Using water buffalo to plough rice fields in Java. Agriculture has been the country’s largest employer for centuries.

Indonesia’s estimated Gross Domestic Product (GDP) for 2007 is US$408 billion (US$1,038 bn PPP).^[2] In 2007, estimated nominal per capita GDP is US$1,812, and per capita GDP PPP was US$4,616 (International Dollars).^[78] The services sector is the economy’s largest and accounts for 45.3% of GDP (2005). This is followed by industry (40.7%) and agriculture (14.0%).^[79] However, agriculture employs more people than other sectors, accounting for 44.3% of the 95 million-strong workforce. This is followed by the services sector (36.9%) and industry (18.8%).^[80] Major industries include petroleum and natural gas, textiles, apparel, and mining. Major agricultural products include palm oil, rice, tea, coffee, spices, and rubber.

Indonesia’s main export markets are Japan (22.3% of Indonesian exports in 2005), the United States (13.9%), China (9.1%), and Singapore (8.9%). The major suppliers of imports to Indonesia are Japan (18.0%), China (16.1%), and Singapore (12.8%). In 2005, Indonesia ran a trade surplus with export revenues of US$83.64 billion and import expenditure of US$62.02 billion. The country has extensive natural resources, including crude oil, natural gas, tin, copper, and gold. Indonesia’s major imports include machinery and equipment, chemicals, fuels, and foodstuffs.^[81]

Jakarta, the capital of Indonesia and its largest commercial center

In the 1960s, the economy deteriorated drastically as a result of political instability, a young and inexperienced government, and ill-disciplined economic nationalism, which resulted in severe poverty and hunger.^[82] Following President Sukarno’s downfall in the mid-1960s, 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.^[83] Indonesia is Southeast Asia’s only member of OPEC, and the 1970s oil price raises provided an export revenue windfall that contributed to sustained high economic growth rates.^[84] Following further reforms in the late 1980s,^[85] foreign investment flowed into Indonesia, particularly into the rapidly developing export-orientated manufacturing sector, and from 1989 to 1997, the Indonesian economy grew by an average of over 7%.^[86]

Indonesia was the country hardest hit by the East Asian financial crisis of 1997–98. Against the US dollar, the currency dropped from about Rp. 2,000 to Rp. 18,000, and the economy shrunk by 13.7%.^[87] The rupiah has since stabilized at around Rp. 10,000, and there has been a slow but significant economic recovery. Political instability since 1998, slow economic reform, and corruption at all levels of government and business, have contributed to the patchy nature of the recovery.^[88] (Transparency International, for example, ranked Indonesia 143rd out of 180 countries in its 2007 Corruption Perceptions Index).^[89] GDP growth, however, exceeded 5% in both 2004 and 2005, and is forecast to increase further.^[90] This growth rate, however, is not enough to make a significant impact on unemployment,^[91] and stagnant wages growth, and increases in fuel and rice prices have worsened poverty levels.^[92] As of 2006, an estimated 17.8% of the population live below the poverty line, and 49.0% of the population live on less than US$2 per day.^[93]

SOURCE : http://en.wikipedia.org/wiki/Indonesia