The Republic of Indonesia is the worlds largest archipelago with approximately 17,000 islands, of which 70% are considered unpopulated. The country has 27 provinces and two special regions. After over 300 years of Dutch rule, Indonesia gained its independence from the Netherlands in 1949. The countrys five main islands are Irian, Java, Kalimantan, Sulawesi and Sumatra. Java is the smallest of the five which is were approximately 60% of the countries 200 million people live.

The Indonesian archipelago has a land mass of approximately 1,826,440 sq. km. The islands are located in South East Asia between the Indian Ocean and the Pacific Ocean. Indonesias coastline is approximately 2,600 km and borders Malaysia, Papua New Guinea and East Timor. The largest island is Sumatra, however, Jakarta, the countries capital is located on the island Java.

Figure 2

Source: United States Central Intelligence Agency

DemographicsIndonesia is comprised of various ethnic groups including 45% Javanese, 14% Sundanese, 7.5% Madurese, 7.5% Coastal Malays and 26% other. Bahasa Indonesia is the official language, however, English, Dutch and various local dialects are spoken.

Figure 3

Religious Affiliations
2000 Census

Description

Source: Bureau of Statistics, 2000 Census

Population The total population of Indonesia as reported by the Bureau of Statistics from the census conducted in 2000, was 206,264,595 people compared to 179,378,946 people counted in the 1990 census. The average annual population growth rate of Indonesia during 1990 to 2000 was 1.49%. Based on this growth, it is estimated that as of July 2003, there were 234.9 million people living throughout Indonesia.

According to the 2000 census, 42% of the population lived in urban areas, as compared to only 30.9% in 1990.

Source: Bureau of Statistics, 2000 Census
(Figures do not total full census due to "no response" on census form)

Labor force Based on national labor force surveys conducted by the Bureau of Statistics, unemployment for persons 15 years and older was approximately 8.1% of a labor force of approximately 99 million people as of December 31, 2001.

Table 2

Source: National Labour Force Survey 2001

Table 3

Source: National Labour Force Survey

Poverty Levels: Country-specific poverty lines are generally used due to variations between countries and affected by local tastes and cultural norms according to the United Nations. According to the Asian Development Bank (ADB), 2002 estimates of poverty show that 17.9% people live below the countries poverty level which has improved from peak levels in 1998 at 24.2%. The ADB makes the determination that the incidence of poverty is highly sensitive to the movement in food prices.

Economic Indicators According to the ADB, economic growth was sustained in 2002, largely by private consumption spending, while the Government made progress in improving macroeconomic growth and fiscal sustainability. The immediate economic disruption of the terrorist attacks in Bali in October 2002 has been generally contained, but will negatively impact growth, which is expected to remain at modest levels in 2003 and 2004.

Exports and imports declined in 2002. Private and government spending grew strongly in 2002, providing the major stimulus to GDP growth during 2002. Private spending was relatively stronger than overall income growth, partly in a delayed response to the ending of the recession sparked by the Asian financial crisis.

Although the external environment will contribute to the projected recover, exports are likely to face stiffer international competition in the region, especially from People's Republic of China and Viet Nam.

Gross Domestic Product Gross Domestic Product (GDP) grew 3.7% in 2002 which was supported by private and governmental spending. Manufacturing recorded growth of 3.7% during 2002, despite the impact of floods early in the year and a continuing decrease in investment spending, while the agricultural sector grew by 2.3%. According to the ADB, GDP is expected to be 3.4% for 2003 while strengthening to 4.0% in 2004.

Table 4

Source: Asian Development Bank, World Bank
Average Foreign Exchange Rate in 2002 was 9,311:1to US $

Budget The actual outcome of fiscal consolidation has improved from a budget deficit of 4.8% of GDP in 2000, to 2.5% in 2002 and 1.8% in 2003. A major contributor to the reduction in the fiscal deficit has been the progressive lowering of fuel subsidies by the Government. Interest payments continue to represent one of the major expenditure items in the budget, which amounted to 5.3% of GDP in 2002.

