economy of Indonesia

{{Main|Economic history of Indonesia}}

In the years immediately following the proclamation of Indonesian independence, both the Japanese occupation and the conflict between Dutch and Republican forces had crippled the country's production, with exports of commodities such as rubber and oil being reduced to 12 and 5% of their pre-WW2 levels, respectively.{{cite journal |last1=Lindblad|first1=J. Thomas|title=Macroeconomic consequences of decolonization in Indonesia|journal=XIVth Conference of the International Economic History Association|date=2006 |url=http://www.helsinki.fi/iehc2006/papers1/Lindblad.pdf |access-date=18 August 2017|location=Helsinki|archive-url=https://web.archive.org/web/20130811000608/http://www.helsinki.fi/iehc2006/papers1/Lindblad.pdf |archive-date=11 August 2013|url-status=dead}} The first Republican government-controlled bank, the Indonesian State Bank (Bank Negara Indonesia, BNI) was founded on 5 July 1946. It initially acted as the manufacturer and distributor of ORI (Oeang Republik Indonesia/Money of the Republic of Indonesia), a currency issued by the Republican Government which was the predecessor of Rupiah.{{cite web|title=History – BNI |url=http://www.bni.co.id/en-us/company/about-bni/history|publisher=BNI |access-date=18 August 2017|archive-date=1 July 2018|archive-url=https://web.archive.org/web/20180701222313/http://www.bni.co.id/en-us/company/about-bni/history|url-status=dead}} Despite this, currency issued during the Japanese occupation and by Dutch authorities was still in circulation, and the simplicity of the ORI made its counterfeiting relatively easy, worsening matters.{{cite news|last1=Hakiem|first1=Lukman|title=Hatta-Sjafruddin: Kisah Perang Uang di Awal Kemerdekaan|url=http://www.republika.co.id/berita/jurnalisme-warga/wacana/17/08/09/oue9d2385-hattasjafruddin-kisah-perang-uang-di-awal-kemerdekaan|access-date=18 August 2017|agency=Republika|date=9 August 2017|language=id}} Between 1949 and 1960, Indonesia experienced several economic disruptions. The country's independence recognized by the Netherlands, the dissolution of the United States of Indonesia in 1950, the subsequent liberal democracy period, the nationalization of De Javasche Bank into the modern Bank Indonesia,{{cite journal |last1=Lindblad |first1=J. Thomas |date=2004 | url=http://www.indie-indonesie.nl/content/documents/papers-economic%20side/Makalah-Thomas%20Lindblad.pdf |archive-url=https://web.archive.org/web/20090327003011/http://www.indie-indonesie.nl/content/documents/papers-economic%20side/Makalah-Thomas%20Lindblad.pdf |archive-date=27 March 2009 |url-status=dead | title=Van Javasche Bank naar Bank Indonesia. Voorbeeld uit de praktijk van indonesianisasi | trans-title=From Java Bank to Bank Indonesia: A Case Study of Indonesianisasi in Practice | journal=Tijdschrift voor Sociale en Economische Geschiedenis | volume=1 |pages=28–46 |language=nl}} and the takeover of Dutch corporate assets following the West New Guinea dispute,{{cite journal |last1=van de Kerkhof|first1=Jasper |title=Dutch enterprise in independent Indonesia: cooperation and confrontation, 1949–1958 |journal=IIAS Newsletter|date=March 2005 |volume=36 |url=http://iias.asia/sites/default/files/IIAS_NL36_18.pdf |access-date=18 August 2017|archive-date=18 August 2017|archive-url=https://web.archive.org/web/20170818091528/http://iias.asia/sites/default/files/IIAS_NL36_18.pdf|url-status=dead}} which all resulted in the devaluation of Dutch banknotes into half their value.{{cite web|title=Period of Recognition of the Republic of Indonesia's Sovereignty up the Nationalization of DJB |url=http://www.bi.go.id/en/tentang-bi/museum/sejarah-bi/pra-bi/Documents/89b8c80249714bce8dc84a9ad1bbb1b5MicrosoftWordPeriodofRecognitionoftheRepublicofInd.pdf |publisher=Special Unit for Bank Indonesia Museum: History Before Bank Indonesia|via=Bank Indonesia |access-date=18 August 2017|archive-date=5 October 2019|archive-url=https://web.archive.org/web/20191005041254/https://www.bi.go.id/en/tentang-bi/museum/sejarah-bi/pra-bi/Documents/89b8c80249714bce8dc84a9ad1bbb1b5MicrosoftWordPeriodofRecognitionoftheRepublicofInd.pdf|url-status=dead}}

During the guided democracy era in the 1960s, the economy deteriorated drastically as a result of political instability. The government was inexperienced in implementing macroeconomic policies, which resulted in severe poverty and hunger. By the time of Sukarno's downfall in the mid-1960s, the economy was in chaos with 1,000% annual inflation, shrinking export revenues, crumbling infrastructure, factories operating at minimal capacity, and negligible investment.{{Cite web |title=Sukarno's economic policy left me on the brink of ruin: Mochtar Riady's story (13) |url=https://asia.nikkei.com/Spotlight/My-Personal-History/Sukarno-s-economic-policy-left-me-on-the-brink-of-ruin-Mochtar-Riady-s-story-13 |access-date=2023-03-19 |website=Nikkei Asia |language=en-GB}} Nevertheless, Indonesia's post-1960 economic improvement was considered remarkable when taking into consideration how few indigenous Indonesians in the 1950s had received a formal education under Dutch colonial policies.{{cite book|title=A History of the Global Economy. From 1500 to the Present.|author=Baten, Jörg|date=2016|publisher=Cambridge University Press|isbn=9781107507180|page=292}}

Following President Sukarno's downfall, the New Order administration brought a degree of discipline to economic policy that quickly brought inflation down, stabilized the currency, rescheduled foreign debt, and attracted foreign aid and investment. (See Inter-Governmental Group on Indonesia and Berkeley Mafia). Indonesia was until recently Southeast Asia's only member of OPEC, and the 1970s oil price rise provided an export revenue windfall that contributed to sustained high economic growth rates, averaging over 7% from 1968 to 1981.Schwarz (1994), pp. 52–7.

With high levels of regulation and dependence on declining oil prices, growth slowed to an average of 4.5% per annum between 1981 and 1988. A range of economic reforms was introduced in the late 1980s, including a managed devaluation of the rupiah to improve export competitiveness, and deregulation of the financial sector. Foreign investment flowed into Indonesia, particularly into the rapidly developing export-oriented manufacturing sector, and from 1989 to 1997, the Indonesian economy grew by an average of over 7%.{{cite web|title=Indonesia: Country Brief|work=Indonesia: Key Development Data & Statistics|publisher=The World Bank|date=September 2006|url=http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/INDONESIAEXTN/0,,contentMDK:20095968~pagePK:141137~piPK:141127~theSitePK:226309,00.html}} GDP per capita grew 545% from 1970 to 1980 as a result of the sudden increase in oil export revenues from 1973 to 1979.{{cite web|url=http://earthtrends.wri.org/text/economics-business/variable-638.html|title=GDP info|publisher=Earthtrends.wri.org|access-date=29 August 2011|url-status=dead|archive-url=https://web.archive.org/web/20090220134324/http://earthtrends.wri.org/text/economics-business/variable-638.html|archive-date=20 February 2009|df=dmy }} High levels of economic growth masked several structural weaknesses in the economy. It came at a high cost in terms of weak and corrupt governmental institutions, severe public indebtedness through mismanagement of the financial sector, rapid depletion of natural resources, and culture of favors and corruption in the business elite.{{cite web|url=http://siteresources.worldbank.org/INTINDONESIA/Resources/Publication/03-Publication/Combating+Corruption+in+Indonesia-Oct15.pdf|title=Combating Corruption in Indonesia, World Bank 2003|access-date=29 August 2011|archive-url=https://web.archive.org/web/20050121162752/http://siteresources.worldbank.org/INTINDONESIA/Resources/Publication/03-Publication/Combating+Corruption+in+Indonesia-Oct15.pdf|archive-date=21 January 2005|url-status=dead}}

Corruption particularly gained momentum in the 1990s, reaching to the highest levels of the political hierarchy as Suharto became the most corrupt leader according to Transparency International.{{cite web|url=http://www.transparency.org/publications/gcr/gcr_2004|title=Transparency International Global Corruption Report 2004|publisher=Transparency.org|access-date=29 August 2011|url-status=dead|archive-url=https://web.archive.org/web/20110902223424/http://www.transparency.org/publications/gcr/gcr_2004|archive-date=2 September 2011}}{{cite news|url=http://news.bbc.co.uk/2/hi/3567745.stm|title=Suharto tops corruption rankings|work=BBC News|date=25 March 2004|access-date=29 August 2011}} As a result, the legal system was weak, and there was no effective way to enforce contracts, collect debts, or sue for bankruptcy. Banking practices were very unsophisticated, with collateral-based lending the norm and widespread violation of prudential regulations, including limits on connected lending. Non-tariff barriers, rent-seeking by state-owned enterprises, domestic subsidies, barriers to domestic trade and export restrictions all created economic distortions.

The 1997 Asian financial crisis that began to affect Indonesia became an economic and political crisis. The initial response was to float the rupiah, raise key domestic interest rates, and tighten fiscal policy. In October 1997, Indonesia and the International Monetary Fund (IMF) reached an agreement on an economic reform program aimed at macroeconomic stabilization and the elimination of some of the country's most damaging economic policies, such as the National Car Program and the clove monopoly, both involving family members of Suharto. The rupiah remained weak, however, and Suharto was forced to resign in May 1998 after massive riots erupted. In August 1998, Indonesia and the IMF agreed on an Extended Fund Facility (EFF) under President B. J. Habibie that included significant structural reform targets. President Abdurrahman Wahid took office in October 1999, and Indonesia and the IMF signed another EFF in January 2000. The new program also has a range of economic, structural reform, and governance targets.

The effects of the crisis were severe. By November 1997, rapid currency depreciation had seen public debt reach US$60 billion, imposing severe strains on the government's budget.{{cite news|last=Robison|first=Richard|title=A Slow Metamorphosis to Liberal Markets|newspaper=Australian Financial Review|date=17 November 2009}} In 1998, real GDP contracted by 13.1%, and the economy reached its low point in mid-1999 with 0.8% real GDP growth. Inflation reached 72% in 1998 but slowed to 2% in 1999. The rupiah, which had been in the RP 2,600/USD1 range at the start of August 1997 fell to 11,000/USD1 by January 1998, with spot rates around 15,000 for brief periods during the first half of 1998.{{cite web|url=http://www.oanda.com/convert/fxhistory|title=Historical Exchange Rates|publisher=OANDA|date=16 April 2011|access-date=29 August 2011}} It returned to the 8,000/USD1 range at the end of 1998 and has generally traded in the Rp 8,000–10,000/USD1 range ever since, with fluctuations that are relatively predictable and gradual. However, the rupiah began devaluing past 11,000 in 2013, and as of November 2016 is around 13,000 Rp/USD1.{{Cite web|title=XE: USD / IDR Currency Chart. US Dollar to Indonesian Rupiah Rates|url=https://www.xe.com/currencycharts/?from=USD&to=IDR&view=10Y|website=xe.com|access-date=2020-05-06}}

