Indonesia: Coping with Economic and Political Instability

Indonesia is a Southeast Asian archipelago consisting of some 17,500 equatorial islands (6,000 of which are inhabited) stretching in an east–west direction over 5,000 kilometers. It has a land area of 1.83 million square kilometers; in 2000 this supported a population of 203.5 million (the fourth largest in the world), which is growing at about 1.4 percent per annum. While the overall population density is about 111 persons per square kilometer, 59 percent of the population lives on the island of Java, which has a population density of 944 persons per square kilometer. The overall ratio of urban to rural population was about 40:60 in 1999 (22:78 in 1980). The Asian financial crisis that began in 1997 affected Indonesia severely: its economy shrank by around 15 percent between 1997 and 1998. Since then, modest growth has resumed, but at substantially lower growth rates than those recorded in the decades prior to the crisis. The global rankings published in the 'World Development Report for 1999' (World Bank 2001) placed Indonesia 143rd of 206 economies in terms of real gross national product (GNP) per capita.