Table 5

Source: Bank Sentral Republik Indonesia
Average Foreign Exchange Rate in 2002 was 9,311 to US$  

Figure 4

Expenditures by Functions 2002

Description

Source: Asian Development Bank

Imports Imports increased 0.5% in 2002 to US$35.8 billion. Oil and gas imports increased from US$5.7 billion in 2001 to US$6.6 billion in 2002. Non-oil/gas imports however declined due to decreases in raw material and capital good imports.

Table 6

Source: The World Bank

Exports Exports increased from US$57.4 billion in 2001 to US$58.8 billion in 2002. Non-oil/gas exports amounted to US$45.3 billion, whereas oil and gas exports reached US$12.7 billion. During 2002, non-oil/gas exports increased by 1% as compared to a decline of 11% in 2001. The increase in exports is attributable to growth in the agricultural and industrial sectors.

Table 7

Source: The World Bank

Indonesia is a Republic with its President and Vice President elected by a direct vote of the citizens. The Peoples Consultative Assembly includes the House of Representatives plus 195 indirectly selected members. The President of the Republic is Megawati Sukarnoputri and the Vice President is Hamzah Haz, both of which were elected into power in July 2001.

There are 4 Coordinating Ministries; 16 Ministries; 9 State Ministries; 16 Non Ministry Government Institutions at the central level. The Republic is divided administratively into 32 provinces, which are headed by Governors. The provinces are divided into regencies and municipalities; and further into sub districts. Each sub districts is divided into villages.

The Indonesian National Social Security Association (INSSA) was established in 1995 as an association of five national social security institutions to provide mandatory coverage against old age, sickness, accident, disability and death.

The social security system is divided into 5 separate programs that collectively form the INSSA.

PT TASPEN - The Government Civil Servants Social Insurance TASPEN was established in 1963 in order to provide for a lump-sum cash benefits at retirement or death. The social insurance scheme was expanded in 1981 to include old-age, survivors and invalidity pension.

PT ASKES - The Health Insurance for Government Civil Servants, Retirees, Veterans and their families ASKES was established in 1968 in order to provide health care for civil servants, retirees, veterans and their dependents. The health insurance scheme was expanded in 1991 based on a managed care program to provide more comprehensive healthcare benefits.

PT ASABRI - The Armed Forces Social Insurance ASABRI was established in 1971 in order to provide protection for the personnel of armed forces and the civilian employees of the Ministry of Defense against reduction or loss of income due to old age, termination of employment and death.

PT JAMSOSTEK - The Employees Social Security JAMSOSTEK was established in 1977 as an Employees Social Insurance scheme known as ASTEK to provide protection against work accidents, provident fund and death insurance. The social insurance scheme was expanded in 1992 to include healthcare benefits and is known as the Employees Social Security System.

JASA RAHARJA - The Traffic Accident Insurance JASA RAHARJA administers two main insurance programs:

• Insurance for public transport passengers against traffic accidents under the Mandatory Insurance Fund for Passenger Accidents
• Third party legal liability insurance against motor vehicle accident under the Fund for Road Traffic Accidents. The benefits are provided in the form of reimbursements for medical treatment and compensation for invalidity and death

Education System The educational system in Indonesia is compulsory for 9 years. The Ministry of Education has adopted an integrated approach to education and in 1986 adopted the following decree:

"Integrated Education is a model of education program for disabled children, which is to be implemented jointly with normal children in a general education institution, by using the curriculum which is normally used in the respective school."

Basic Education Basic education consists of six years of primary school education and three years of junior secondary education. The goal of basic education is to provide the students with basic skills to develop themselves as individuals, members of society, citizens and members of mankind, as well as to prepare them to pursue their study in secondary education.