Since an inflation target was introduced in 2000, the GDP deflator and the CPI have grown at an average annual pace of 10¾% and 9%, respectively, similar to the pace recorded in the two decades prior to the 1997 crisis, but well below the pace in the 1960s and 1970s.{{cite web|url= https://socialhistory.org/sites/default/files/docs/ecgrowtheng.pdf |title=Indonesia's growth experience in the 20th century: Evidence, queries, guesses|author=van der Eng, Pierre |publisher=Australian National University|date=4 February 2002 |access-date=10 October 2017|archive-url=https://web.archive.org/web/20171010152026/https://socialhistory.org/sites/default/files/docs/ecgrowtheng.pdf |archive-date=10 October 2017|url-status=dead}} Inflation has also generally trended lower through the 2000s, with some of the fluctuations in inflation reflecting government policy initiatives such as the changes in fiscal subsidies in 2005 and 2008, which caused large temporary spikes in CPI growth.{{cite web|url=http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp01522.pdf|title=Growing into trouble: Indonesia after 1966 |author=Temple, Jonathan|publisher=University of Bristol|date=15 August 2001|access-date=27 December 2016|url-status=dead|archive-url=https://web.archive.org/web/20161227202512/http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp01522.pdf |archive-date=27 December 2016}}

File:Historical economic growth of Indonesia.jpg

In late 2004, Indonesia faced a 'mini-crisis' due to international oil prices rises and imports. The currency exchange rate reached Rp 12,000/USD1 before stabilizing. Under President Susilo Bambang Yudhoyono (SBY), the government was forced to cut its massive fuel subsidies, which were planned to cost $14 billion in October 2005.{{cite news|last=BBC News|title=Indonesia plans to slash fuel aid|publisher=BBC, London|date=31 August 2005|url=http://news.bbc.co.uk/2/hi/business/4200100.stm }}

As of February 2007, the unemployment rate was 9.75%.{{cite press release|publisher=Indonesian Central Statistics Bureau |title=Beberapa Indikator Penting Mengenai Indonesia|date=2 December 2008|url=http://www.bps.go.id/leaflet/leaflet-desember-07-ind.pdf |language=id|access-date=18 March 2008|url-status=dead|archive-url=https://web.archive.org/web/20080401200753/http://www.bps.go.id/leaflet/leaflet-desember-07-ind.pdf |archive-date=1 April 2008 }} Despite a slowing global economy, Indonesia's economic growth accelerated to a ten-year high of 6.3% in 2007. This growth rate was sufficient to reduce poverty from 17.8% to 16.6% based on the government's poverty line and reversed the recent trend towards jobless growth, with unemployment falling to 8.46% in February 2008.{{cite press release|title=Indonesia: Economic and Social update|publisher=World Bank|year=2008|access-date=2 April 2008|url=http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/06/19/000333037_20080619004758/Rendered/PDF/442730WP0BOX321ate1apr200801PUBLIC1.pdf|url-status=dead|archive-url=https://web.archive.org/web/20110607014451/http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/06/19/000333037_20080619004758/Rendered/PDF/442730WP0BOX321ate1apr200801PUBLIC1.pdf|archive-date=7 June 2011}}{{cite press release|title=Indonesia: BPS-STATISTICS INDONESIA STRATEGIC DATA|publisher=BPS-Statistic Indonesia|year=2009 |url=http://www.bps.go.id/eng/download_file/data_strategis.pdf |access-date=5 November 2008|url-status=dead|archive-url=https://web.archive.org/web/20101113161704/http://www.bps.go.id/eng/download_file/data_strategis.pdf|archive-date=13 November 2010}} Unlike many of its more export-dependent neighbors, Indonesia has managed to skirt the recession helped by strong domestic demand (which makes up about two-thirds of the economy) and a government fiscal stimulus package of about 1.4% of GDP. After India and China, Indonesia was the third-fastest growing economy in the G20. With the $512 billion economy expanded 4.4% in the first quarter from a year earlier and last month, the IMF revised its 2009 Indonesia forecast to 3–4% from 2.5%. Indonesia enjoyed stronger fundamentals with the authorities implemented wide-ranging economic and financial reforms, including a rapid reduction in public and external debt, strengthening of corporate and banking sector balance sheets and reducing bank vulnerabilities through higher capitalization and better supervision.{{cite web |url=http://www.imf.org/external/pubs/ft/survey/so/2009/car072809b.htm|title=IMF Survey: Indonesia's Choice of Policy Mix Critical to Ongoing Growth|publisher=Imf.org|date=28 July 2009|access-date=29 August 2011}}

In 2012, Indonesia's real GDP growth reached 6%, then it steadily decreased below 5% until 2015. After Joko Widodo succeeded SBY, the government took measures to ease regulations for foreign direct investments to stimulate the economy.{{Cite magazine |url=https://time.com/4416354/indonesia-joko-jokowi-widodo-terrorism-lgbt-economy/|title=Indonesian President Joko 'Jokowi' Widodo Two Years On|magazine=Time|access-date=2018-05-07}} Indonesia managed to increase their GDP growth slightly above 5% in 2016–2017.{{Cite news |url=https://www.bloomberg.com/news/articles/2017-12-27/jokowi-heads-to-2018-with-backing-of-stronger-indonesian-economy|title=Jokowi Heads to 2018 With Backing of Stronger Indonesian Economy|work=Bloomberg.com|access-date=2018-05-07}} However, the government is currently still facing problems such as currency weakening, decreasing exports and stagnating consumer spending.{{Cite news |url=https://www.bloomberg.com/news/articles/2018-05-07/indonesia-s-economy-expands-at-slower-pace-than-forecast|title=Indonesian GDP Growth Disappoints, Adding to Currency Woes |work=Bloomberg.com|access-date=2018-05-07}}{{Cite web |url=https://asia.nikkei.com/Economy/Indonesian-GDP-growth-falls-short-in-1Q-pressuring-President-Widodo|title=Indonesian GDP growth falls short in 1Q, pressuring President Widodo |website=Nikkei Asian Review-GB|access-date=2018-05-07}} The current unemployment rate for 2019 is at 5.3%.{{Cite web |title=World Economic Outlook (April 2020) - Unemployment rate |url=https://www.imf.org/external/datamapper/LUR@WEO/IDN?zoom=IDN&highlight=IDN|access-date=2020-07-04|website=www.imf.org}}

Reform happened in Indonesia around the 1980s, when the Indonesian government states it will be attempting to economically integrate with global economies. They stated in 2017 that "Globalisation has made it difficult for the Indonesian economy to balance all other factors of the economy".{{citation needed|date=September 2022}}

{{Update|section|reason=2023 and 2024 need to be updated|date=January 2025}}

The following table shows the main economic indicators in 1980–2022 (with IMF staff estimates in 2023–2028). Inflation under 5% is in green.{{cite web | url=https://www.imf.org/en/Publications/WEO/weo-database/2023/October/weo-report?c=536,&s=NGDP_RPCH,NGDPD,PPPGDP,NGDPDPC,PPPPC,PCPIPCH,PCPIEPCH,LUR,GGXWDN_NGDP,GGXWDG_NGDP,&sy=2020&ey=2028&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 | title=Report for Selected Countries and Subjects }}

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• Grey colors are estimations

Indonesia’s economy in 2023, as measured by Gross Domestic Product (GDP) at current market prices, reached IDR 20,892.4 trillion. The highest growth on the production side was Transportation and Storage at 13.96%. During 2023, the Indonesian economy continued to grow spatially. The group of provinces according to the islands, the provinces with the highest growth were Maluku and Papua, Sulawesi, and Kalimantan with growth (c-to-c) of 6.94%, 6.37% and 5.43%. Meanwhile, the group of provinces on Jawa Island which contributed 57.05% to the national economy recorded a growth of 4.96% (c-to-c).

{{main|Agriculture in Indonesia}}

{{see also|Rice production in Indonesia}}

File:Oil palm plantation in Cigudeg-03.jpg plantation. Currently, Indonesia is the world's largest producer of palm oil.]]

Agriculture is a key sector which contributed to 14.43% of GDP.{{cite news|title=Satu Dekade, Kontribusi Pertanian terhadap PDB Menurun|first=Estu|last=Suryowati|date=12 August 2014|newspaper=Kompas|url=http://bisniskeuangan.kompas.com/read/2014/08/12/105145826/Satu.Dekade.Kontribusi.Pertanian.terhadap.PDB.Menurun|language=id}} Currently, there are around 30% of the land area used for agriculture and employed about 49 million people (41% of the total workforce).{{cite web|title=Pertanian di Indonesia (Agriculture in Indonesia)|work=Indonesia Investments|url=http://www.indonesia-investments.com/id/budaya/ekonomi/ikhtisar-struktur-ekonomi/pertanian/item378|access-date=5 December 2015}} Primary agriculture commodities include rice, cassava (tapioca), peanuts, natural rubber, cocoa, coffee, palm oil, copra; poultry, beef, pork, and eggs. Palm oil production is vital to the economy as Indonesia is the world's biggest producer and consumer of the commodity, providing about half of the world's supply.{{cite news|url=https://www.theguardian.com/global-development/2013/sep/11/indonesia-palm-oil-destroy-forests|title=Can Indonesia increase palm oil output without destroying its forest?|author=McClanahan, Paige|newspaper=The Guardian|date=11 September 2013|access-date=17 September 2013|url-status=live|archive-url=https://web.archive.org/web/20130917140332/http://www.theguardian.com/global-development/2013/sep/11/indonesia-palm-oil-destroy-forests|archive-date=17 September 2013}} Plantations in the country stretch across 6 million hectares as of 2007,{{cite web|url=http://www.greenpeace.org.uk/forests/palm-oil|title=Palm Oil|publisher=Greenpeace|access-date=26 September 2013|url-status=live|archive-url=https://web.archive.org/web/20130926154501/http://www.greenpeace.org.uk/forests/palm-oil|archive-date=26 September 2013}} with a replanting plan set for an additional 4.7 million to boost productivity in 2017.{{cite web|url=http://www.blackseagrain.net/novosti/indonesia-to-replant-4-7m-hectares-of-palm-oil-plantation|title=Indonesia to replant 4.7m hectares of palm oil plantation|publisher=UkrAgroConsult|date=30 August 2017|access-date=27 September 2017|url-status=dead|archive-url=https://web.archive.org/web/20170927113223/http://www.blackseagrain.net/novosti/indonesia-to-replant-4-7m-hectares-of-palm-oil-plantation|archive-date=27 September 2017}} There are a number of negative social and environmental impacts of palm oil production in Southeast Asia.

In 2015, the total production of seafood reached about 22.31 million metric tons, valued at around 18.10 billion US dollars. For capture of wild fish (both inland and marine), the production trend was steady in 2011–2015, while there was a steep increase in the production from aquaculture during the same period.{{cite web

| url =http://www.seafdec.org/fisheries-country-profile-indonesia/

| title =Fisheries Country Profile: Indonesia

| date =June 2018

| website =Southeast Asian Fisheries Development Center

| access-date =24 April 2021

| quote = }}

{{see also|List of countries by coal production}}

File:Batu Hijau mine ore trucks.jpg, West Nusa Tenggara.]]

File:Grasberg mine.jpg has one of the largest reserves of gold and copper in the world. It is located in Mimika Regency, Papua, Indonesia near Puncak Jaya, the highest mountain in the country.]]

