - Joko Widodo (PDI-P) 55.5%, Prabowo Subianto Djojohadikusumo (GERINDRA) 44.5%
Legislative Branch
Description: The bicameral People's Consultative Assembly or Majelis Permusyawaratan Rakyat (MPR) consists of:
Regional Representative Council or Dewan Perwakilan Daerah (136 seats; non-partisan members directly elected in multi-seat constituencies - 4 each from the country's 34 electoral districts - by proportional representation vote to serve 5-year terms), the Regional Representative Council has no legislative authority
House of Representatives or Dewan Perwakilan Rakyat (580 seats; members directly elected in multi-seat constituencies by single non-transferable vote to serve 5-year terms)
Elections: Regional Representative Council - last held on 14 February 2024 (next to be held in 2029)
House of Representatives - last held on 14 February 2024 (next to be held in 2029) election results: Regional Representative Council - all seats elected on a non-partisan basis; composition - men 102, women 34, percentage women 25%
House of Representatives - Percent of vote by party:
PDI-P 16.7% PAN 7.2%;
Golkar 15.3% PD 7.4%
Gerindra 13.2% PKS 8.4%
PKB 10.6% Nasdem 9.7%
other 11.5% (10 additional parties received votes);
Seats by party:
PDI-P 110 Nasdem 69
Golkar 102 PKS 53
Gerindra 86 PD 44
PKB 68 PAN 48
composition - men 449, women 126, percentage women 21.9%
Judicial branch
Highest court:
Supreme Court or Mahkamah Agung (51 judges divided into 8 chambers); Supreme Court judges nominated by Judicial Commission, appointed by president with concurrence of parliament; judges serve until retirement at age 65.
Parliamentary registered parties
Democrat Party or PD
Functional Groups Party or GOLKAR
Great Indonesia Movement Party or GERINDRA Indonesia Democratic Party-Struggle or PDI-P National Awakening Party or PKB
National Democratic Party or NasDem National Mandate Party or PAN
Prosperous Justice Party or PKS [1]
International Political Context
1. Geopolitical Importance
Strategic Location: Positioned at the crossroads of major global shipping routes, including the Malacca Strait, Indonesia is critical to global trade. Its location between the Pacific and Indian Oceans makes it vital for regional security and trade, with interests from major powers such as the U.S., China, and India.
ASEAN Leadership: As Southeast Asia’s largest economy and most populous country, Indonesia is a central player in the Association of Southeast Asian Nations (ASEAN). It often shapes ASEAN’s diplomatic direction, promoting regional stability, economic integration, and collective responses to global issues.
2. Relations With Major Powers
China: Indonesia maintains strong economic ties with China, particularly through trade and investment in infrastructure projects as part of China’s Belt and Road Initiative (BRI).
However, Indonesia is cautious about China’s growing influence in Southeast Asia and has clashed with China over territorial disputes in the South China Sea, particularly regarding Chinese fishing activities in Indonesia’s Exclusive Economic Zone (EEZ).
United States: The U.S. views Indonesia as a key partner in the Indo-Pacific strategy, focusing on maritime security, counterterrorism, and regional stability. While the U.S. and Indonesia cooperate on defence and trade, Indonesia's independent stance means it avoids overt alignment with U.S. strategic aims against China.
India: Indonesia shares strong relations with India, especially in maritime security and economic cooperation. Both countries are involved in multilateral efforts like the Indian Ocean Rim Association (IORA) to ensure stability in the Indian Ocean region.
Japan: Japan is a major investor in Indonesia, focusing on infrastructure, energy, and trade. Indonesia also cooperates closely with Japan on maritime security, especially in the context of countering China's assertiveness in regional waters.
3. South China Sea and Regional Security
South China Sea Disputes: While Indonesia is not a claimant in the South China Sea disputes, it has had conflicts with China over fishing activities in the Natuna Islands area, which lies within Indonesia's EEZ.
Indonesia has taken a firm stance on protecting its maritime sovereignty and has built up military infrastructure in the region to assert its control.
ASEAN Defense Diplomacy: As a key member of ASEAN, Indonesia advocates for peaceful resolution of disputes in the South China Sea and is involved in promoting dialogue between China and ASEAN countries to create a Code of Conduct in the region.
4. Global Multilateralism
G20 Member: Indonesia is the only Southeast Asian nation in the G20, and it plays a significant role in shaping global economic governance. Indonesia hosted the G20
summit in 2022, emphasizing post-pandemic economic recovery, sustainable development, and global cooperation on climate change.
United Nations: Indonesia is an active participant in the United Nations, particularly in peacekeeping operations. It has consistently contributed troops to UN peacekeeping missions worldwide and promotes multilateralism in addressing global issues like climate change, terrorism, and conflict resolution.
Climate Diplomacy: As one of the world’s largest emitters of greenhouse gases, largely due to deforestation, Indonesia plays a crucial role in global climate negotiations. The country has committed to reducing carbon emissions, though it faces challenges balancing environmental sustainability with economic development. Indonesia is a vocal participant in the UN Climate Change Conference (COP).
5. Economic Diplomacy
Bilateral and Regional Trade: Indonesia seeks to expand its economic ties through
bilateral trade agreements and is a member of several multilateral trade pacts, including the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade agreement, which involves ASEAN, China, Japan, South Korea, Australia, and New Zealand.
Attracting Foreign Investment: Indonesia’s economic diplomacy focuses on attracting foreign investment, particularly in infrastructure, digital economy, and green energy.
While the country benefits from Chinese investment, it is diversifying its economic ties by promoting investment from Japan, the U.S., Europe, and India. [3]