Primary school programs provide a 6-year primary education and consist of two types; general primary school, and special primary school for handicapped children.

Junior secondary school programs provide a 3-year education and consist of two types; junior secondary (general), and special junior secondary school (for handicapped children).

In addition to the types of education above, there is also an Islamic Primary School administered by the Ministry of Religious Affairs. The Islamic Primary School (Madrasah Ibtidaiyah) is equivalent to primary school, and the Islamic Junior Secondary School (Madrasah Tsanawlyah) is equivalent to junior secondary school.

Secondary Education The various types of secondary education include general secondary school, vocational secondary school, religious secondary school, service secondary school, and special secondary school. General secondary education gives priority to expanding knowledge and developing students skills and preparing them to continue their studies to the higher level of education. Vocational secondary education gives priority to expanding specific occupational skills and emphasizes the preparation of students to enter the world of work and expand their professional attitude. Religious secondary education gives priority to the mastery of special religious knowledge. Service secondary education is education which emphasizes improving the ability in the execution of service tasks of civil servants or candidates for civil service. Special secondary education is especially intended and designed for physically and/or mentally disabled students.

Higher Education Higher education is an extension of secondary education which consists of academic and professional education. Academic education is mainly aimed at mastering science, technology, and research, whereas professional education is more emphasized at developing practical skills.

Enrolment of new students into a national university is based on passing a national entrance test and an achievement monitoring process.

Out-of-School Education Out-of-school education is education which is organized outside the formal education system through teaching and learning activities which are not gradual and continuous. Out-of-school education involves families, group learning, and courses. Family education is organized by the family, and provides religious, cultural and moral values and skills. Out-of-school education can be provided by governmental and non-governmental agencies, the private sector and the community. The communities may provide all types of education with the exception of functional education.

Enrolment Ratios: According to UNICEF, the net primary school ratio during the period of 1995 to 1999 was 93% for males and 90% for females, while gross secondary ratios during the same period were 56% for males and 54% for females. Table 8 highlights the enrolment by age from 1996 to 2000 according to the Bureau of Statistics.

Table 8

Source: Bureau of Statistics

Public Expenditure on Education According to the ADB, the Government spent 15.9 billion Rupiah (US$ 1.7 billion) on education in 2002. This represented approximately 6.4% of all allocations for governmental agencies and 4.8% of all governmental expenditures in 2002.

Literacy Rates According to UNICEF the adult literacy rate in 2000 was 92% for males and 82% for females. According to the Bureau of Statistics, literacy rates for the overall population 10 years old and above have increase steadily from 1996 at 87.4% to 1999 at 89.8%. Table 9 indicates that approximately 10% of the population aged 10 years and over have not received any formal education.

Table 9

Source: Bureau of Statistics

According to the World Health Organization (WHO), life expectancy at birth in Indonesia is 64.4 years of age for males and 67.4 years old for females. It is estimated by the WHO that three are 16 physicians for every 100,000 people in Indonesia. There are over 34,600 physicians and 108,000 nurses/midwives conducting health services out of 680 public hospitals, 7,237 public health centers, 21,267 sub-centers and 6,400 moving health centers.

Total expenditures on health as a percentage of GDP in 2000 was 2.7% according to the WHO, while general government expenditures on health as a percentage of total general expenditures in 2000 was 3.1%.

According to the WHO, HIV/AIDS prevalence among adults is less than 0.1% of the population. UNAIDS and the Ministry of Health estimate that people living with HIV/AIDS in Indonesia were 52,000 people of which over 13,000 of them were women. There were approximately 3,100 deaths from HIV/AIDS in 1999.

Table 10

Source: Bureau of Statistics

According to the United States Central Intelligence Agency, there were approximately 24 internet service providers in Indonesia in 2000, while the number of internet users is estimated 4.4 million. There are approximately 5.6 million telephone lines in use, with mobile phone of approximately 1.1 million. The internet code for Indonesia is .id.