Formerly a Dutch colony, Indonesia became a republic on 17 August 1945. It gained complete independence in 1949 following the withdrawal of Dutch troops. The first President of the Republic, Ahmed Sukarno, after having united the country, set up a regime that was characterised by state intervention in the economy and non-alignment in foreign policy.
On 30 September 1965, following a coup d’état, power was taken by the army headed by Mohamed Suharto (proclaimed President in 1967 and several times re-elected up until 1998); the Communist Party was outlawed and the subsequent repression caused hundreds of thousands of victims.
In 1999, a process of democratic transition began: after President Abdurrahman Wahid was removed from office for corruption in 2001, Megawati Sukarnoputri, daughter of former President Sukarno, took his place.
In 2002, after a 24-year struggle for liberation, the former Portuguese colony of East Timor, unilaterally annexed by Indonesia in 1976, gained independence. The GAM (Movement for Free Aceh) laid down its arms following the 2005 peace agreement. The influence of integralist Islam has been spreading, and the state has been monitoring groups with links to global terrorism (Jemaah Islamiyah in particular). In Papua, the separatist Free Papua Movement is active. Between 1999 and 2001 a bloody civil war was fought between the Christian and Muslim communities in the Moluccas, where the situation remains tense.
On the basis of the 1945 Constitution, amended several times, the President of the Republic, who is also head of the government, is elected by direct suffrage for a term of five years; the Chamber of Representatives, with 575 members, is supported by a Council of Regional Representatives (136 members), both elected for five years.

Defence.
On 1 April 1999, a police force was set up in order to replace the army in functions related to public order.

Justice.
The judicial system is based on Dutch law, with local influences.

Population by age and gender (% - 2020)
	75+ 60-74 45-59 30-44 15-29 0-14
MALE	AGE	FEMALE

The population is made up of approximately 300 different races, sub-divided into two large groups: Proto-Malay (to which belong peoples with primitive social and economic forms of organisation, such as the Dayaks and the Muruts in Borneo) and Deuter-Malays (of Muslim religion and Malay language).

Economic situation.
The pandemic interrupted a decade of strong annual growth in GDP, primarily driven by domestic demand. The loss of jobs, however, has not helped an economy that was already struggling to provide enough employment for the influx of workers from new generations. In an attempt to prop up the economy, the executive branch has borrowed to fund a support plan for businesses, subsidies for low-income families and financial aid for the public health sector. In 2021, the growth rate turned positive.

Primary sector
Agriculture and forests.
Agriculture is practised intensively above all on the island of Java: the main crop is rice, followed by cassava, maize and sweet potatoes. The more commercially-oriented crops include palm oil (Borneo and Sumatra), sugar cane (Java), natural rubber, coconut palm, bananas, tea (western Java), coffee (eastern Java) and cocoa. Forests are often threatened by fires (set alight by farmers in order to gain fertile land) and excessive deforestation, which is also illegal.
Livestock and fishing.
Cattle-farming is significant, carried out in Bali and the less populated islands; buffaloes, sheep and also pigs are widespread (even though most of the population is Muslim).
Fishing is a primary source of food for the population; it is not only carried out in coastal areas (mackerel, sardines, tuna, shellfish and molluscs), but also in rivers and lakes (carp). Fish-farming is also developed (groupers and seaweeds). Large profits are also derived from the concession of fishing licences to foreign fleets.

Secondary sector
Minerals.
Oil reserves are constantly diminishing and the country, after returning in January 2016, withdrew from OPEC in December of the same year. In Borneo there are the oil wells at Tarakan and Bunyu and those more to the south at Attaka, Semberak, Sanga-Sanga, Handjl, Badak, Samboja and Tanjung. In Sumatra there are oil wells at Jambi, Talang Akar, Limau, Raja and Muraraenim (in the south), with oil pipelines that transport crude oil to Plaju (the river port of Palembang); in the central part of the island there are the oil wells at Minas and Duri, connected by oil pipeline to the refinery of Dumai, and other oil wells at Lirik; in the north the fields at Perlak and Rantau are both exploited. Natural gas is extracted in Arun, Gajah, Musi, Ogan (Sumatra) and in Bintuni Bay (West Papua). Coal mining in Borneo (southern and eastern Kalimantan) and in southern Sumatra is important. There are rich deposits of tin on the islands of Riau, Singkep, Bangka and Belitung; one of the largest copper mines in the world is at Tembagapura (Papua). Bauxite is mined on the islands of Tembeling, Kelong, Dendang and Bintan; nickel in the Celebes; gold and silver at Lebong Tandai and Meulaboh (Sumatra) and at Citondang (Java).
Industry.
Heavy industry includes oil refineries in Borneo (Balikpapan), in Sumatra (Dumai, Sungaigerong, Palembang, Pangkalanbrandan), in Java (Balongan, Cepu, Cilacap) and in Papua (Kasim); there are also gas liquefaction plants (Arun, Bontang, Bintuni Bay), chemical factories (Palembang, Cilacap), steel and metal-working plants (Kualatanjung, Pematangsiantar) and many cement factories. The automotive industry is concentrated in the metro region of Jakarta and in Surabaya. There are shipyards in Jakarta, Surabaya, Semarang and Amboin, and aeronautical construction facilities in Bandung. Geothermal electricity production is significant. Cotton-weaving is highly important with centres in Cilacap and Semarang. Tyres are produced at Bogor and Palembang, paper at Blabak and cigarettes at Yogyakarta.

Tertiary sector
Foreign trade.
Indonesia mainly imports hydrocarbons and machinery.

Main exports
(M US$ - 2017) 
coal and its products 21 126, palm oil 18 513, natural gas 8 861, electric and electronic equipment 8 467, apparel and accessories 7 882, chemicals 7 830, crude oil and petroleum products 6 159, machinery 5 873, gold and precious stones 5 608, natural rubber 5 105, footwear 4 912, iron and steel 4 417, fish and crustaceans 4 202, timber 4 004

Finance and banking.
Bank Indonesia carries out the functions of a central bank. There is a Stock Exchange in Jakarta.

Tourism. It is mainly focused on the islands of Java and Bali.

A high-speed railway line between Jakarta and Bandung is under construction.