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Indonesia

island country in Southeast Asia and Oceania

Indonesia

Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian and Pacific oceans. Comprising between 13,000 and 17,000 islands—including Sumatra, Java, Sulawesi, and parts of Borneo and New Guinea—it is the world's largest archipelagic state and the 14th-largest country by area. Indonesia has extensive tropical forests and marine ecosystems that support some of the world's highest levels of biodiversity.

The Indonesian archipelago has been inhabited since prehistoric times, with early human presence evidenced by fossils of Homo erectus and Homo sapiens, and megalithic sites. It became connected to regional and international maritime trade networks by the first millennium BCE. Hindu and Buddhist kingdoms developed by early centuries CE, followed by the spread of Islam and the growth of Islamic states from the late medieval period. European powers later competed to monopolise trade in the Spice Islands of Maluku during the Age of Discovery. Dutch commercial and colonial control expanded from the 17th century and was consolidated over most of the archipelago during the 19th and early 20th centuries, before Indonesia proclaimed its independence in the aftermath of World War II.

Since independence, Indonesia has experienced separatist conflicts, corruption, political upheaval and natural disasters, alongside democratisation and rapid economic growth. The country today is a presidential republic with an elected legislature and consists of 38 provinces, some of which enjoy greater autonomy than others. Home to over 280 million people, Indonesia ranks fourth in the world by population and has the largest Muslim population of any country. More than half of Indonesians live on Java, the most heavily populated island in the world, while the capital Jakarta is the world's most populous city.

There are hundreds of ethnic groups and more than 700 languages, as well as diverse regional cultures. This diversity is reflected in the national motto, Bhinneka Tunggal Ika, meaning "unity in diversity". Indonesian, a standardised variety of Malay, is the official and national language and its lingua franca. Indonesia has the largest economy in Southeast Asia, with services and industry accounting for most output and economic activity concentrated on Java. Sea and air transport are the primary means of connecting the country's many islands. Indonesia is a middle power active in regional and global affairs and is a member of the United Nations, G20, the Non-Aligned Movement, ASEAN, and the Organisation of Islamic Cooperation.

Etymology

The name Indonesia is usually explained as a combination of India and the Greek word nesos, together meaning 'Indian islands'. In 1850, George Windsor Earl, an English ethnologist, proposed the terms Indunesians and Malayunesians for the inhabitants of the "Indian Archipelago or Malay Archipelago", preferring the latter because he considered Indunesians too general. In the same journal, James Richardson Logan adopts Indonesia as a geographical term for the Indian Archipelago.

Usage remained limited for several decades. German ethnographer Adolf Bastian from the University of Berlin gave the term greater scholarly currency by using it in the title of his five-volume work Indonesia, or the Islands of the Malay Archipelago (German: Indonesien oder die Inseln des Malayischen Archipel), published from 1884 to 1894. Dutch scholars nevertheless tend to use Malay Archipelago (Dutch: Maleische Archipel) or the Netherlands East Indies (Nederlandsch Oost Indië). Popular alternatives include Indië, de Oost ("the East"), and, less often, Insulinde.

After 1900, Indonesia became increasingly common in academic and public usage, and Indonesian nationalist organisations adopted it as an expression of national unity and freedom from colonial rule. Among its early Indonesian promoters was Soewardi Soerjaningrat (Ki Hajar Dewantara), who established the Indonesisch Persbureau in The Hague in November 1918, a press bureau that used Indonesia in its name.

History

=== Prehistory, early states, and Islamisation ===

The island of Java has yielded numerous hominin fossils generally attributed to Homo erectus, including the type specimen discovered by Eugène Dubois at Trinil. Stone artefacts on Flores show that hominins had reached the island by at least 1.02 million years ago. Homo sapiens had dispersed into Southeast Asia by at least 50,000 years ago. In Sulawesi, narrative cave art has been dated to a minimum age of 51,200 years. Flores also yielded remains of the small-bodied hominin Homo floresiensis. Megalithic traditions later developed at different times across the archipelago, and stone monuments were used for burial and to honour or commemorate ancestors.

