Economy of Indonesia

Indonesia is the largest economy in Southeast Asia and a member of the G-20 major economies. Indonesia's estimated gross domestic product (nominal) for 2008 was US$511.7 billion with estimated nominal per capita GDP was US$2,246, and per capita GDP PPP was US$3,979 (international dollars). The services sector is the economy's largest and accounts for 45.3% of GDP (2005). This is followed by industry (40.7%) and agriculture (14.0%).[87] However, agriculture employs more people than other sectors, accounting for 44.3% of the 95 million-strong workforce. This is followed by the services sector (36.9%) and industry (18.8%).[88] Major industries include petroleum and natural gas, textiles, apparel, and mining. Major agricultural products include palm oil, rice, tea, coffee, spices, and rubber.

Indonesia's main export markets (2005) are Japan (22.3%), the United States (13.9%), China (9.1%), and Singapore (8.9%). The major suppliers of imports to Indonesia are Japan (18.0%), China (16.1%), and Singapore (12.8%). In 2005, Indonesia ran a trade surplus with export revenues of US$83.64 billion and import expenditure of US$62.02 billion. The country has extensive natural resources, including crude oil, natural gas, tin, copper, and gold. Indonesia's major imports include machinery and equipment, chemicals, fuels, and foodstuffs.
Jakarta, the capital of Indonesia and the country's largest commercial center

In the 1960s, the economy deteriorated drastically as a result of political instability, a young and inexperienced government, and economic nationalism, which resulted in severe poverty and hunger. Following President Sukarno's downfall in the mid-1960s, the New Order administration brought a degree of discipline to economic policy that quickly brought inflation down, stabilized the currency, rescheduled foreign debt, and attracted foreign aid and investment. Indonesia is Southeast Asia's only member of OPEC, and the 1970s oil price raises provided an export revenue windfall that contributed to sustained high economic growth rates. Following further reforms in the late 1980s, foreign investment flowed into Indonesia, particularly into the rapidly developing export-oriented manufacturing sector, and from 1989 to 1997, the Indonesian economy grew by an average of over 7%.

Indonesia was the country hardest hit by the East Asian financial crisis of 1997–98. Against the US dollar, the Rupiah dropped from about Rp. 2,600 to a low point of 14,000, and the economy shrank by 13.7%. The Rupiah has since stabilised in the Rp. 8,000 to 10,000 range, and a slow but significant economic recovery has ensued. However, political instability, slow economic reform, and corruption at all levels of government and business, have slowed the recovery. Transparency International ranked Indonesia 143rd out of 180 countries in its 2007 Corruption Perceptions Index. The rank dropped to 111st out of 180 in 2009 GDP growth, however, exceeded 5% in both 2004 and 2005, and is forecast to increase further. This growth rate, however, was not enough to make a significant impact on unemployment, and stagnant wages growth and increases in fuel and rice prices have worsened poverty levels. As of 2006, an estimated 17.8% of the population was living below the poverty line, defined by the Indonesian government as purchasing power parity of US$1.55 per day (household income). According to the 2006 estimates, nearly half of the population was living on less than US$2 per day. In recent years, the strongest growth rates since the Suharto years have helped the unemployment rate decline to 8.46% in 2008, and in comparison to its neighbours, Indonesia has been less affected by the recent global recession.