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Currency is the Indonesian Rupiah. Exchange rate is approximately 1 US $ = 8, 000 rupiah. GDP is approximately 960 billion dollars. GDP growth rate is four percent. GDP per capita based on purchasing power parity is $ 4, 600.
Natural resources include petroleum, tin, natural gas, nickel, timber, bauxite, copper, coal, gold and silver. Industries include petroleum and natural gas, textiles, mining, cement, chemical fertilizers, plywood, rubber, foodstuffs and tourism. Agricultural products include rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, copra, poultry, beef, pork and eggs. Major exports are textiles / garments , wood products, electronics and footwear. Major imports are manufactures, raw materials, foodstuffs and fuels. Economy overview: The collapse of the rupiah in late 1997 and early 1998 caused GDP to contract by an estimated 13. 7 % in 1998 because of Indonesian firms' reliance on short-term dollar-denominated debt and high levels of nonperforming loans in the banking sector.
The Indonesian Government initially wavered on meeting the conditions it agreed to in exchange for a $ 42 billion IMF assistance package, contributing to further loss in investor confidence and outflows of capital. Riots that in many cases targeted ethnic Chinese business owners also set back chances that Indonesia would quickly stabilize its financial crisis and contributed to President SOEHARTO's resignation on 21 May 1998. His successor, B. J. HABIBIE, improved cooperation with the IMF. The money supply which expanded rapidly early in the year to prop up banks hit by deposit runway tightened within a few months, and by October, inflation which reached a 77 % annual rates significantly dampened.
The government also announced a bank recapitalization program in late 1998, but by early 1999 the plan faced growing challenges over its reliance on public funds. Doubts about whether the program is adequate underlie forecasts of continued although much less severe GDP contraction for 1999. Signs of spreading unrest and sectarian violence and concern that social instability will increase as the 7 June 1999 national election approaches also contribute to pessimism about the economy, particularly because foreign investors remain reluctant to begin to increase capital inflows again. The next government will face the challenge of establishing a macroeconomic policy framework that addresses longstanding grievances and inequities underlying much of the current unrest without hampering an economic recovery. GDP: purchasing power parity$ 602 billion (1998 est. ) GDP real growth rate: - 13. 7 % (1998 est. ) GDPper capita: purchasing power parity$ 2, 830 (1998 est. ) Household income or consumption by percentage share: Inflation rate (consumer prices): 77 % (1998 est. ) Labor force: 87 million (1997 est. ) Labor force occupation: agriculture 41 %, trade, restaurant, and hotel 19. 8 %, manufacturing 14 %, construction 4. 8 %, transport and communications 4. 75 %, other 15. 65 % (1997) Unemployment rate: 15 %- 20 % (1998 est. ) revenues: $ 35 billion (of which $ 15 billion is from international financial institutions) expenditures: $ 35 billion, including capital expenditures of $ 12 billion (FY 98 / 99 est. ) Industries: petroleum and natural gas; textiles, apparel, and footwear; mining, cement, chemical fertilizers, plywood; rubber; food; tourism Industrial production growth rate: - 13. 7 % (1998 est. ) Electricity production: 66. 8 billion kWh (1996) Electricity consumption: 66. 8 billion kWh (1996) Agriculture products: rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, copra; poultry, beef, pork, eggs Exports: $ 49 billion (f. o.
b. , 1998 est. ) Exportscommodities: garments 7. 9 %, textiles 7. 3 %, gas 6. 4 %, electrical appliances 5. 9 %, pulp and paper 5. 3 %, oil 4. 7 %, plywood 4. 7 % Exports partners: Japan 18 %, EU 15 %, US 14 %, Singapore 13 %, South Korea 5 %, Hong Kong 4 %, China 3. 9 %, Taiwan 3. 4 % (1998 est. ) Imports: $ 24 billion (f. o. b. , 1998 est. ) Importscommodities: manufactures 75. 3 %, raw materials 9. 0 %, foodstuffs 7. 8 %, fuels 7. 7 % Imports partners: Japan 20 %, US 13 %, Germany 9 %, Singapore 9 %, Australia 6. 4 %, South Korea 5. 4 %, Taiwan 3. 4 %, China 3. 1 % (1998 est. ) Debt external: $ 136 billion (yearend 1997 est. ) Economic aid recipient: $ 43 billion from IMF program and other official external financing (1997 - 2000) Exchange rates: Indonesian rupiahs (Rp) per US$ 18, 714. 3 (January 1999), 10, 013. 6 (1998), 2, 909. 4 (1997), 2, 342. 3 (1996), 2, 248. 6 (1995), 2, 160. 8 (1994) There are thousands of ethnic Chinese who bore the brunt of the May rioting and are resented by many Indonesians for their economic success. If rising confidence among them and multinational companies translates into a return of capital and new investment, the economy will begin bouncing back from last year's horrendous recession. The government estimates about $ 16 billion -- much of it owned by the ethnic-Chinese minority -- flowed out of the country in the first half of 1998. Of course, Indonesia is not yet past the post.