Beginning in the third millennium BCE, Austronesian-speaking communities moved south from Taiwan through the Philippines and into the Indonesian archipelago, where related languages spread across most of the islands. Settlement and subsistence patterns varied across the islands, with communities combining fishing, hunting, gathering, and cultivation. From around 500 BCE, regional trading networks increasingly connected the archipelago with South and East Asia. Imported goods, knowledge, and technologies circulated through these networks, and during the early centuries CE some coastal communities in Borneo, Sumatra, and Java developed into trading ports. Indian merchants and religious specialists brought Sanskrit literacy, Hindu and Buddhist practices, and models of kingship that local rulers adopted.

Srivijaya, founded in southeastern Sumatra in the late 7th century, grew as a maritime trading polity and a centre of Buddhist learning and religious networks. In central Java, rulers supported the construction of major Hindu and Buddhist monuments between the 8th and 10th centuries, including Borobudur and Prambanan. Majapahit emerged in eastern Java in the late 13th century after Raden Wijaya used a Mongol expedition to defeat his rivals and then forced the Mongols to withdraw. Its rulers claimed suzerainty over a wide network of ports across the archipelago, although beyond Java this authority was often exercised indirectly through tributary, ritual, and commercial relationships rather than continuous territorial control.

By the late 13th century, Muslim rulers were established in parts of northern Sumatra. Perlak, Aceh is described by Marco Polo as Muslim in 1292, and a royal tomb at Pasai dated 1297 records a Muslim ruler there. Samudra-Pasai became an important pepper port and a major centre for Islamic learning. Islam spread further through maritime trading networks, with Muslim communities becoming established at ports along Java's north coast and elsewhere in the archipelago. Majapahit declined during the 15th century, and Demak emerged as an independent north-coast sultanate and an important centre of Javanese Islam. Early conversions were associated with the Wali Sanga, the nine saints traditionally credited with the spread of Islam in Java. Islamic practice there also incorporated elements of older Javanese culture.

European contact and colonial rule

Before European arrival, spices from Maluku were already traded through Asian maritime networks in which Javanese and other regional merchants participated. The Portuguese captured Malacca in 1511 and reached Maluku the following year, where they sought control of the spice trade. Dutch expeditions followed in the 1590s, and in 1602 competing Dutch companies were merged into the Dutch East India Company (Vereenigde Oost-Indische Compagnie, VOC). Its charter authorised it to wage war, build fortresses, and conclude treaties in Asia. In 1619, the VOC captured Jayakarta (present-day Jakarta), renamed it Batavia, and turned it into its headquarters. It developed as an administrative and commercial centre and attracted Chinese migrants and others from the archipelago. The VOC was dissolved in 1800, and its possessions were passed to the Dutch state.

During the 19th century, Dutch power expanded across the archipelago and met sustained resistance in Java, Sumatra, Bali, and Aceh. In western New Guinea, the Dutch established an outpost in 1828 but abandoned it in 1836 and began permanent occupation only after 1898. By the early 20th century, military campaigns and boundary agreements had established Dutch control over the Netherlands Indies. The colonial administration ruled several territories directly and governed others through local states whose rulers retained limited authority under Dutch supremacy.

The Ethical Policy became an official programme in 1901 and expanded vernacular schooling, irrigation, and other public services. Western-style schooling also expanded, but it reached only a small minority of the population. During this period, several political organisations were founded, including Budi Utomo in 1908 and Sarekat Islam in 1912, followed by the Communist Party of Indonesia (PKI) in 1920 and the Indonesian National Party in 1927. The Great Depression reached the colony in the early 1930s, bringing severe economic hardship and increasing fears among colonial authorities that discontent could strengthen radical nationalist movements. Restrictions on nationalist activity became stricter, and by the mid-1930s, Sukarno, Mohammad Hatta, Sutan Sjahrir, and other non-cooperative nationalist leaders had been imprisoned or exiled.