Indonesia was the only South East Asian member of the Organization of Petroleum Exporting Countries (OPEC) until its suspension in 2009. The country currently remains a net oil importer despite its large petroleum production industry.{{cite web |title=Member Countries |url=https://www.opec.org/opec_web/en/about_us/25.htm |website=OPEC |publisher=Organisation of Petroleum Exporting Countries}} In 1999, crude and condensate output averaged {{convert|1.5|Moilbbl|m3}} per day, and in 1998, the oil and gas sector including refining, contributed approximately 9% to GDP. As of 2005, crude oil and condensate output were {{convert|1.07|Moilbbl|m3}} per day. It indicates a substantial decline from the 1990s, due primarily to ageing oil fields and a lack of investment in oil production equipment. This decline in production has been accompanied by a substantial increase in domestic consumption, about 5.4% per year, leading to an estimated US$1.2 billion cost for importing oil in 2005. The state owns all petroleum and mineral rights. Foreign firms participate through production-sharing and work contracts. Oil and gas contractors are required to finance all exploration, production, and development costs in their contract areas and are entitled to recover operating, exploration, and development costs out of the oil and gas produced. Indonesia had previously subsidized fuel prices to keep prices low, costing US$7 billion in 2004.{{cite web|url=http://www.atimes.com/atimes/Southeast_Asia/GC10Ae04.html|archive-url=https://web.archive.org/web/20050311204959/http://www.atimes.com/atimes/Southeast_Asia/GC10Ae04.html|url-status=unfit|archive-date=11 March 2005|title=Tigers count the cost of easing fuel subsidies|work=Asia Times|date=10 March 2005|access-date=29 August 2011}} SBY has mandated a significant reduction of government subsidy of fuel prices in several stages.{{cite news|url=http://news.bbc.co.uk/2/hi/business/4200100.stm|work=BBC News|title=Indonesia plans to slash fuel aid|date=31 August 2005}} The government has stated that cuts in subsidies are aimed at reducing the budget deficit to 1% of GDP in 2005, down from around 1.6% last year. At the same time, the government has offered one-time subsidies for qualified citizens, to alleviate hardships.

Indonesia is the world's largest tin market. Although mineral production traditionally centered on bauxite, silver, and tin, it is expanding its copper, nickel, gold, and coal output for export markets. In mid-1993, the Department of Mines and Energy reopened the coal sector to foreign investment, resulting in a joint venture between Indonesian coal producer and BP and Rio Tinto. Total coal production reached 74 million metric tons in 1999, including exports of 55 million tons, and in 2011, production was 353 million. As of 2014, Indonesia is the third-largest producer with a total output of 458 Mt and export of 382 Mt.{{Cite web|title=Coal Mining in Indonesia - Indonesian Coal Industry {{!}} Indonesia Investments|url=https://www.indonesia-investments.com/business/commodities/coal/item236|website=indonesia-investments.com|access-date=2020-05-06}} At this rate, the reserves will be used up in 61 years until 2075.{{Cite web |url=https://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2015/bp-statistical-review-of-world-energy-2015-full-report.pdf |title=Archived copy |access-date=5 January 2016 |archive-url=https://web.archive.org/web/20171115003415/https://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2015/bp-statistical-review-of-world-energy-2015-full-report.pdf |archive-date=15 November 2017 |url-status=dead }} Not all of the productions can be exported due to Domestic Market Obligation (DMO) regulation, which should fulfill the domestic market. In 2012, the DMO was 24.72%. Starting from 2014, no low-grade coal exports are allowed, so the upgraded brown coal process that cranks up the calorie value of coal from 4,500 to 6,100 kcal/kg will be built in South Kalimantan and South Sumatra.{{cite web|url=http://www.thejakartapost.com/news/2011/09/23/coal-production-may-reach-370-million-tons-year.html|title=Coal production may reach 370 million tons this year|date=23 September 2011}} Indonesia is also the world's largest producer of nickel,{{cite news |last1=Sanderson |first1=Henry |title=Nickel prices hit four-year high on Indonesia export ban |url=https://www.ft.com/content/1709b318-cb26-11e9-a1f4-3669401ba76f |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/1709b318-cb26-11e9-a1f4-3669401ba76f |archive-date=10 December 2022 |url-access=subscription |access-date=9 September 2019 |work=Financial Times|date=30 August 2019}} and the second-largest producer of cobalt in 2022.{{cite news |title=Indonesia emerges as world's second-largest cobalt producer |url=https://www.ft.com/content/aae97af3-02ac-4723-a6fd-dbb0e5de55ff |access-date=10 May 2023 |work=Financial Times |date=9 May 2023}}

Two US firms operate three copper/gold mines in Indonesia, with a Canadian and British firm holding significant other investments in nickel and gold, respectively. India's fortune groups like Vedanta Resources and Tata Group also have substantial mining operations in Indonesia. In 1998, the value of Indonesian gold and copper production was $1 billion and $843 million respectively. Receipts from gold, copper, and coal accounted for 84% of the $3 billion earned in 1998 by the mineral mining sector. With the addition of Alumina project that produces 5% of the world's alumina production, Indonesia would be the world's second-largest Alumina producer. The project will not make the ores to become aluminum, as there are 100 types of Alumina derivatives that can be developed further by other companies in Indonesia.{{cite web|url=http://www.antaranews.com/en/news/70198/ri-aims-to-be-second-largest-alumina-producer|title=RI aims to be second largest alumina producer|publisher=Antara|date=12 April 2011|access-date=29 August 2011}}

Joko Widodo's administration continued the resource nationalism policy of SBY, nationalizing some assets controlled by multinational companies such as Freeport McMoRan, TotalEnergies and Chevron. In 2018, in a move aimed to cut imports, oil companies operating in Indonesia were ordered to sell their crude oil to state-owned Pertamina.{{cite news|title=Economic nationalism is back in Indonesia as election approaches|url=https://www.straitstimes.com/asia/se-asia/economic-nationalism-is-back-in-indonesia-as-election-approaches|access-date=18 September 2018|work=Straits Times|date=17 September 2018}}

File:Industry area - panoramio.jpg

Indonesia's manufacturing sector has historically played a key role in the country's economic development and now contributes to 20 percent of GDP.

The government has ambitious plans to propel the country into the top ten biggest economies in the world by 2030, with manufacturing at the heart of this goal. The main areas of production include textiles and garments, food and beverages (F&B), electronics, automotive, and chemicals, with the majority of manufacturers in this sector consisting of micro, small, or medium-sized enterprises. The sector has posted a consistent four percent growth year-on-year since 2016 and registered 147 trillion rupiah (US$8.9 billion) in investments from January to September 2019.{{cite news|title=Indonesia's Manufacturing Sector: Practical Information for Investors|url=https://www.aseanbriefing.com/news/indonesias-manufacturing-sector-practical-information-investors/|access-date=1 July 2021|work=Asean Briefing|date=31 March 2020}}

Indonesia recently became the 10th-largest manufacturing nation in the world. Its large manufacturing sector accounts for almost a quarter of the nation's total GDP and employs over a fifth of Indonesia's working age population (around 25 million workers). Put into perspective, Indonesia's manufacturing sector is now larger than the manufacturing sectors of the United Kingdom, Russia and Mexico. Industry sector (including manufacturing) which accounts for 21% of local workers (having become more prominent in recent years). Indonesia's labour pool is estimated at 120 million people, and is growing annually by approximately 2.4 million. As the economy has progressed beyond its predominantly agricultural base to a mixed composition, more workers – particularly women – are now employed in manufacturing and service-related professional industries.{{cite news|title=Manufacturing in Indonesia|url=https://asialinkbusiness.com.au/indonesia/business-practicalities-in-indonesia/manufacturing-in-indonesia?doNothing=1|access-date=1 July 2021|work=Asia Link Business}}

With its rapidly growing middle class and competitive workforce, more foreign investors than ever before are taking advantage of Indonesia's strong manufacturing sector. However, the sector has significant challenges, including intense international competition, particularly from China, increasing labour costs, high transportation and logistics costs, difficulties getting credit, and varying levels of transparency and clarity in regulations.

{{see also|Energy in Indonesia}}

Indonesia has significant potential for developing renewable energy, however, the country continues to rely heavily on the use of fossil fuels in domestic electricity production.Vakulchuk, R., Chan, H.Y., Kresnawan, M.R., Merdekawati, M., Overland, I., Sagbakken, H.F., Suryadi, B., Utama, N.A. and Yurnaidi, Z. 2020. Indonesia: how to boost investment in renewable energy. ASEAN Centre for Energy (ACE) Policy Brief Series, No. 6. https://www.researchgate.net/publication/341793782 Continued investment in and reliance on fossil fuels, such as coal, may result in fossil fuels becoming stranded assets, leading to significant investments lost that the country could have received from renewable energy investors.{{cite journal |last1=Overland |first1=Indra |last2=Sagbakken |first2=Haakon Fossum |last3=Chan |first3=Hoy-Yen |last4=Merdekawati |first4=Monika |last5=Suryadi |first5=Beni |last6=Utama |first6=Nuki Agya |last7=Vakulchuk |first7=Roman |title=The ASEAN climate and energy paradox |journal=Energy and Climate Change |date=December 2021 |volume=2 |page=100019 |doi=10.1016/j.egycc.2020.100019|issn=2666-2787 |hdl=11250/2734506 |hdl-access=free }}

{{Main|Automotive industry in Indonesia}}

In 2010, Indonesia sold 7.6 million motorcycles, which were mainly produced in the country with almost 100% local components. Honda led the market with a 50.95% market share, followed by Yamaha with 41.37%.{{cite web|url=http://www.thejakartapost.com/news/2011/07/01/honda-eyes-larger-share-premium-bike-market.html|title=Honda eyes larger share in premium bike market|work=The Jakarta Post|access-date=29 August 2011}} In 2011, the retail car sales total was 888,335 units, a 19.26% increase from last year. Toyota dominated the domestic car market (35.34%), followed by Daihatsu and Mitsubishi with 15.44% and 14.56%, respectively.{{cite web|url=http://www.thejakartapost.com/news/2012/01/05/local-automobile-sales-hit-all-time-high0.html|title=Local automobile sales hit all-time high|date=5 January 2012}} Since 2011, some local carmakers have introduced some Indonesian national cars which can be categorized as Low-Cost Green Car (LCGC). In 2012, sales increased significantly by 24%, making it the first time that there were more than one million units in automobile sales.{{cite web|url=http://industri.kontan.co.id/news/mobil-laku-11-juta-unit-di-2012|title=Penjualan mobil capai 1,1 juta unit di 2012|date=8 January 2013}}

File:2006Indonesian exports.PNG

In August 2014, Indonesia exported 126,935 Completely Build Up (CBU) vehicle units and 71,000 Completely Knock Down (CKD) vehicle units, while total production reached 878,000 vehicle units, constituting 22.5% of total output. Automotive export is more than double of its import. By 2020, it is predicted that the automotive exports will be the third after CPO and shoe export.{{cite web |url=http://www.kemenperin.go.id/artikel/10087/Optimisme-Ekspor-Mobil-Terus-Menanjak|title=Optimisme Ekspor Mobil Terus Menanjak|access-date=22 September 2014|archive-url=https://web.archive.org/web/20150923193034/http://www.kemenperin.go.id/artikel/10087/Optimisme-Ekspor-Mobil-Terus-Menanjak|archive-date=23 September 2015|url-status=dead}} In August 2015, Indonesia exported 123,790 motorcycles. In the same year, Yamaha Motor Company, which exported 82,641, announced to make Indonesia as a base of exporting of its products.{{cite web |url=http://industri.kontan.co.id/news/roda-dua-makin-ngacir-ke-luar-negeri|title=Roda dua makin ngacir ke luar negeri|date=14 September 2015}}

In 2017, the country produced almost 1.2 million motor vehicles, ranking it as the 18th largest producer in the world.{{cite web|url=http://www.oica.net/category/production-statistics/2017-statistics/|title=2017 Production Statistics|publisher=Organisation Internationale des Constructeurs d'Automobiles|access-date=8 May 2018}} Nowadays, Indonesian automotive companies can produce cars with a high ratio of local content (80%–90%).{{cite web |url=http://www.toyotaindonesiamanufacturing.co.id/industrial/localization |title=Localization|publisher=PT. Toyota Motor Manufacturing Indonesia |access-date=29 June 2016|url-status=dead|archive-url=https://web.archive.org/web/20160629201829/http://www.toyotaindonesiamanufacturing.co.id/industrial/localization|archive-date=29 June 2016}}

