Indonesia The Land of A Thousand Kings Matt Boroweic & Frank Lomuscio

Over 17,000 islands… Indonesia is the most archipelagic nation in the world, only 6,000 of the 17,000 thousand island are inhabited! Ownership passed around due to trading and wars between imperialist nations Taken over by Japan during WWII, mainly due to fuel resources Declared independence on August 17 th, 1945 after Japan was defeated Until 1966, a bloody process of union then non-union with the Dutch took place Eventually in 1966, a fledging nationalist named Sukarno was named president for life

How she developed Being a post WWII nation in Asia meant Indonesia was a figurative baby that had to develop quickly Sukarno struggled with the threat of a military coup, although his policies were widely popular and was eased out of office by the army chief of staff Suharto The military stepped up their role in national affairs, and Western relations were improved From 1950 to 1970, GDP per capita improved from 840 to 1504 (1990 dollars) Comparably, nations such as Thailand and Japan saw a similar margin of growth to their GDP per capita Although Indonesia was young and developing, she still saw impressive growth in early years

The wheels start rolling downhill In the summer of 1997, the economy took a downturn Along with other Asian nations, the banks failed to hold up their credit and the currency plummeted The masses protested against the government and Suharto stepped down from office after 32 years There was a sense of stability during Suharto’s rule Since Indonesia is a archipelago, there were significant ethnic and religious differences between all the different peoples spread out living there The vast differences between these peoples is what was referred to as unity in diversity However, tensions increased after Suharto stepped down, most notably in East Timor where the population was mainly catholic that wanted independence

Their status now After the 1997 financial crisis, there was low investor confidence Bank reform and other internal development measures were very slow to come about Additionally, the resources Indonesia relies on so heavily to export were disproportionately benefitting Java due to decentralization policies Politically, there have been Secessionist movements in different provinces In 2014, the new president Joko Widodo has been dealt a low hand He is still dealing with a nation reeling from a crisis that took place over 15 years ago and hasn’t had any substantial development The uphill battle of allocating fuel subsidies (in the budget) to other necessities of the Indonesia peoples is what Widodo wants to implement The people of Indonesia are an interesting group of people to lead Many still live under the poverty line and find their livelihood in agriculture, tourism, etc

Infrastructure One of the biggest issues Indonesia is facing. Years of neglect led to dilapidated ports, roads, water facilities, and power plants. Goods take longer to reach their destination in Indonesia than anywhere else in Asia – World Bank Poor education system has caused a shortage in the skills necessary to fix this problem.

Infrastructure Continued Slowing growth is compounding these problems. Growth is too low to supply jobs for the young people about to enter the job market. Population of about 250 million, 43% are under 25. “Improved infrastructure is vital for long-term growth and competitiveness of emerging economies” – Sarvesh Suri, IFC Indonesia Country Manager New infrastructure will create new jobs and increase foreign investment in Indonesia’s economy.

Indonesia’s Plan Indonesia’s plan includes constructing several power plants and over 1000 kilometers of toll roads. Estimated cost is $150 billion over next five years. Government can only fund 30% of this bill. Indonesia has invited the private sector to fund and contribute to infrastructure projects.

Foreign Investment Indonesia has eased regulations to make the infrastructure sector more investor friendly. China Railway Construction Corp. planning to build 30 km bridge between Sumatra and Java. Japan’s J-Power consortium will be building a power plant in Central Java supplying electricity for 8 million people. IFC also invested 20% of $150 billion cost of Indonesian infrastructure projects.