Emergence of Indonesia and independence

A shared national identity began developing through youth associations and a growing literature in the Malay language, which had long been a lingua franca that did not favour any single ethnic group. Nationalists increasingly called the language Bahasa Indonesia and made it a common medium for the emerging nation. At the Second Youth Congress in Batavia in October 1928, delegates pledged allegiance to one homeland and one nation, Indonesia, and recognised Indonesian as the "language of unity".

Dutch colonial rule collapsed when Japan conquered the colony in 1942. Japanese occupation imposed martial law, banned political parties, and mobilised Indonesians through Japanese-sponsored civil and quasi-military organisations. Wartime shortages and forced labour caused widespread hardship, but the ban on the Dutch language strengthened the public use of Indonesian. Japanese-sponsored forces such as PETA and the Sumatran Giyugun trained tens of thousands of Indonesians. A day after the atomic bombing of Hiroshima, Japanese authorities permitted Indonesian leaders to begin preparing institutions and a constitution for an independent state planned for September 1945.

However, Japan surrendered to the Allies on 15 August 1945. Two days later, Sukarno proclaimed Indonesian independence, with Hatta co-signing the declaration. They were named president and vice-president on 18 August. Dutch attempts to restore colonial rule led to a four-year military and diplomatic struggle. International opposition to the Netherlands intensified after its offensive of December 1948, and the United States subsequently pressed the Dutch into negotiations recommended by the United Nations. On 27 December 1949, the Netherlands transferred sovereignty to the federal United States of Indonesia, except over western New Guinea. The federal states dissolved, and a unitary republic was proclaimed on 17 August 1950.

Sukarno era and Suharto's New Order

Indonesia adopted parliamentary government under the 1950 provisional constitution. The 1955 election produced no durable governing majority and did not end the persistent political crisis. In February 1958, dissidents in West Sumatra proclaimed its own government before being joined by rebels in Sulawesi. They were seeking reforms to the republic rather than separation but were defeated by the central government. After the Constituent Assembly failed to secure the required majority for a permanent constitution, Sukarno dissolved it by decree in 1959 and restored the 1945 Constitution. This established the Guided Democracy, a system characterised by dominant presidential authority, less regional autonomy and reduced role for political parties.

Under this system, Sukarno expanded the military's political role while supporting the growing PKI as a counterweight. His campaign against Dutch rule in western New Guinea led to the New York Agreement in 1962 and Indonesian administration of the territory in 1963. After the 30 September Movement killed six generals in 1965, army general Suharto's forces took control of Jakarta, and the military presented the movement as a PKI coup. The ensuing anti-communist campaign spread across several regions, with army units working alongside or directing civilian groups. At least 500,000 people were killed, and hundreds of thousands were detained. The campaign destroyed the PKI and shifted power to the army. The Supersemar order in 1966 gave Suharto de facto control over key executive and security powers, an effective transfer of power from Sukarno.

Suharto's New Order restricted political organisation, embedded the military in government, and used his political party Golkar and a tightly controlled party system to dominate elections. The Act of Free Choice in 1969 formally incorporated western New Guinea into Indonesia. However, just over a thousand selected community leaders took part in it amid reports of military intimidation. Many Papuans opposed this integration and have waged an armed resistance since then. In 1975, Indonesia invaded Portuguese Timor and annexed the territory the following year. Hasan di Tiro founded the Free Aceh Movement in 1976 and declared independence from Indonesia. The insurgency in Aceh was largely suppressed by 1979 but revived in 1989 after the return of fighters trained in Libya, prompting a decade-long military campaign.