In 2018, the country produced 1.34 million cars and exported 346,000 cars, mainly to the Philippines and Vietnam.{{cite web |url=https://setkab.go.id/en/car-exports-expected-to-increase-15-6-this-year/ |archive-url=https://web.archive.org/web/20200730225901/https://setkab.go.id/en/car-exports-expected-to-increase-15-6-this-year/ |url-status=dead |archive-date=30 July 2020 |title=Car Exports Expected to Increase 15.6% This Year |author=Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation |date=25 April 2019 }}

File:Indonesian Rupiah (IDR) banknotes.png (IDR) banknotes denominations in circulation since 2016]]

There are 50 million small businesses in Indonesia, with online usage growth of 48% in 2010. Google announced that it would open a local office in Indonesia before 2012.{{cite web |url=http://www.embassyofindonesia.org/news/2011/07/news058.htm |title=Google to Open Indonesia Office 'Before 2012' |publisher=Embassyofindonesia.org|date=22 July 2011|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110927162226/http://www.embassyofindonesia.org/news/2011/07/news058.htm|archive-date=27 September 2011|url-status=dead}} According to Deloitte in 2011, Internet-related activities have generated 1.6% of the GDP. It is bigger than electronic and electrical equipment exports and liquefied natural gas at 1.51% and 1.45% respectively.{{cite web|title=Internet penetration and the connected archipelago|date=31 December 2011 |url=http://www.thejakartapost.com/news/2011/12/31/internet-penetration-and-connected-archipelago.html}}

Up to the end of June 2011, the fixed state assets were Rp 1,265 trillion ($128 billion). The value of state stocks was Rp 50 trillion ($5 billion) while other state assets were Rp 24 trillion ($2.4 billion).{{cite web |url=http://english.kompas.com/read/2012/01/02/11145752/Indonesias.State.Assets.Worth.IDR1.338.7.Trillion|title=Indonesia's State Assets Worth IDR1,338.7 Trillion|date=2 January 2011|access-date=2 January 2012|archive-url= https://web.archive.org/web/20120122062304/http://english.kompas.com/read/2012/01/02/11145752/Indonesias.State.Assets.Worth.IDR1.338.7.Trillion |archive-date=22 January 2012|url-status=dead}}

In 2015, financial services covered Rp 7,2 trillion. Fifty domestic and foreign conglomerations held around 70.5%. Fourteen of it were vertical conglomerations, 28 were horizontal, and eight are mixed. Thirty-five entities are mainly in the bank industries, 13 were in non-bank industries and one each in special financial industries and capital market industries.{{cite web|url=http://www.ojk.go.id/siaran-pers-ojk-awasi-50-konglomerasi-keuangan|title=Siaran Pers: OJK Awasi 50 Konglomerasi Keuangan|date=26 June 2015|access-date=28 June 2015|archive-url=https://web.archive.org/web/20150701041106/http://www.ojk.go.id/siaran-pers-ojk-awasi-50-konglomerasi-keuangan|archive-date=1 July 2015|url-status=dead}}

The Indonesian Textile Association has reported that in 2013, the textile sector is likely to attract investment of around $175 million. In 2012, the investment in this sector was $247 million, of which only $51 million was for new textile machinery.{{Cite news|title=Indonesia textile sector faces challenge|publisher=Investvine.com|date=2 February 2013|url=http://investvine.com/indonesia-textile-sector-faces-challenge/|access-date=3 April 2013|archive-date=28 December 2013|archive-url=https://web.archive.org/web/20131228004223/http://investvine.com/indonesia-textile-sector-faces-challenge/|url-status=dead}} Exports from the textile sector in 2012 were $13.7 billion.

In 2011, Indonesia released 55,010 working visas for foreigners, an increase of 10% compared to 2010, while the number of foreign residents in Indonesia, excluding tourists and foreign emissaries was 111,752, rose by 6% compared to last year. Those who received visas for six months to one year were mostly Chinese, Japanese, South Koreans, Indians, Americans and Australians. A few of them were entrepreneurs who made new businesses. Malaysia is the most common destination of Indonesian migrant workers (including illegal workers). In 2010, according to a World Bank report, Indonesia was among the world's top ten remittance-receiving countries with a value totaling $7 billion.{{cite web |url=http://www.embassyofindonesia.org/news/2011/05/news015.htm|title=Indonesia Among the World's Top 10 Remittance Receivers|date=4 May 2011 |publisher=Embassyofindonesia.org|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110927162012/http://www.embassyofindonesia.org/news/2011/05/news015.htm|archive-date=27 September 2011|url-status=dead}} In May 2011, six million Indonesian citizens were working overseas, 2.2 million of whom reside in Malaysia and another 1.5 million in Saudi Arabia.{{cite web|url=http://www.thejakartapost.com/news/2011/06/04/after-malaysia-ri-seeks-similar-pact-with-s-arabia.html|title=After Malaysia, RI seeks similar pact with S. Arabia|date=19 August 2011|work=The Jakarta Post|access-date=29 August 2011}}

{{main|List of Indonesian provinces by GDP|List of Indonesian provinces by GDP per capita|List of Indonesian cities by GDP|List of Indonesian regencies by GDP}}

There are 34 provinces in Indonesia. Below are the top 15 provinces in Indonesia ranked by GDP in 2019:

Until the end of 2010, intra-ASEAN trade was still low as trade involved mainly exports to countries outside the region, with the exception of Laos and Myanmar, whose foreign trade was ASEAN-oriented.{{cite web|url=http://www.antaranews.com/en/news/77403/asean-feared-to-become-multinational-companies-market-only|work=Anatara News|title=ASEAN feared to become multinational companies market only|date=10 November 2011|access-date=10 November 2011|archive-date=12 January 2012|archive-url=https://web.archive.org/web/20120112112614/http://www.antaranews.com/en/news/77403/asean-feared-to-become-multinational-companies-market-only|url-status=live}} In 2009, realised foreign direct investment (FDI) was US$37.9 billion and increased two-fold in 2010 to US$75.8 billion.

The ASEAN Framework Agreement on Trade in Services (AFAS) was adopted at the ASEAN Summit in Bangkok in December 1995.{{cite web|url=http://www.asean.org/6628.htm |title=ASEAN Framework Agreement on Services (1995) |publisher=ASEAN |access-date=21 December 2008 |url-status=dead |archive-url=https://web.archive.org/web/20091226223120/http://www.asean.org/6628.htm |archive-date=26 December 2009 }} Under the agreement, member states enter into successive rounds of negotiations to liberalise trade in services with the aim of submitting increasingly higher levels of commitment. ASEAN has concluded seven packages of commitments under AFAS.{{cite web|url=http://www.asean.org/6626.htm |title=Overview |publisher=ASEAN |access-date=21 December 2008 |url-status=dead |archive-url=https://web.archive.org/web/20110206130652/http://www.asean.org/6626.htm |archive-date=6 February 2011 }}

Mutual Recognition Agreements (MRAs) have been agreed upon by ASEAN for eight professions: physicians, dentists, nurses, architects, engineers, accountants, surveyors, and tourism professionals. Individuals in these professions will be free to work in any ASEAN states effective 31 December 2015.{{cite news|last1=Buranasomphop|first1=Duangkamol|title=Asean 2015: Free movement of labour|url=http://en.aectourismthai.com/content1/1411|access-date=11 May 2015|publisher=AEC Tourism Thailand|date=14 June 2014|archive-url=https://web.archive.org/web/20150518070624/http://en.aectourismthai.com/content1/1411|archive-date=18 May 2015|url-status=dead}}{{cite news|title=Concern over free flow of labour after AEC starts|url=http://www.nationmultimedia.com/national/Concern-over-free-flow-of-labour-after-AEC-starts-30238365.html|access-date=11 May 2015|work=The Nation|date=13 July 2014|archive-date=18 May 2015|archive-url=https://web.archive.org/web/20150518102622/http://www.nationmultimedia.com/national/Concern-over-free-flow-of-labour-after-AEC-starts-30238365.html|url-status=dead}}{{cite web|title=Why the AEC in 2015 Will Lead to Few Changes in Thailand |url=http://www.norcham.com/news/why-the-aec-in-2015-will-lead-to-few-changes-in-thailand |website=Thai-Norwegian Chamber of Commerce |access-date=12 May 2015 |url-status=dead |archive-url=https://web.archive.org/web/20150518093814/http://www.norcham.com/news/why-the-aec-in-2015-will-lead-to-few-changes-in-thailand |archive-date=18 May 2015 }}

In addition, six member states (Malaysia, Vietnam (2 exchanges), Indonesia, Philippines, Thailand, and Singapore) have collaborated on integrating their stock exchanges, which includes 70% of its transaction values with the goal to compete with international exchanges.{{cite web |url=http://investasi.kontan.co.id/news/indonesia-belum-akan-masuk-asean-linkage |title=Indonesia belum akan masuk Asean Linkage |author=Anna Suci Perwitasari |date=13 June 2012 |access-date=17 January 2014 |archive-date=10 December 2014 |archive-url=https://web.archive.org/web/20141210101112/http://investasi.kontan.co.id/news/indonesia-belum-akan-masuk-asean-linkage |url-status=live }}

Single market will also include the ASEAN Single Aviation Market (ASEAN-SAM), the region's aviation policy geared towards the development of a unified and single aviation market in Southeast Asia. It was proposed by the ASEAN Air Transport Working Group, supported by the ASEAN Senior Transport Officials Meeting, and endorsed by the ASEAN Transport Ministers.{{cite web|url=http://www.asian-aerocad.com/news/news.php?newsid=23 |title=Asean Single Aviation Market |access-date=26 September 2008 |work=Straits Times |location=Singapore |date=2 February 2008 |url-status=dead |archive-url=https://web.archive.org/web/20081209063906/http://www.asian-aerocad.com/news/news.php?newsid=23 |archive-date=9 December 2008 }} It is expected to liberalise air travel between member states allowing ASEAN airlines to benefit directly from the growth in air travel, and also free up tourism, trade, investment, and service flows.{{cite news |url=http://news.xinhuanet.com/english/2007-11/01/content_6990497.htm |title=Singaporean PM urges ASEAN to liberalise aviation |access-date=26 September 2008 |work=chinaview.cn |publisher=Xinhua News Agency |date=1 November 2007 |archive-date=11 December 2008 |archive-url=https://web.archive.org/web/20081211012727/http://news.xinhuanet.com/english/2007-11/01/content_6990497.htm |url-status=dead }} This policy supersedes existing unilateral, bilateral, and multilateral air services agreements among member states which are inconsistent with its provisions.

Indonesia and Japan signed the Indonesia–Japan Economic Partnership Agreement (IJEPA), which had come into effect on 1 July 2008. The agreement was Indonesia's first bilateral free-trade agreement to ease the cross-border flow of goods and people as well as investment between both countries.{{Cite web|url=https://www.indonesia-investments.com/news/todays-headlines/indonesia-japan-economic-partnership-agreement-ijepa-reviewed/item5244?|title=Indonesia-Japan Economic Partnership Agreement (IJEPA) Reviewed |publisher=Indonesia Investments|website=indonesia-investments.com|access-date=28 January 2018}} In 2012, there were between 1,200 and 1,300 Japanese corporates operating in Indonesia, with some 12,000 Japanese nationals living in Indonesia. Japan has been investing in Indonesia for decades, particularly in the automotive, electronic goods, energy, and mining sectors. Prior to the formation of the Indonesian Republic, the Japanese had viewed Indonesia as an important source of natural resources. The Japanese need of natural resources was among the reasons that led the nation to advance further to the south in their military conquests during World War II. Today Indonesia is Japan's major supplier for natural rubber, liquefied natural gas, coal, minerals, paper pulp, seafood such as shrimp and tuna, and coffee. Traditionally Indonesia has been regarded as a major market of Japanese automotive and electronic goods. For Japanese businesses, Indonesia has been a location for low-cost manufacturing operations as well as being the source of various natural resources required by those operations. Approximately 1,000 Japanese companies operate in Indonesia which employ approximately 300,000 people.[http://www.thejakartapost.com/news/2010/08/23/huge-opportunity-japanese-investment.html Huge opportunity from Japanese investment] Major Japanese factories are concentrated east of Jakarta with high concentrations in Bekasi, Cikarang and Karawang, West Java.

