Indonesia comprises over 17,000 islands and with an estimated population of around 237 million people, is the world's fourth most populous nation and the world's third largest democracy. There are approximately 336 distinct recognised cultures that share more than 250 spoken languages. The lingua franca, Bahasa Indonesia, was adopted only 77 years ago. Indonesia's $433 billion economy is the largest in Southeast Asia. Its exports, which totaled $136.8 billion in 2008, are commodity driven and largely comprise oil, natural gas, crude palm oil, coal, appliances, textiles, and rubber.
Indonesia is part of the Association of Southeast Asian Nations, or Asean, which has a free-trade agreement among its ten members and has also signed trade pacts with Australia, New Zealand and Japan.
This administration had emphasized the need to boost economic growth and investment, create a more pro business environment, create jobs and stamp out corruption, which historically raised producers' costs and deterred investment. The administration has been largely successful in achieving many of these objectives which have resulted in a more stable currency, stronger current account surpluses and strong GDP growth, reaching 6.3% in 2007, (close to the fastest pace in 10 years) and 6.1% in 2008. Much of the growth was largely driven by record commodity exports.
Improved fiscal responsibility has allowed the government more flexibility in responding to the recent economic slowdown and has allowed it to cut the policy lending rate to 6.50%, down from as high as 12.75% in December 2005. The economy grew at a better than expected 4.4 percent in the first quarter from a year earlier, compared with a 6.2 percent contraction for Malaysia and Thailand's 7.1 percent slump. Moody's gave the country a stable rating in January and the IMF recently upgraded its rating for the country/economy in its latest assessment.
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In the parliamentary elections held in early April 2009, the ruling Democratic Party increased its seats in parliament almost threefold. This increase in support allows the government greater ability to push through stronger structural reforms than were previously possible due to its being less reliant on coalition partners than in the previous parliament. In the presidential election held in July 2009, Mr Yudhoyono, the first Indonesian president to be directly elected in 2004, was also the first president to re-elected for a second term garnering 60.8% of votes cast.
Although the bombings in Jakarta in July have once again highlighted the terrorist threat in Indonesia, it is no longer the weak spot in South-East Asia's fight against terrorism. In its sustained campaign against terrorists, its American-trained specialist police have closed down JI cells, arrested hundreds of suspects and sent suspects to trial, so that Indonesia's overwhelmingly Muslim population can see justice being done.