The New Order reopened the economy to foreign capital and pursued industrialisation through investment, foreign aid, and state development plans. Manufacturing expanded, and the number of people below the official poverty line fell substantially by the mid-1990s. At the same time, conglomerates connected to Suharto's family and close associates accumulated wealth through state patronage and political protection. The Asian financial crisis of 1997–98 caused a sharp economic downturn, followed by protests and riots in May 1998, culminating in Suharto's resignation. In a UN-supervised referendum in 1999, a majority of people in East Timor voted against remaining part Indonesia; East Timor became the independent country of Timor-Leste in 2002.

Reformasi and contemporary Indonesia

The period after Suharto, known as Reformasi, brought constitutional amendments, competitive elections, and decentralisation. The military lost its reserved parliamentary seats, and the police became a separate service, but military influence did not disappear. Democratic institutions were established, but patronage and influence of oligarchy persisted. Former general Susilo Bambang Yudhoyono won the first direct presidential election in 2004. His administration reached a peace agreement with Aceh separatists in 2005 after the previous year's Indian Ocean tsunami brought more international attention to the province. Sporadic bombings occurred throughout the 2000s but had declined by the early 2010s.

Joko Widodo, popularly called Jokowi, was elected president in 2014 and prioritised infrastructure and economic development, which he linked to improving welfare. Indonesia remained an electoral democracy, but the quality of its democracy declined amid weakened parliamentary opposition and oversight, curbs on dissent, reduced independence of the anti-corruption commission, and Jokowi's intervention in the 2024 election. Under his successor Prabowo Subianto, the government pursued a fiscally expansive programme and revised a military law in 2025, which allowed more active officers to serve in civilian posts.

Geography

Indonesia is an equatorial archipelago of coastal plains, mountains, and volcanic islands. It lies between latitudes 11°S and 6°N and longitudes 95°E and 141°E, and is the world's largest archipelagic state, extending 5,120 kilometres (3,181 mi) from east to west and 1,760 kilometres (1,094 mi) from north to south. Several straits, including Malacca, Sunda, and Lombok, carry international traffic between the Indian and Pacific oceans, including ships transporting energy supplies and commercial cargo.

The quantity of islands varies by counting method, with published figures ranging from 13,466 named islands to more than 17,500. About 922 of them are permanently inhabited. Its five main islands are Sumatra, Java, Sulawesi, Borneo, and New Guinea. Indonesia occupies most of Borneo, where it is known as Kalimantan, and the western part of New Guinea, commonly called Papua. The remainder of those islands is shared with Brunei and Malaysia, and with Papua New Guinea, respectively.

Java accounts for less than 7% of Indonesia's land area but is its most populous island, with intensive farming and extensive urban growth. Forest cover differs widely, with larger forested areas in Papua and Maluku than in Java and Bali. At 4,884 metres (16,024 ft), Puncak Jaya on New Guinea is the highest peak, while Lake Toba on Sumatra is the largest lake. In Kalimantan, major waterways like the Kapuas, Barito, and Mahakam rivers have historically served as corridors for movement and trade between communities in the interior and those near the coast.

Indonesia occupies a complex plate-boundary zone where the Eurasian, India-Australia, and Pacific-Philippine sea tectonic plates interact, with subduction zones along these boundaries producing frequent earthquakes and volcanic activity. The resulting volcanic belt contains roughly 400 volcanoes, around 130 of which are considered active. This tectonic setting exposes the archipelago to major earthquake and tsunami hazards. The Sumatra earthquake in 2004 generated a tsunami that caused widespread destruction in Aceh. The Toba super-eruption about 74,000 years ago is one of the largest known explosive eruptions in Earth's history, and the 1815 eruption of Mount Tambora was followed by global cooling and the Year Without a Summer in 1816.

Climate

Indonesia's equatorial position and monsoon winds give it a tropical climate. Most lowland areas are warm and humid throughout the year, while higher terrain is cooler, and seasonal temperature differences are small. Seasonal changes in the monsoon generally bring wetter conditions from November to April and drier conditions from May to October, but their timing and intensity vary by region. Much of the country has a tropical rainforest climate, with tropical monsoon and savanna climates across parts of the islands. Seasonal rainfall helps set rice-planting calendars and influences droughts, floods, and fires.

