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Indonesia ECONOMY
Salient Features: Economy transformed from
virtually no
industry in 1965 to production of steel, aluminum, and
cement by
late 1970s. Indonesia exporter of oil; responsible for
about 6
percent of total Organization of the Petroleum Exporting
Countries
(OPEC--see Glossary)
production in 1991. Emphasis in early
1990s on
less government interference in private business and
greater
technology inputs. Agriculture predominates and benefits
from
infusion of modern technology by government. Indonesia
major aid
recipient. Major trade partners Japan and United States;
trade with
ASEAN fellow members increasing.
Gross Domestic Product (GDP): Rp166.3 trillion
in 1989
(estimated; for value of the
rupiah--Rp--see Glossary).
GDP (see Glossary)
annual average growth rate 6 percent in 1985-91.
Agriculture: Declining share (20.6 percent) of
GDP but
employed majority of workers (55 percent of total labor
force) in
1989. Only 10 percent of total land cultivated, another 20
percent
potentially cultivable. Farming by smallholders and on
large
plantations (estates); cropland watered by flooding, and
slash-and-
burn farming used. Rice dominates production but cassava,
corn,
sweet potatoes, vegetables, and fruits important; estate
crops--
sugar, coffee, peanuts, soybeans, rubber, oil palm, and
coconuts--
also important. Green Revolution technological advances
and
increased irrigation improved production in 1970s and
1980s.
Poverty in rural areas of Java, Bali, and Madura partially
ameliorated with government-sponsored
Transmigration Program (see Glossary)
that moved people to more plentiful farmland in
Outer Islands. Animal husbandry, fishing, and forestry smaller
but valuable parts of agricultural sector.
Industry: Increasing share (37 percent in 1989)
of GDP,
but employed only about 9 percent of the work force in
1989. Basic
industries: oil and natural gas processing, cigarette
production,
forestry products, food processing, metal manufactures,
textiles,
automotive and transportation manufactures, and various
light
industries. Nearly 50 percent of production in Java, 32
percent in
Sumatra.
Minerals: Crude petroleum and natural gas
predominant.
About 70 percent (about 500 million barrels valued at US$6
billion
in 1989) of petroleum exported. World's largest exporter
of
liquefied natural gas (20.6 million tons valued at US$3.7
billion
in 1990). Also significant reserves of coal, tin, nickel,
copper,
gold, and bauxite.
Services: Some 29 percent of GDP projected for
1991,
employing about 35 percent of work force in 1989.
Government
service one of fastest growing sources of employment and
with most
educated personnel. Mix of modern government-operated
utilities,
stable private services, and numerous self-employed
operators in
informal, personal services sector. Interisland maritime
transportation crucial; supported by large fleet of
traditional and
modern boats and ships.
Foreign Trade: Principal export trade with
Japan, the
United States, Republic of Korea (South Korea), and
Taiwan. Most
important commodities crude petroleum and petroleum
products;
natural gas (mostly to Japan), natural rubber, clothing,
and
plywood also important. About 25 percent of GDP exported
in 1980s.
Major imports (37 percent of total) from Japan and the
United
States, primarily manufactured products. Growth in trade
with other
ASEAN members in 1980s and early 1990s.
Balance of Payments: Positive trade balance
throughout
1980s despite oil market collapse. 1990 exports US$26.8
billion
versus US$20.7 billion imports. Foreign debt increasing
quickly
(US$1.1 billion in 1989; US$2.4 billion one year later) in
late
1980s and early 1990s.
Foreign Aid: Traditionally important part of
central
government budget. From 1967 to 1991, most coordinated
through
Inter-Governmental Group on Indonesia
(IGGI--see Glossary)
founded
and chaired by the Netherlands; since 1992 without
Netherlands
through Consultative Group on Indonesia
(CGI--see Glossary). Major
CGI aid donors (80 percent) Japan,
World Bank (see Glossary), and
Asian Development Bank (see Glossary).
Exchange Rate: Rupiah (Rp). US$1 = Rp2,060
(January
1993), Rp1,998 (January 1992), Rp1,907 (January 1991).
Fiscal Year: April 1-March 31.
Data as of November 1992
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