Trade with China has increased since the 1990s, and in 2014, China became Indonesia's second-largest export destination after Japan.{{cite web|url=http://atlas.media.mit.edu/en/profile/country/idn/|title=Indonesia|access-date=20 November 2016|archive-date=1 April 2017|archive-url=https://web.archive.org/web/20170401221338/http://atlas.media.mit.edu/en/profile/country/idn/|url-status=dead}} Trade between China and Indonesia is on the rise, especially after the implementation of ACFTA since early 2010. Indeed, while in 2003 trade between Indonesia and China reached only US$3.8 billion, in 2010 it multiplied almost 10 times and reached US$36.1 billion.{{cite web

|url =http://www.iisd.org/tkn/pdf/indonesia_china_relations.pdf

|title =Indonesia – China Trade Relations: The deepening of economic integration amid uncertainty?

|author =Alexander C. Chandra and Lucky A. Lontoh

|year =2011

|publisher =International Institute for Sustainable Development

|access-date =5 March 2013

|archive-url=https://web.archive.org/web/20140610114237/http://www.iisd.org/tkn/pdf/indonesia_china_relations.pdf

|archive-date=10 June 2014

|url-status=dead

}} China's transformation into Fastest growing country in the 21st century has led to an increase of foreign investments in the bamboo network, a network of overseas Chinese businesses operating in the markets of Southeast Asia that share common family and cultural ties.{{cite news|last=Quinlan|first=Joe|title=Insight: China's capital targets Asia's bamboo network|url=http://www.ft.com/cms/s/0/67554d8a-920f-11dc-8981-0000779fd2ac.html |archive-url=https://ghostarchive.org/archive/20221210/http://www.ft.com/cms/s/0/67554d8a-920f-11dc-8981-0000779fd2ac.html |archive-date=10 December 2022 |url-access=subscription|newspaper=Financial Times|date=13 November 2007}}{{cite book|author=Murray L Weidenbaum|title=The Bamboo Network: How Expatriate Chinese Entrepreneurs are Creating a New Economic Superpower in Asia|url=https://archive.org/details/bamboonetworkhow00weid|url-access=registration|date=1 January 1996|publisher=Martin Kessler Books, Free Press|isbn=978-0-684-82289-1|pages=[https://archive.org/details/bamboonetworkhow00weid/page/4 4]–8}} However the free trade with China has caused much anxiety in Indonesia, since inflows of cheap products from China could harm Indonesian industry. Indonesian private sector and civil society organizations vigorously lobbied the Indonesian government and members of parliament, insisting that Indonesia should either pull out of the agreement or renegotiate its terms with Beijing.

China has remained on top of Indonesia's key major trading partners, serving as the country's largest export and import market. China serves as Indonesia's largest export destination after overtaking Japan and United States, reaching US$16.8 billion.{{cite news|title=China keen to work with Indonesia on BRI|url=http://www.straitstimes.com/asia/east-asia/china-keen-to-work-with-indonesia-on-bri|work=The Straits Times|date=10 February 2018|language=en}}{{cite news|publisher=Indonesia Investments|title=Trade Balance Indonesia: $678 Million Deficit in January 2018 {{!}} Indonesia Investments|url=https://www.indonesia-investments.com/business/business-columns/trade-balance-indonesia-678-million-deficit-in-january-2018/item8605|work=www.indonesia-investments.com|language=en-gb}}{{cite web|title=OEC - Indonesia (IDN) Exports, Imports, and Trade Partners|url=https://atlas.media.mit.edu/en/profile/country/idn/|website=atlas.media.mit.edu|language=en|access-date=30 June 2021|archive-date=13 June 2019|archive-url=https://web.archive.org/web/20190613210428/https://atlas.media.mit.edu/en/profile/country/idn/|url-status=dead}} China is also Indonesia's most important source of imports, reaching US$30.8 billion, or 22.7% of Indonesian imports in 2016.{{cite web|title=Top Indonesia Imports|url=http://www.worldsrichestcountries.com/top_indonesia_imports.html|website=www.worldsrichestcountries.com}} The balance however was in favour of China as Indonesia booked a trade deficit of US$14 billion in 2016.{{cite web|title=Indonesia's Top Trading Partners|url=http://www.worldstopexports.com/indonesias-top-15-import-partners/|website=World's Top Exports|date=26 December 2017}}

From China's perspective, since 2010 ASEAN as a whole has become its fourth-largest trading partner after the European Union, Japan and the United States. Among ASEAN member countries, Indonesia was China's fourth-largest trading partner, which, according to data as of May 2010 from the Ministry of Commerce of the People's Republic of China, amounted to US$12.4 billion, after Malaysia (US$22.2 billion), Singapore (US$17.9 billion) and Thailand (US$15.7 billion). With China's economic rise, Indonesia has been intensifying its trade relationship with China to counterbalance its ties with the West.{{cite web|url=http://theconversation.com/indonesia-forges-stronger-ties-with-china-to-boost-economy-34004|title=Indonesia forges stronger ties with China to boost economy|access-date=20 November 2016|date=19 November 2014}} By 2020, China had become Indonesia's largest export destination.{{cite news |title=Indonesia Posts Largest Trade Surplus Since 2011 as Coronavirus Disrupts Imports From China |url=https://jakartaglobe.id/business/indonesia-posts-largest-trade-surplus-since-2011-as-coronavirus-disrupts-imports-from-china |access-date=15 June 2020 |work=Jakarta Globe |date=16 March 2020}}

In the past, the relations were only developed around trade and investments, such as the forestry and garment sectors. Today the cooperation has been expanded to a number of mega projects and advanced industries. With US$27 billion in bilateral trade, South Korea became the fourth biggest trading partner of Indonesia in 2012. It became the third-biggest foreign investor in Indonesia, with US$1.94 billion in investment.

There are large numbers of South Korean companies that have been investing and operating in Indonesia, such as Miwon (Daesang Corporation), Lotte, Yong Ma, Hankook, Samsung, LG, Kia Motors and Hyundai. In 2011, Hankook announced a US$353 million investment into a production plant located in Bekasi, West Java, Indonesia.{{Cite web|url=http://www.thejakartapost.com/news/2011/01/20/hankook-announces-us353-million-investment.html |title=Hankook announces US$353 million investment |author=Rangga D Fadillah |publisher=The Jakarta Post |url-status=dead |archive-url=https://web.archive.org/web/20110124161517/http://www.thejakartapost.com/news/2011/01/20/hankook-announces-us353-million-investment.html |archive-date=2011-01-24 }}

In 2019, trade between Indonesia and South Korea was worth $15.65 billion, and between 2015 and 2019 South Korean companies invested nearly $7 billion in Indonesia. In December 2020, Indonesia and South Korea signed a comprehensive economic partnership. It is equivalent to a free trade agreement, though focuses on a broader scope of economic cooperation. Under the deal, Indonesia will scrap 94.8% of tariffs on South Korean products while South Korea will scrap 95.8% of tariffs on Indonesian products.{{Cite web|title=Indonesia, South Korea sign CEPA to boost trade, investment|url=https://www.thejakartapost.com/news/2020/12/18/indonesia-south-korea-sign-cepa-to-boost-trade-investment.html|access-date=2021-01-07|website=The Jakarta Post|language=en}}{{Cite web|title=S. Korea, Indonesia Sign CEPA|url=http://world.kbs.co.kr/service/news_view.htm?lang=e&Seq_Code=158364|access-date=2021-01-07|website=world.kbs.co.kr|language=en}}{{Cite news|date=2020-12-18|title=South Korea and Indonesia sign deal to boost trade, investment|language=en|work=Reuters|url=https://www.reuters.com/article/us-southkorea-indonesia-trade-idUSKBN28S0EZ|access-date=2021-01-07}}

At the beginning of the post-Suharto era, US exports to Indonesia in 1999 totaled $2 billion, down significantly from $4.5 billion in 1997. The main exports were construction equipment, machinery, aviation parts, chemicals, and agricultural products. US imports from Indonesia in 1999 totaled $9.5 billion and consisted primarily of clothing, machinery and transportation equipment, petroleum, natural rubber, and footwear. Financial assistance to Indonesia is coordinated through the Consultative Group on Indonesia (CGI) formed in 1989. It includes 19 donor countries and 13 international organizations that meet annually to coordinate donor assistance. In 2019, as Indonesia's share of global trade exceeded 0.5 percent, the United States Trade Representatives decided not to classify Indonesia as a "developing country."{{Cite web|url=https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/february/ustr-updates-list-developing-and-least-developed-countries-under-us-cvd-law|title=USTR Updates List of Developing and Least-Developed Countries Under U.S. CVD Law {{!}} United States Trade Representative|website=ustr.gov|access-date=2020-02-27}} Despite a revocation of this status, the Indonesian government has assured that this would not change the current Generalized System of Preferences facilities that Indonesia had enjoyed from the United States.{{Cite web|url=https://www.thejakartapost.com/news/2020/02/25/revocation-of-indonesias-developing-country-status-will-not-affect-gsp-government.html|title=Revocation of Indonesia's developing country status will not affect GSP: Government|website=The Jakarta Post|language=en|access-date=2020-02-27}}

The EU and Indonesia have built robust commercial relations, with bilateral trade amounting to approximately €25 billion in 2012 resulting in a sizeable €5.7 billion trade surplus for Indonesia with the EU. In the past few years trade between EU and Indonesia has been marked by an upward trend. Whereas total trade was worth almost €16 billion in 2009, by 2011 it had already reached €23.5 billion. For the EU, Indonesia is the 24th largest import source (share 0.9%) and the 30th largest export destination (share 0.6%). Inside the ASEAN-region, Indonesia ranks fourth in terms of total trade. The EU is Indonesia's 4th largest trading partner after Japan, China and Singapore, representing almost 10% of its total external trade. The EU is the second largest investor in the Indonesian economy.{{cite web|url=http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ |title=Eurostat Home |access-date=2014-02-19 |url-status=dead |archive-url=https://web.archive.org/web/20140124063828/http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ |archive-date=2014-01-24 }}

Indonesia mostly exports to the EU agricultural products and processed resources, mainly palm oil, fuels and mining products, textiles and furniture. EU exports to Indonesia consist mainly of high-tech machinery and transport equipment, chemicals and various manufactured goods. Essentially, trade flows between Indonesia and the EU complement each other.