The result of the elections isn't due to be formally announced until June 21 and a new government won't be formed before November, when legislators select a president. While provisional tallies show Megawati's party won the most votes, it's less clear whether she will be able to cobble together a coalition that would ensure her enough seats to gain the presidency. The mood has shifted, " says Mark Baird, Indonesia director for the World Bank. "Indonesia is not a basket case any more. Now it's a place that can peacefully manage a democratic transition, with a lot of undervalued assets. " The five major vote winners in the election have also pledged to stick with the terms the $ 40 billion bailout package for Indonesia led by the International Monetary Fund. Many of the reasons that made Indonesia an attractive investment location before the crisis remain. There's vast natural wealth, a market of 200 million people and liberal foreign investment rules.
Signs of economic stabilization abound: GDP, which shrank by 14 % in 1998, rose 1. 4 % in the first quarter of this year, compared with the previous quarter; inflation has cooled to 38 % from over 70 % last year; the rupiah has strengthened and interest rates have fallen. The benchmark Jakarta stock index rose 12 % to a 23 -month high the day after the vote. It has since slid back, but remains at levels not seen since early 1998. "The momentum of stability is there, " says Kwik Kian Gie, Megawati's senior economic adviser. Recovery prospects need to be kept in perspective, however. The 7 % annual growth rate Indonesia enjoyed for almost 20 years is a thing of the past. The government is in the middle of a bank recapitalization programme that will cost about $ 80 billion -- the equivalent of 82 % of GDP, according to rating agency Standard & Poor's. "We are going to grow, but much flatter and much slower than in the past, " says Umar Jury, an economic adviser to Habibie.
Before Indonesia gained independence in 1945, the country's economy was oriented toward providing raw materials such as sugar and rubber for the Netherlands. To survive, most people relied on subsistence agriculture, primarily the production of rice. After independence, economic mismanagement was prevalent, but beginning in the 1960 s economic restructuring became a priority. Since then, agriculture's part in the economy has shrunk, and services and manufacturing have grown. Some 17 percent of all land is under cultivation, mostly on Java. Along with rice, sugar, and rubber, important crops are tobacco, cassava, maize, sweet potatoes, coconuts, sugarcane, soybeans, peanuts, tea, and coffee.
Indonesia's manufactures range from traditional crafts to aerospace products. The main products include food and beverages, tobacco products, textiles and garments, motor vehicle parts, and electrical appliances. Services restaurants and hotels, insurance, business services, and the linear an important part of Indonesia's economy. Tourism is growing. Mineral products include tin, bauxite, nickel, copper, coal, manganese, and iron ore.
Hardwoods make up almost all of the timber harvested in Indonesia; more than four-fifths of this harvest is used for fuel. Industrial woods produced in large quantities include teak, ebony, bamboo, and rattan. Indonesia is also the world's leading exporter of plywood. In fishing, the chief catches are shrimp and prawns, scad, carp, Indian mackerel, gold stripe sardine lla, milkfish, anchovies, and skipjack tuna. The rupiah is the official monetary unit of Indonesia (2342 rupiah equal U. S. $ 1; 1996).
V The Board of Governors assessed that the monetary up to November 1999 has been relatively in a stable condition as shown by the fact that prices on products and services are in control although there is a slight increase of inflation rate. Monthly inflation rate during November 1999 is relatively in a low level which is 0. 25 %, thus for the period of January to November 1999 inflation has achieved 0. 27 %. The price increases are in connection with fewer supplies due to seasonal factor and to increasing demands for the coming Ramadhan. The inflation rate pressure is driven by price increases on the demand side (underlying inflation) from 0. 11 % to 0. 23 %. Meanwhile the recent depreciated Rupiah exchange rate has also driven rises in inflation rate in particular via tradable goods. The monetary condition that is relatively stable during 1999 cannot be disconnected from the monetary policy that is tightly implemented by Bank Indonesia.
In relation with the Rupiah exchange rate development, the Board of Governors is of the opinion that weaken exchange rate lately is a result of market reaction towards Aceh and Y 2 K matters. During November Rupiah exchange rate has weaken as shown by the increasing Indonesia's SWAP and risk premium abroad. Meanwhile, Rupiah liquidity in the market is relax as shown by the fact that one and three month SBI (Bank Indonesia Certificate) interest rate on the latest action were respectively 12. 95 % and 13. 05 %. Furthermore the Board of Governors predicts that the real PDB (Gross Domestic Products) (year on year) during 1999 fourth quarter rises around 3. 2 % to 5. 1 %, an increase of 0. 54 % from that of 1999 third quarter.
From the demand side, the real PDB growth was mainly due to expansion of government and private consumption while from the sectoral side due to reasons on trade, hotel, restaurant, transportation, communication, and services sector. Growth can be faster when banking intermediary function recovers, which very much depends on banks and companies restructuring as well as settlement of private foreign loans. Thus the Board of Governors predicts the real PDB growth during 1999 will be around - 0. 5 % to 0 %, slightly better than last month prediction. The evaluation of Board of Governors, though there will be price increases related to the coming Ramadhan, Christmas, New Year and Id Fire, predicts that 1999 inflation rate will be about...
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