Western Sumatra, western Java, and portions of Kalimantan and Papua receive the highest annual rainfall, whereas regions in closer proximity to Australia—such as Nusa Tenggara—experience a significantly drier climate. The surrounding oceans, island geography, monsoon winds, and topography all affect where and when rain falls. In drought-prone regions of the country, El Niño can suppress rainfall and prolong dry periods, causing water shortages and crop losses.

Indonesia already faces climate-related hazards. Climate projections indicate further warming and sea-level rise, changes in rainfall patterns, and greater risks from extreme heat and flooding. These changes affect agriculture, water resources, public health, coastal settlements, and wildfire management. Sea-level rise is especially relevant to coastal areas, where much of the population and infrastructure are located. Evidence from Pekalongan in Central Java suggests that households with fewer economic resources and communities with weaker infrastructure may have less capacity to adapt.

Biodiversity and conservation

Indonesia is among the 17 countries identified as megadiverse by Conservation International. Its many islands and geological past have helped produce a diverse flora and fauna. Wallacea is a transition zone between Asian and Australian fauna and one of the world's largest centres of endemism. In 2015, an estimated 83% of Southeast Asia's old-growth forest was in Indonesia. Mangrove forests, coral reefs and seagrass beds make up much of the coastal ecosystems.

Large oil-palm and timber plantations were estimated to account for more than 40% of national deforestation between 2001 and 2016. Conversion of forest land for farming, roads, and other development breaks up remaining habitat, which affects species populations, habitat quality, and biodiversity. Peat-swamp forests are important carbon stores and habitat for threatened taxa but are vulnerable to logging, fire and land conversion. In the ocean, coral diversity has been found lower on polluted or anchor-damaged reefs, and coral cover has declined sharply under extreme, prolonged ocean heat.

Indonesia has designated 554 protected areas covering 27 million hectares, equivalent to 14% of its land area. Assessments conducted in 2015, 2017 and 2019 found improved management scores, but identified poaching, illegal logging, human settlements, tourism and non-timber cultivation as the main threats to protected areas. In Papua, research around the Cyclops Mountains protected area found limited consultation with nearby communities and implementation problems linked to scarce resources.

Government and politics

Indonesia is a unitary republic with a presidential system under the 1945 Constitution. The constitution's five principles of Pancasila are taught through civic education. After the fall of the New Order in 1998, four constitutional amendments between 1999 and 2002 altered the political system by introducing direct presidential elections, establishing new state institutions, reducing role of the People's Consultative Assembly (MPR), and giving regional autonomy a constitutional basis. Indonesia remained a unitary state, while decentralisation transferred substantial powers to the provinces, districts, and cities.

The president is head of state, head of government, and commander-in-chief of the Indonesian National Armed Forces, and may serve no more than two five-year terms. The MPR consists of elected members of the House of Representatives (DPR) and the Regional Representative Council (DPD). The MPR may amend the constitution, inaugurates the president and vice president, and may dismiss them under constitutional procedures. The DPR makes laws with the president, approves the state budget, and oversees the government. The DPD may propose, review, and advise on bills concerning regional government but has less authority than the DPR.

The legal system belongs primarily to the civil-law tradition, while also incorporating customary (adat) law and Islamic law, including in marriage and inheritance matters for Muslims. Judicial power is exercised by the Supreme Court, the courts beneath it, and the Constitutional Court. The Supreme Court acts as the final appellate court and reviews regulations below statutes. The Constitutional Court reviews statutes for constitutionality and decides disputes over state-institution powers, political party dissolution, and election results. It also has a role in presidential impeachment proceedings. The Religious Courts hear marriage, divorce and inheritance cases, as well as certain economic disputes arising under Islamic law. The Judicial Commission proposes candidates for Supreme Court justices and has responsibilities concerning judicial conduct.

