The Dutch began to colonize Indonesia in the early 17th century; the islands were occupied by Japan from 1942 to 1945. Indonesia declared its independence after Japan's surrender, but it required four years of intermittent negotiations, recurring hostilities, and UN mediation before the Netherlands agreed to relinquish its colony. Indonesia is the world's largest archipelagic state and home to the world's largest Muslim population. Current issues include: alleviating poverty, preventing terrorism, consolidating democracy after four decades of authoritarianism, implementing financial sector reforms, stemming corruption, holding the military and police accountable for human rights violations, and controlling avian influenza. In 2005, Indonesia reached a historic peace agreement with armed separatists in Aceh, which led to democratic elections in December 2006. Indonesia continues to face a low intensity separatist guerilla movement in Papua.

Geography

Indonesia is an archipelago of 17,508 islands (6,000 inhabited); straddles equator; strategic location astride or along major sea lanes from Indian Ocean to Pacific Ocean

Location: Southeastern Asia, archipelago between the Indian Ocean and the Pacific Ocean

Area: total: 1,919,440 sq km; land: 1,826,440 sq km; water: 93,000 sq km

Land boundaries: total: 2,830 km; border countries: Timor-Leste 228 km, Malaysia 1,782 km, Papua New Guinea 820 km

Coastline: 54,716 km

Climate: tropical; hot, humid; more moderate in highlands
Terrain: mostly coastal lowlands; larger islands have interior mountains

Elevation extremes: lowest point: Indian Ocean 0 m; highest point: Puncak Jaya 5,030 m

Natural resources: petroleum, tin, natural gas, nickel, timber, bauxite, copper, fertile soils, coal, gold, silver

People

Population: 234,693,997 (July 2007 est.)

Net migration rate: -1.27 migrant(s)/1,000 population (2007 est.)

Life expectancy at birth: total population: 70.16 years; male: 67.69 years; female: 72.76 years (2007 est.)

Ethnic groups: Javanese 40.6%, Sundanese 15%, Madurese 3.3%, Minangkabau 2.7%, Betawi 2.4%, Bugis 2.4%, Banten 2%, Banjar 1.7%, other or unspecified 29.9% (2000 census)
Religions: Muslim 86.1%, Protestant 5.7%, Roman Catholic 3%, Hindu 1.8%, other or unspecified 3.4% (2000 census)

Languages: Bahasa Indonesia (official, modified form of Malay), English, Dutch, local dialects (the most widely spoken of which is Javanese)

Government

Government type: republic

Capital: Jakarta

Administrative divisions: 30 provinces (propinsi-propinsi, singular - propinsi), 2 special regions* (daerah-daerah istimewa, singular - daerah istimewa), and 1 special capital city district** (daerah khusus ibukota); Aceh*, Bali, Banten, Bengkulu, Gorontalo, Irian Jaya Barat, Jakarta Raya**, Jambi, Jawa Barat, Jawa Tengah, Jawa Timur, Kalimantan Barat, Kalimantan Selatan, Kalimantan Tengah, Kalimantan Timur, Kepulauan Bangka Belitung, Kepulauan Riau, Lampung, Maluku, Maluku Utara, Nusa Tenggara Barat, Nusa Tenggara Timur, Papua, Riau, Sulawesi Barat, Sulawesi Selatan, Sulawesi Tengah, Sulawesi Tenggara, Sulawesi Utara, Sumatera Barat, Sumatera Selatan, Sumatera Utara, Yogyakarta*
note: following the implementation of decentralization beginning on 1 January 2001, the 440 districts or regencies have become the key administrative units responsible for providing most government services

chief of state: President Susilo Bambang YUDHOYONO (since 20 October 2004); Vice President Muhammad Yusuf KALLA (since 20 October 2004); note - the president is both the
chief of state and head of government
head of government: President Susilo Bambang YUDHOYONO (since 20 October 2004); Vice President Muhammad Yusuf KALLA (since 20 October 2004)

Economy

Indonesia, a vast polyglot nation, has struggled to overcome the Asian financial crisis, and still grapples with persistent poverty and unemployment, inadequate infrastructure, endemic corruption, a fragile banking sector, a poor investment climate, and unequal resource distribution among regions. The country continues the slow work of rebuilding from the devastating December 2004 tsunami and from an earthquake in central Java in May 2006 that caused over $3 billion in damage and losses. Declining oil production and lack of new exploration investment turned Indonesia into a net oil importer in 2004. The cost of subsidizing domestic fuel placed increasing strain on the budget in 2005, and combined with indecisive monetary policy, contributed to a run on the currency in August, prompting the government to enact a 126% average fuel price hike in October. The resulting inflation and interest rate hikes dampened growth through mid-2006, while large increases in rice prices pushed millions more people under the national poverty line. Economic reformers introduced three policy packages in 2006 to improve the investment climate, infrastructure, and the financial sector, but translating them into reality has not been easy. Keys to future growth remain internal reform, building up the confidence of international and domestic investors, and strong global economic growth. 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.

Labor force: 108.2 million (2006 est.)

Labor force - by occupation: agriculture: 43.3%; industry: 18%; services: 38.7% (2004 est.)

Unemployment rate: 12.5% (2006 est.)

Industries: petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food, tourism

information courtesy The World Factbook Spetember 2007