After negotiations on a free trade agreement with ASEAN got increasingly difficult, the EU began pursuing negotiations with individual ASEAN states. The EU and Indonesia are currently working towards an ambitious Comprehensive Economic Partnership Agreement covering trade, investment and services.{{cite web|url=http://www.thejakartapost.com/news/2009/11/09/boosting-euindonesia-relations.html|title=Boosting EU-Indonesia relations}}

On 25 January 2011, after talks by Indian Prime Minister Manmohan Singh and visiting President of Indonesia Susilo Bambang Yudhoyono, India and Indonesia had signed business deals worth billions of dollars and set an ambitious target of doubling trade over the next five years.{{cite news| url=https://www.bbc.co.uk/news/world-asia-pacific-12274815 | work=BBC News | title=India and Indonesia aim to double trade | date=25 January 2011}} India also has further economic ties with Indonesia through its free trade agreement with ASEAN, of which Indonesia is a member.{{cite news| url=https://www.bbc.co.uk/news/business-12630418 | work=BBC News | title=India and Asean aim to boost trade | date=3 March 2011}} The two countries target to achieve bilateral trade of $25 billion by 2015, with cumulative Indian investments of $20 billion in Indonesia.{{cite web|title=Indian pushes for early economic accord with Indonesia |url=http://news.biharprabha.com/2014/04/indian-pushes-for-for-early-economic-accord-with-indonesia/|work=IANS|date=24 April 2014|publisher=news.biharprabha.com|access-date=24 April 2014}}

• Indonesia-Pakistan Free Trade Agreement ({{Flag|Indonesia}}-{{Flag|Pakistan}} FTA); Negotiations launched: January 2019
• Indonesia-Canada Comprehensive Economic Partnership Agreement ({{Flag|Indonesia}}-{{Flag|Canada}} CEPA); Negotiations launched: 20 June 2020
• Indonesia-European Union Comprehensive Economic Partnership Agreement ({{Flag|Indonesia}}-{{Flag|EU}} CEPA); Negotiations launched: 18 July 2016
• Indonesia-Tunisia Preferential Trade Agreement ({{Flag|Indonesia}}-{{Flag|Tunisia}} PTA); Negotiations launched: 25 June 2018
• Indonesia-Morocco Preferential Trade Agreement ({{Flag|Indonesia}}-{{Flag|Morocco}} PTA); Negotiations Launched: 23 January 2019
• Indonesia-Eurasian Economic Union Free Trade Agreement ({{Flag|Indonesia}}-{{Flag|Eurasian Economic Union}} FTA); Negotiations Launched: 3 April 2023
• Indonesia-Peru Comprehensive Economic Partnership Agreement ({{Flag|Indonesia}}-{{Flag|Peru}} CEPA); Negotiations Launched: 15 August 2023
• Indonesia-Türkiye Comprehensive Economic Partnership Agreement ({{Flag|Indonesia}}-{{Flag|Turkey}} CEPA); Negotiations Launched: 6 July 2017
• Indonesia-India Comprehensive Economic Cooperation Arrangement ({{Flag|Indonesia}}-{{Flag|India}} CECA); Negotiations Launched: 4 October 2011
• ASEAN-Canada FTA ({{Flag|ASEAN}}-{{Flag|Canada}} FTA); Negotiations Launched: 17 November 2021

This is a chart of trend of Indonesia's GDP at market prices{{cite web|url=http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/weoselco.aspx?g=2001&sg=All+countries |title=Edit/Review Countries|publisher=Imf.org|date=14 September 2006|access-date=29 August 2011}} by the IMF with figures in millions of rupiah.

For purchasing power parity comparisons, the exchange rate for 1 US dollar is set at 3,094.57 rupiah.

Average net wage in Indonesia varies by sector. In February 2017 the electricity, gas, and water sector has the highest average net wage, while the agriculture sector has the lowest.{{Cite web|url=https://www.statista.com/statistics/711736/average-net-wage-by-sector-indonesia/|title=Indonesia: average net wage by sector 2017 {{!}} Statistic|website=Statista|access-date=2018-01-28}}

{{see also|List of main infrastructure projects in Indonesia}}

File:Bursa Efek Jakarta - panoramio.jpg building in Jakarta.]]

Since the late 1980s, Indonesia has made significant changes to its regulatory framework to encourage economic growth. This growth was financed mostly from private investment, both foreign and domestic. US investors dominated the oil and gas sector and undertook some of Indonesia's largest mining projects. In addition, the presence of US banks, manufacturers, and service providers expanded, especially after the industrial and financial sector reforms of the 1980s. Other major foreign investors included India, Japan, the UK, Singapore, the Netherlands, Qatar, Hong Kong, Taiwan and South Korea.

The 1997 crisis made continued private financing imperative but problematic. New foreign investment approvals fell by almost two-thirds between 1997 and 1999. The crisis further highlighted areas where additional reform was needed. Frequently cited areas for improving the investment climate were the establishment of a functioning legal and judicial system, adherence to competitive processes, and adoption of internationally acceptable accounting and disclosure standards. Despite improvements of laws in recent years, Indonesia's intellectual property rights regime remains weak, and lack of effective enforcement is a significant concern. Under Suharto, Indonesia had moved towards the private provision of public infrastructure, including electric power, toll roads, and telecommunications. The 1997 crisis brought to light a severe weakness in the process of dispute resolution, however, particularly in the area of private infrastructure projects. Although Indonesia continued to have the advantages of a large labour force, abundant natural resources and modern infrastructure, private investment in new projects largely ceased during the crisis.

As of 28 June 2010, the Indonesia Stock Exchange had 341 listed companies with a combined market capitalization of $269.9 billion.Bloomberg Terminal As of November 2010, two-thirds of the market capitalization was in the form of foreign funds, and only around 1% of the population have stock investments.{{cite web|url=http://www.thejakartapost.com/news/2010/11/05/economy-risks-losing-momentum-experts.html|title=Economy risks losing momentum: Experts|work=The Jakarta Post|date=26 November 2010|access-date=29 August 2011}} Efforts are further being made to improve the business and investment environment. Within the World Bank's Doing Business Survey,{{cite web|url=http://www.doingbusiness.org/economyrankings/|title=Doing Business Survey, World Bank|publisher=Doingbusiness.org|access-date=29 August 2011}} Indonesia rose to 122 out of 178 countries in 2010, from 129 in the previous year. Despite these efforts, the rank is still below regional peers, and an unfavorable investment climate persists. For example, potential foreign investors and their executive staff cannot maintain their own bank accounts in Indonesia, unless they are tax-paying local residents (paying tax in Indonesia for their worldwide income).{{citation needed|date=November 2008}}

From 1990 to 2010, Indonesian companies have been involved in 3,757 mergers and acquisitions as either acquirer or target with a total known value of $137 billion.{{cite web|url=http://www.imaa-institute.org/statistics-mergers-acquisitions.html#MergersAcquisitions_Indonesia|title=Statistics on Mergers & Acquisitions (M&A)|publisher=Imaa-institute.org|access-date=29 August 2011|archive-url=https://web.archive.org/web/20120106045040/http://www.imaa-institute.org/statistics-mergers-acquisitions.html#MergersAcquisitions_Indonesia|archive-date=6 January 2012|url-status=dead}} In 2010, 609 transactions were announced, which is a new record. Numbers had increased by 19% compared to 2009. The value of deals in 2010 was US$17 billion, which is the second-highest number ever. In 2012, Indonesia realized total investments of $32.5 billion, surpassing its annual target $25 billion, as reported by Investment Coordinating Board (BKPM) on 22 January. The primary investments were in the mining, transport and chemicals sectors.{{Cite news|title=Indonesia aims to boost FDI by 23%|publisher=Investvine.com|date=24 January 2013|url=http://investvine.com/indonesia-seeks-to-boost-fdi-by-23/|access-date=26 January 2013|archive-date=23 October 2013|archive-url=https://web.archive.org/web/20131023141024/http://investvine.com/indonesia-seeks-to-boost-fdi-by-23/|url-status=dead}} In 2011, the Indonesian government announced a new Masterplan (known as the MP3EI, or Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia, the Masterplan to Accelerate and Expand Economic Development in Indonesia). The aim was to encourage increased investment, particularly in infrastructure projects across Indonesia.A copy of the Masterplan is available at the website of the Indonesian [http://www.ekon.go.id/media/filemanager/2011/07/06/m/p/mp3ei-english_final.pdf Coordinating Ministry for Economic Affairs]. {{Webarchive|url=https://web.archive.org/web/20120908091511/http://www.ekon.go.id/media/filemanager/2011/07/06/m/p/mp3ei-english_final.pdf |date=8 September 2012 }}.

Indonesia regained its investment grade rating from Fitch Rating in late 2011, and from Moody's Rating in early 2012, after losing it in the 1997 crisis, during which Indonesia spent more than Rp. 450 trillion ($50 billion) to bail out lenders from banks.{{Citation needed|date=November 2014}} Fitch raised Indonesia's long-term and local currency debt rating to BBB− from BB+ with both ratings is stable. Fitch also predicted that the economy would grow at least 6% on average per year through 2013, despite a less conducive global economic climate. Moody's raised Indonesia's foreign and local currency bond ratings to Baa3 from Ba1 with a stable outlook.{{cite web|url=http://www.thejakartaglobe.com/business/moodys-also-says-indonesia-economy-now-investment-grade/492255|title=Moody's Also Says Indonesia Economy Now Investment Grade|date=18 January 2012|access-date=20 May 2012|archive-url=https://web.archive.org/web/20120423130447/http://www.thejakartaglobe.com/business/moodys-also-says-indonesia-economy-now-investment-grade/492255|archive-date=23 April 2012|url-status=dead}} In May 2017, S&P Global raised Indonesia's investment grade from BB+ to BBB− with a stable outlook, due to the economy experiencing a rebound in exports and strong consumer spending during early 2017.{{Cite news|url=https://www.bloomberg.com/news/articles/2017-05-19/s-p-upgrades-indonesia-to-investment-grade-amid-stronger-growth|title=Indonesia Raised to Investment Grade by S&P on Budget Curbs|date=2017-05-19|work=Bloomberg.com|access-date=2018-01-28}}

Indonesia's foreign direct investment surged 44.2% on a yearly basis in 2022, with the base metals sector drawing in the biggest inflows. Indonesia's received 654.4 trillion rupiah worth of FDI last year, or equivalent to $45.6 billion in the investment ministry's official calculation, which assumes an exchange rate of 14,350 to the dollar. The data excludes investment in the banking and oil and gas sectors. Foreign direct investment in base metals and mining reached $11 billion and $5.1 billion, respectively, last year, the biggest recipients of FDI. The biggest sources were Singapore, China and Hong Kong. Total investment, including from domestic sources, reached 1,207.2 trillion rupiah ($81.02 billion), roughly in line with the government's target. FDI in the final quarter of last year was up 43.3% on an annual basis, amounting to 175.2 trillion rupiah in rupiah terms, or $12.2 billion in the official U.S. dollar equivalent.{{Cite news |title=Indonesia's FDI jumps in 2022, led by mineral processing |url=https://www.reuters.com/markets/asia/indonesias-fdi-jumps-2022-led-by-mineral-processing-2023-01-24/ |access-date=2023-05-14 |website=reuters |date=24 January 2023 |language=en |last1=Sulaiman |first1=Stefanno |last2=Suroyo |first2=Gayatri }}

List of the 10 largest foreign investment origin countries in Indonesia :

Foreign direct investment into Indonesia (excluding investment in banking and the oil and gas sectors) increased 20.2 percent year-on-year to a new record peak of IDR 177 trillion (US$11.96 billion) in the Q1 of 2023, amid efforts by the government to ease business and licensing rules. Singapore (US$4.3 billion) was the biggest source of investment, followed by Hong Kong (US$1.5 billion), China (US$1.2 billion), and Japan (US$1 billion) while base metals were the biggest recipient amid efforts to boost investment in processed minerals. In total, Indonesia recorded IDR 328.9 trillion of foreign and domestic investment during the first quarter, up 16.5 percent from a year earlier, boosted by a rise in investment in base metals, transportation, and the mining sector. For 2023, the government has set a target to draw IDR 1,400 trillion (US$95.5 billion) of investment from domestic and foreign sources.{{Cite web |title=Indonesia Attracts Rp 328.9 Trillion Investment in Q1-2023 |url=https://jakartaglobe.id/business/indonesia-attracts-rp-3289-trillion-investment-in-q12023 |access-date=2023-05-14 |website=jakartaglobe |language=en}}

{{See also|List of largest companies in Indonesia}}

Indonesia has 1 company that rank in the Fortune Global 500 ranking for 2023.{{Cite web |title=Fortune Global 500 List 2022: See Who Made It |url=https://fortune.com/ranking/global500/2022/search/?Country+%2F+Territory=Indonesia |access-date=2023-01-13 |website=Fortune |language=en}}

Indonesia has 9 companies that rank in the Forbes Global 2000 ranking for 2024.{{Cite web |title=The Global 2000 2024 |url=https://www.forbes.com/lists/global2000/ |access-date=2024-06-16 |website=Forbes |language=en}}

{{sticky header}}{{table alignment}}{{static row numbers}}{{sort under}}

In 2015, total public spending was Rp 1,806 trillion (US$130.88 billion, 15.7% of GDP). Government revenues, including those from state-owned enterprises (BUMN), totaled Rp 1,508 trillion (US$109.28 billion, 13.1% of GDP) resulting in a deficit of 2.6%.{{cite web|title=Indonesia Economic Quarterly – January 2017|date=5 May 2013|pages=1–9|url=http://pubdocs.worldbank.org/en/498431484555383546/IEQ-JAN-2017-ENG.pdf|publisher=World Bank|access-date=18 August 2017|last1=Procee|first1=Paul|archive-url=https://web.archive.org/web/20170204202327/http://pubdocs.worldbank.org/en/498431484555383546/IEQ-JAN-2017-ENG.pdf|archive-date=4 February 2017|url-status=dead}} Since the 1997 crisis that caused an increase in debt and public subsidies and a decrease in development spending, Indonesia's public finances have undergone a major transformation. As a result of a series macroeconomic policies, including a low budget deficit, Indonesia is considered to have moved into a situation of financial resources sufficiency to address development needs. Decentralization, enacted during the Habibie administration, has changed the manner of government spending, which has resulted in around 40% of public funds being transferred to regional governments by 2006.