Parties and elections

Since the return to competitive elections in 1999, Indonesia has had a fragmented multi-party system. No party has won a majority in legislative elections, and presidents have usually governed through broad coalitions that include many parties in the legislature and cabinet.

Political parties are often distinguished by their orientation toward secular nationalism or political Islam, but governing coalitions commonly include both. Party politics often relies more on patronage and elite power-sharing than detailed policy programmes, although the role of Islam in public life is a source of ideological difference. Opposition parties have at times joined presidential power-sharing arrangements after elections.

Indonesia held its first general election in 1955. Since 2004, voters have directly elected the president, the DPR, and the DPD every five years. Members of the DPR are elected through party-based contests, while DPD candidates run as individuals to represent provincial constituencies. National elections require large-scale logistics, as ballots and other materials must reach remote islands, mountain areas, and places with limited infrastructure.

Administrative divisions

Indonesia is a unitary state divided into provinces, regencies, and cities, each with elected regional authorities regulated by law. Provinces are headed by governors and have provincial legislatures. Regencies and cities are headed by regents and mayors and have local legislatures. Below regencies and cities are districts, which are divided into villages. Rural villages have self-governing status, while urban villages form part of district administration.

Regional autonomy after 1998 transferred substantial powers to subnational governments, including the provinces. Special arrangements apply to nine of them: Aceh may apply aspects of Islamic law, the six provinces in Papua have special autonomy, and Yogyakarta retains a hereditary sultanate. Jakarta has autonomy as the national capital. Since 2022, Nusantara in East Kalimantan has been planned as the future national capital.

Foreign relations and military

Indonesia follows an "independent and active" (bebas aktif) foreign policy, a doctrine formulated by Vice President Mohammad Hatta in 1948. The policy has emphasised non-alignment and independent action, along with a preference for diplomacy over military means in advancing regional objectives. As a middle power, Indonesia works through regional and multilateral institutions while preserving room to manoeuvre in its relations with major powers.

As a founding member of the Association of Southeast Asian Nations (ASEAN), Indonesia places the organisation at the centre of its regional diplomacy, including in managing relations with major powers. Indonesia has broad bilateral ties with Malaysia and Singapore, including cooperation in economic, defence, and cultural fields. Relations with Australia are conducted through a Comprehensive Strategic Partnership covering several areas, including economic development and regional stability. On China–United States competition, Indonesia has avoided alliances and taking sides, emphasised an ASEAN-led regional approach, and sought to limit escalation.

Indonesia has been a member of the United Nations since 1950, apart from an absence in 1965–66. It participates in multilateral forums including the Non-Aligned Movement, the Organisation of Islamic Cooperation, and the East Asia Summit. After decades as a major recipient of foreign aid, Indonesia has been providing development assistance since 2015 and established a foreign aid agency in 2019. Since 1957, it has sent military and police personnel to UN peacekeeping missions.

The Indonesian National Armed Forces consists of the Army, Navy, and Air Force. The Army's territorial units extend across provincial and regency/city areas. Until its termination in 2000, the military's "dual function" (dwifungsi) doctrine provided a basis for involvement in political affairs alongside its security role. By 2004, reforms had ended unelected military representation in Parliament and removed the military faction from the MPR. A 2024 study found that cooperative parliamentary oversight had helped stabilise civil–military relations but also slowed further reform and weakened democratic management of defence.

Law enforcement and human rights

Law enforcement is primarily carried out by the Indonesian National Police. Duties include maintaining public order and security, protecting and serving the public, and enforcing the law. The Chief of the Indonesian National Police is directly responsible to the president.

The National Commission on Human Rights (Komnas HAM) is authorised to investigate human rights violations. Accountability for past abuses has been limited. In 2024, the United Nations Human Rights Committee noted that only 4 of 16 violations investigated by Komnas HAM had reached the courts. Indonesia practices the death penalty but has not executed anyone since 2016.

Anti-Chinese racism has persisted despite the removal of most discriminatory policies after the New Order. Since 2016, anti-LGBTQ campaigns have included hostile statements by public officials, police raids and proposals for criminal restrictions. Religious minorities have also been affected by the country's blasphemy law. In Papua, human rights monitors have reported extrajudicial killings and disappearances, restrictions on peaceful expression, and displacement due to security operations and armed conflict.

Economy

Indonesia has a mixed economy in which the private sector and the government both have large roles. It is the only G20 member state in Southeast Asia. In 2025, gross domestic product was Rp23.821 quadrillion (US$1.45 trillion) at current prices, making it Southeast Asia's largest economy and placing it among the world's top 20 by nominal GDP and top 10 by GDP at purchasing power parity. Services and industry account for the largest shares of gross domestic product, while agriculture remains a major source of employment.

The economy was once largely agricultural, and early post-independence policy centred on agricultural self-sufficiency. Shift towards industrial and urban growth gathered pace from the late 1960s, and sped up in the 1980s as lower oil prices pushed the economy toward manufactured exports. Export-oriented manufacturing expanded from the mid-1980s to the mid-1990s, during a period of strong economic growth and declining poverty. The Asian financial crisis of 1997–98 caused a severe contraction, but growth resumed in 1999 and was followed by reforms to banking, fiscal policy and the exchange-rate regime.

Consumer spending makes up a large share of GDP, along with population growth, urbanisation and an expanding consuming class. Domestic demand helped soften the effect of the 2008 financial crisis, while exports, public consumption and private consumption contributed to recovery after the COVID-19 pandemic. Informal employment is widespread, particularly in agriculture and low-skilled services. Informal firms tend to have lower productivity and pay, and workers outside the bigger firms have more limited access to social insurance. Businesses also have to contend with corruption, burdensome and sometimes conflicting local regulations, in addition to unreliable infrastructure such as power outages and congested roads. The official poverty rate was about 8% in March 2026.

The many islands affect where economic activity takes place and how goods move across the country. Economic activity is concentrated on Java, with Jakarta in particular accounting for a disproportionate share of national output. Meanwhile, much of eastern Indonesia has weaker infrastructure and economies more dependent on agriculture. High domestic transport costs hinder production and investment outside Java and make it harder to connect producers in the outer islands with major markets.

Tourism is a major service industry, generating about US$14 billion in foreign-exchange earnings and recording 11.6 million international visitor arrivals in 2023. Tourism-related jobs and enterprises include accommodation, food services, passenger transport, travel agencies and other activities. International tourism is concentrated in Bali and other major gateways, while domestic travellers account for most tourism spending.

Indonesia spends little on research and development, with limited private-sector involvement and weak coordination in government. Indonesian Aerospace is involved in aircraft design and the development and manufacture of civilian and military regional commuter aircraft. The Palapa domestic satellite system extended communications to remote parts of Indonesia through a network of earth stations and was also used to distribute television and radio programmes.

Natural resource industries affect both investment and economic growth, which can rise or fall with commodity prices. Policies since 2020 have encouraged more processing of commodities at home, particularly nickel. Exports include coal and petroleum gas, as well as palm oil, coffee and spices. Its main trading partners are mostly in Asia, with the United States also among the largest. Indonesia takes part in regional economic cooperation through ASEAN and APEC and is integrated into the wider global economy.

Infrastructure

=== Transport and connectivity ===

Road transport is the predominant mode of transport in Indonesia. Reliance on cars and motorcycles is high because public transport in many cities has not kept pace with urban growth. Rail transport is concentrated on Java, but new lines have recently begun operating in South Sulawesi. The Jakarta–Bandung high-speed railway, the first of its kind in the region, began commercial operations in 2023.

Maritime and air networks are important for linking population centres across the country. Connectivity is weaker in eastern Indonesia, where higher logistics costs contribute to regional price differences. In the telecommunications sector, the Palapa Ring project uses terrestrial and submarine fibre as a core national internet network, but there are service gaps in some remote regions.

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