In 2005, rising international oil prices led to the government's decision of slashing fuel subsidies. It led to an extra US$10 billion for government spending on development,{{cite web|url=http://siteresources.worldbank.org/INTINDONESIA/Resources/Publication/280016-1168483675167/PEReport.pdf|title=Spending for Development: Making the Most of Indonesia's New Opportunities Indonesia Public Expenditure Review 2007|access-date=29 August 2011|archive-url=https://web.archive.org/web/20070809233828/http://siteresources.worldbank.org/INTINDONESIA/Resources/Publication/280016-1168483675167/PEReport.pdf|archive-date=9 August 2007|url-status=dead}} and by 2006, there were an additional 5 billion due to steady growth, and declining debt service payments. It was the country's first "fiscal space" since the revenue windfall during the 1970s oil boom. Due to decentralization and fiscal space, Indonesia has the potential to improve the quality of its public services. Such potential also enables the country to focus on further reforms, such as the provision of targeted infrastructure. Careful management of allocated funds has been described as Indonesia's main issue in public expenditure.{{cite web|url=http://www.dlprog.org/ftp/download/Public%20Folder/test%20folder/The%20Politics%20of%20Free%20Public%20Services%20in%20Decentralised%20Indonesia.pdf|title=The Politics of Free Public Services in Decentralized Indonesia|access-date=3 March 2015|archive-url=https://web.archive.org/web/20120330223634/http://www.dlprog.org/ftp/download/Public%20Folder/test%20folder/The%20Politics%20of%20Free%20Public%20Services%20in%20Decentralised%20Indonesia.pdf|archive-date=30 March 2012|url-status=dead}}

In 2018, President Joko Widodo substantially increased the amount of debt by taking foreign loans. Indonesia has increased the debt by Rp 1,815 trillion compared to his predecessor, SBY. He has insisted that the loan is used for productive long-term projects such as building roads, bridges, and airports.{{Cite web|url=https://nasional.kompas.com/read/2018/10/23/07584441/jokowi-utang-indonesia-kecil-dibanding-negara-lain|title=Jokowi: Utang Indonesia Kecil Dibanding Negara Lain|last=Ihsanuddin|editor-last=Maharani|editor-first=Dian|publisher=Kompas Cyber Media|location=Jakarta|date=2018-10-23|website=KOMPAS.com|language=id|access-date=2018-12-18}} Finance Minister Sri Mulyani also stated that despite an increase of foreign loans and debt, the government has also increased the budget for infrastructure development, healthcare, education, and budget given to regencies and villages.{{Cite web|url=https://katadata.co.id/berita/2018/10/23/sri-mulyani-jelaskan-manfaat-kenaikan-utang-rp-1329-t-di-era-jokowi|title=Sri Mulyani Jelaskan Manfaat Kenaikan Utang Rp 1.329 T di Era Jokowi - Katadata News|website=katadata.co.id|last=Alika|first=Rizky|date=23 October 2018|access-date=2018-12-18}} The government is insisting that foreign debt is still under control, and complying with relevant laws that limit debt to be under 60% of GDP.{{Cite web|url=http://vibiznews.com/2018/12/17/utang-luar-negeri-indonesia-tetap-terkendali/|title=Utang Luar Negeri Indonesia Tetap Terkendali {{!}} Vibiznews|last=Belinda|date=17 December 2018 |language=en-US|access-date=2018-12-18}}

Based on the regional administration implementation performance evaluation of 2009, by order, the best performance were:

• 3 provinces: North Sulawesi, South Sulawesi, and Central Java;
• 10 regencies: Jombang, Bojonegoro and Pacitan in East Java Province, Sragen in Central Java, Boalemo in Gorontalo, Enrekang in South Sulawesi, Buleleng in Bali, Luwu Utara in South Sulawesi, Karanganyar in Central Java, and Kulon Progo in Yogyakarta;
• 10 cities: Surakarta and Semarang in Central Java, Banjar in West Java, Yogyakarta city in Yogyakarta, Cimahi in West Java, Sawahlunto in West Sumatra, Probolinggo and Mojokerto in East Java, and Sukabumi and Bogor in West Java.{{cite web|url=http://waspada.co.id/index.php?option=com_content&view=article&id=189842:govt-names-23-regions-with-best-performance&catid=30:english-news&Itemid=101|title=Govt names 23 regions with best performance|publisher=Waspada.co.id|date=25 April 2011|access-date=29 August 2011}}

Based on JBIC Fiscal Year 2010 survey (22nd Annual Survey Report) found that in 2009, Indonesia has the highest satisfaction level in net sales and profits for Japanese companies.{{cite news|url=http://www.thejakartapost.com/news/2011/06/06/the-power-nature-and-indonesia’s-economy.html|title=The power nature and Indonesia's economy|newspaper=The Jakarta Post|date=6 June 2011|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110827062831/http://www.thejakartapost.com/news/2011/06/06/the-power-nature-and-indonesia%E2%80%99s-economy.html|archive-date=27 August 2011|url-status=dead}}

{{See also|List of Indonesians by net worth}}

File:Countries by total wealth (trillions_USD), Credit Suisse.png

National net wealth, also known as national net worth, is the total sum of the value of a nation's assets minus its liabilities. It refers to the total value of net wealth possessed by the citizens of a nation at a set point in time.{{cite web|url=http://eng.stat.gov.tw/ct.asp?xItem=9357&ctNode=1641|title=National Statistics, Republic of China (Taiwan)|work=stat.gov.tw|access-date=9 August 2016}} This figure is an important indicator of a nation's ability to take on debt and sustain spending and is influenced not only by real estate prices, equity market prices, exchange rates, liabilities and incidence in a country of the adult population but also by human resources, natural resources and capital and technological advancements, which may create new assets or render others worthless in the future. According to Credit Suisse, Indonesia has national net wealth of approximately $3.199 trillion, or about 0.765% of world net wealth, placing Indonesia at 17th, above Russia, Brazil, and Sweden.{{cite web|url=https://www.credit-suisse.com/media/assets/corporate/docs/about-us/research/publications/global-wealth-databook-2021.pdf|title=Global wealth databook 2021|date=June 2021|publisher=Credit Suisse|archive-url=https://web.archive.org/web/20210623101415/https://www.credit-suisse.com/media/assets/corporate/docs/about-us/research/publications/global-wealth-databook-2021.pdf|archive-date=23 June 2021|url-status=live}}

According to Asia Wealth Report, Indonesia has the highest growth rate of high-net-worth individuals (HNWI) predicted among the 10 largest Asian economies.{{cite web|url=http://www.thejakartaglobe.com/home/close-to-100000-super-rich-indonesians-by-2015-report/462954|title=Close to 100,000 Super Rich Indonesians By 2015: Report|date=2 September 2011|access-date=2 September 2011|archive-url=https://web.archive.org/web/20120928142145/http://www.thejakartaglobe.com/home/close-to-100000-super-rich-indonesians-by-2015-report/462954|archive-date=28 September 2012|url-status=dead}} The 2015 Knight Frank Wealth Report reported that in 2014 there were 24 individuals with a net worth above US$1 billion. 18 of them lived in Jakarta while the others were spread among other large cities in Indonesia. 192 persons can be categorized as centamillionaires with over US$100 million of wealth and 650 persons as high-net-worth individuals whose wealth exceeded US$30 million.{{cite web|url=http://properti.kompas.com/read/2015/03/19/110000721/18.Konglomerat.Indonesia.Tinggal.di.Jakarta|title=18 Konglomerat Indonesia Tinggal di Jakarta|author=Hilda B Alexander|date=19 March 2015}}

File:KPKHQ.jpg) has been viewed more negatively by the public.]]

Corruption is pervasive in the Indonesian government, affecting many fields that are central to barrier the country's economic development from local governments, the police, the private sector even various ministerial institutions which are close to the president.{{cite news |last1=Karmini |first1=Niniek |title=Indonesia's social minister named suspect in million-dollar bribery case |url=https://www.smh.com.au/world/asia/indonesia-s-social-minister-named-suspect-in-million-dollar-bribery-case-20201206-p56l12.html |access-date=6 December 2020 |publisher=The Sydney Morning Herald |date=6 December 2020}}{{cite news |last1=Connors |first1=Emma |title=Indonesian cabinet minister arrested in corruption probe |url=https://www.afr.com/world/asia/indonesian-cabinet-minister-arrested-in-corruption-probe-20201125-p56hu0 |access-date=25 November 2020 |publisher=The Australian Financial Review |date=25 November 2020}} It is related to problems of human capacities and technical resources remains a major challenge in merging effectiveness and integrity in public administration, especially in regencies and cities.[http://www.oecd.org/gov/ethics/integrityframework-for-public-investment-9789264251762-en.htm OECD (2016), Integrity Framework for Public Investment] OECD Publishing A 2018 World Economic Forum survey reports that corruption is the most problematic issue regarding doing business in Indonesia, as well as inefficient government bureaucracy policies. The survey also showed that 70% of entrepreneurs believe that corruption has grown in Indonesia, while low trust in the private sector is a major obstacle to foreign investment in the country.[http://www3.weforum.org/docs/GCR2017-2018/03CountryProfiles/Standalone2-pagerprofiles/WEF_GCI_2017_2018_Profile_Indonesia.pdf Most problematic factors for doing business in Indonesia], {{webarchive |url=https://web.archive.org/web/20171118170050/http://www3.weforum.org/docs/GCR2017-2018/03CountryProfiles/Standalone2-pagerprofiles/WEF_GCI_2017_2018_Profile_Indonesia.pdf |date=18 November 2017 }}, World Economic Forum

In 2019, a controversial bill regarding the anti-corruption body (Corruption Eradication Commission (KPK)) reduced the commission's effectiveness in tackling widespread corruption problems and stripped its independence was passed despite massive protests across the country.{{Cite web|url=https://coconuts.co/jakarta/news/parliament-ratifies-controversial-revisions-to-law-governing-indonesias-corruption-eradication-commission/|title = Parliament ratifies controversial revisions to law governing Indonesia's Corruption Eradication Commission | Coconuts Jakarta|date = 17 September 2019}}"Suharto with a saw: Indonesia is lurching back into authoritarianism with Joko Widodo at the helm", (October 2020) The Economist There were 26 points in the revised law that crippled the commission and might further undermine efforts to eradicate corruption in Indonesia.[https://jakartaglobe.id/context/corruption-not-kpk-the-main-obstacle-to-investment-in-indonesia-antigraft-agency-says Corruption, Not KPK, the Main Obstacle to Investment in Indonesia, Antigraft Agency Says], 25 September 2019 Jakarta Globe

As of 2011, labour militancy was growing with a major strike at the Grasberg mine, the world's largest gold mine as well as the second-largest copper mine,{{cite web|title=Grasberg Open Pit, Indonesia|url=http://www.mining-technology.com/projects/grasbergopenpit|website=Mining Technology|access-date=16 October 2017}} and numerous strikes elsewhere. A common issue was the attempts by foreign-owned enterprises to evade Indonesia's strict labour laws by calling their employees' contract workers. The New York Times expressed concern that Indonesia's cheap labor advantage might be lost. However, a large pool of the unemployed who will accept substandard wages and conditions remains available. One factor in the increase of militancy is increased awareness via the Internet of prevailing wages in other countries, and the generous profits foreign companies are making in Indonesia.{{cite news|title=As Indonesia Grows, Discontent Sets in Among Workers|url=https://www.nytimes.com/2011/12/27/business/global/as-indonesia-prospers-discontent-sets-in-among-workers.html |archive-url=https://ghostarchive.org/archive/20220103/https://www.nytimes.com/2011/12/27/business/global/as-indonesia-prospers-discontent-sets-in-among-workers.html |archive-date=2022-01-03 |url-access=subscription |url-status=live|access-date=27 December 2011|newspaper=The New York Times|date=26 December 2011|first=Sara|last=Schonhardt}}{{cbignore}}

On 1 September 2015, thousands of workers in Indonesia staged large demonstrations across the country in pursuit of higher wages and improved labour laws. Approximately 35,000 people rallied in total. They demanded a 22% to 25% increase in the minimum wage by 2016 and lower prices on essential goods, including fuel. The unions also want the government to ensure job security and ensure the fundamental rights of the workers.{{cite news|title=Textile workers protest for new minimum wage in Indonesia|url=http://banglaapparel.com/en/news/2015-09-09_14:04:47:0.424106001441785887.en.html|newspaper=BanglaApparel.com|date=9 September 2015|first=Kaniz|last=Fatima|access-date=9 September 2015|archive-url=https://web.archive.org/web/20150923163508/http://banglaapparel.com/en/news/2015-09-09_14:04:47:0.424106001441785887.en.html|archive-date=23 September 2015|url-status=dead}}

In 2020, thousands of workers across the country held a massive march to protest against the Omnibus Law on Job Creation that included several controversial rules, which revised minimum wages, lowered severance pay, relaxed firing rules, among other disadvantaging regulations for labors and factory workers.{{Cite web|last=Afifa|first=Laila|date=2020-02-12|title=Omnibus Is Throwing People and Democracy under the Bus|url=https://en.tempo.co/read/1306889/omnibus-is-throwing-people-and-democracy-under-the-bus|access-date=2020-11-21|website=Tempo|language=en}}{{Cite web|last=Bhwana|first=Petir Garda|date=2020-11-17|title=Jokowi Asserts No Perpu to Revoke Job Creation Law|url=https://en.tempo.co/read/1406025/jokowi-asserts-no-perpu-to-revoke-job-creation-law|access-date=2020-11-21|website=Tempo|language=en}}{{Cite web|last=Hakim|first=Rakhmat Nur|editor-last=Erdianto|editor-first=Kristian|publisher=Kompas Cyber Media|location=Jakarta|title=Jokowi Sebut Protes terhadap UU Cipta Kerja Akan Ditampung di PP dan Perpres|url=https://nasional.kompas.com/read/2020/11/16/22110361/jokowi-sebut-protes-terhadap-uu-cipta-kerja-akan-ditampung-di-pp-dan-perpres|access-date=2020-11-21|website=KOMPAS.com|date=16 November 2020|language=id}}

Economic disparity and the flow of natural resource profits to Jakarta has led to discontent and contributed to separatist movements in areas such as Aceh and Papua. Geographically, the poorest fifth regions account for just 8% of consumption, while the wealthiest fifth account for 45%. While there are new laws on decentralization that may address the problem of uneven growth and satisfaction partially, there are many hindrances in putting this new policy into practice.{{cite web|url=http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Indonesia-POVERTY-AND-WEALTH.html#ixzz1FB50TL4X |title=Indonesia Poverty and wealth, Information about Poverty and wealth in Indonesia |publisher=Nationsencyclopedia.com |access-date=29 August 2011}} At a 2011 Makassar Indonesian Chamber of Commerce and Industry (Kadin) meeting, Disadvantaged Regions Minister said there are 184 regencies classified as disadvantaged areas, with around 120 in eastern Indonesia.{{cite web|url=http://www.thejakartapost.com/news/2011/04/04/120-poor-regencies-are-east.html|title=120 poor regencies are in the east|work=The Jakarta Post|date=18 July 2011|access-date=29 August 2011}} 1% of Indonesia's population has 49.3% of the country's $1.8 trillion wealth, down from 53.5%. However, it is ranked fourth after Russia (74.5%), India (58.4%) and Thailand (58%).{{cite web|url=http://jakartaglobe.id/business/indonesias-richest-one-percent-controls-nearly-half-nations-wealth-report/|title=Indonesia's Richest One% Controls Nearly Half of Nation's Wealth: Report|access-date=2 December 2016}}

Inflation has long been a problem in Indonesia. Because of political turmoil, the country once suffered hyperinflation, with 1,000% annual inflation between 1964 and 1967,By the time of Sukarno's downfall in the mid-1960s, the economy was in chaos with 1,000% annual inflation, shrinking export revenues, crumbling infrastructure, factories operating at minimal capacity, and negligible investment. Schwarz (1994), pages 52–57 resulting in severe poverty and hunger.{{cite web|url=http://www.welcome2indonesia.com/index.php?option=com_content&view=article&id=90:ir-soekarno-the-first-president-of-indonesia&catid=70:famous-people&Itemid=87|title=Ir Soekarno The First President of Indonesia|publisher=Welcome2indonesia.com|date=18 May 2010|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110718023555/http://www.welcome2indonesia.com/index.php?option=com_content&view=article&id=90:ir-soekarno-the-first-president-of-indonesia&catid=70:famous-people&Itemid=87|archive-date=18 July 2011|url-status=dead}} Even though the economy recovered quickly during the first decade of the New Order administration (1970–1981), never once was the inflation less than 10% annually. The inflation slowed during the mid-1980s; however, the economy was also languid due to the decrease in oil price that reduced its export revenue dramatically. The economy was again experiencing rapid growth between 1989 and 1997 due to the improving export-oriented manufacturing sector. Still, the inflation rate was higher than economic growth, and this caused a widening gap among Indonesians. Inflation peaked in 1998 during the 1997 crisis at over 58%, causing poverty to rise to the levels of the 1960s.{{cite web|url=http://www.imf.org/external/pubs/ft/weo/2010/02/weodata/weorept.aspx?pr.x=46&pr.y=15&sy=1980&ey=2000&scsm=1&ssd=1&sort=country&ds=.&br=1&c=536&s=PCPI%2CPCPIPCH&grp=0&a=|title=Report for Selected Countries and Subjects|publisher=Imf.org|date=14 September 2006|access-date=29 August 2011}} During the economic recovery and growth in recent years, the government has been trying to lower the inflation rate. However, it seems that inflation has been affected by global fluctuation and domestic market competition.{{cite web|url=http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/INDONESIAEXTN/0,,contentMDK:21517996~pagePK:141137~piPK:141127~theSitePK:226309,00.html|title=Indonesia – Financial & Private Sector Development in Indonesia|publisher=World Bank|date=18 October 2007|access-date=29 August 2011}} As of 2010, the inflation rate was approximately 7%, when its economic growth was 6%. To date, inflation is affecting the Indonesian lower middle class, especially those who are not able to afford food after price hikes.{{cite web|url=http://www.thejakartaglobe.com/bisindonesia/faced-with-skyrocketing-food-prices-indonesian-govt-to-speed-up-work-on-food-estate/415712|title=Faced With Skyrocketing Food Prices, Indonesian Govt to Speed Up Work on Food Estate|work=Jakarta Globe|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110717011136/http://www.thejakartaglobe.com/bisindonesia/faced-with-skyrocketing-food-prices-indonesian-govt-to-speed-up-work-on-food-estate/415712|archive-date=17 July 2011|url-status=dead}}{{cite web|url=http://www.forextradinglb.com/news.php?go=fullnews&newsid=1383|title=Indonesia Inflation Accelerates, Adding Pressure to Raise Rate :: Forex Trading Lebanon|publisher=Forextradinglb.com|date=1 February 2011|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110711020316/http://www.forextradinglb.com/news.php?go=fullnews&newsid=1383|archive-date=11 July 2011|url-status=dead}} At the end of 2017, Indonesia's inflation rate was 3.61%, or higher than the government-set forecast of 3.0–3.5%.{{Cite news|url=http://www.nasdaq.com/article/indonesias-dec-annual-inflation-rate-at-361-pct-above-forecast-20180101-00085|title=Indonesia's Dec annual inflation rate at 3.61 pct, above forecast|date=2018-01-01|work=NASDAQ.com|access-date=2018-01-28}}

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{{flag|Bermuda}} invest US$ 0.76 billion in 2022

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{{portal|Indonesia}}

{{div col|colwidth=18em}}

• Alcohol in Indonesia
• Bamboo network
• CIVETS countries
• COVID-19 pandemic in Indonesia
• Indonesia Stock Exchange
• Developing 8 Countries
• European Union-Indonesia trade relations
• G-20 major economies
• G20 developing nations
• Gas subsidies
• List of main infrastructure projects in Indonesia
• List of largest companies in Indonesia
• Next Eleven
• Science and technology in Indonesia
• Taxation in Indonesia
• Tourism in Indonesia

{{div col end}}

{{reflist|30em}}

{{reflist|group=note}}

• {{cite journal |last=Eng |first=Pierre van der |year=2010 |title=The sources of long-term economic growth in Indonesia, 1880–2008 |journal=Explorations in Economic History |volume=47 |issue=3 |pages=294–309 |doi=10.1016/j.eeh.2009.08.004 |url=https://www.cbe.anu.edu.au/researchpapers/econ/wp499.pdf |hdl=1885/26726 |s2cid=154260929 |hdl-access=free |archive-url=https://web.archive.org/web/20190429015546/https://www.cbe.anu.edu.au/researchpapers/econ/wp499.pdf |archive-date=29 April 2019 |url-status=live }}

• [https://web.archive.org/web/20121216061926/http://repository.library.georgetown.edu/handle/10822/552587 Indonesia Economic Aftershock] from the [https://web.archive.org/web/20160115205405/https://repository.library.georgetown.edu/handle/10822/552494 Dean Peter Krogh Foreign Affairs Digital Archives]
• [http://www.bkpm.go.id BKPM – Indonesia Investment Coordinating Board] {{Webarchive|url=https://web.archive.org/web/20201101101044/https://www2.bkpm.go.id/ |date=1 November 2020 }} And [https://investindonesia.go.id Indonesia Investment News]
• [https://amerta.kemenkumham.go.id/file/slot-demo/ Indonesian Investment coorporation] {{Webarchive|url=https://web.archive.org/web/20230119071910/https://amerta.kemenkumham.go.id/file/slot-demo/ |date=19 January 2023 }}
• [https://web.archive.org/web/20130518114909/http://www.quandl.com/indonesia Comprehensive current and historical economic data]
• [http://wits.worldbank.org/CountryProfile/Country/IDN/Year/2012/Summary World Bank Summary Trade Statistics Indonesia]
• Indonesia Trading Instrument [https://quotex-vip.com/ Quotex]

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