Indonesia: The Tiger Cub of Southeast Asia

Located on the southeast of Asia, Indonesia constitutes 4,000 islands stretching 3,400 miles east to west along the equator and separating mainland Southeast Asia from Australia. Indonesia is an archipelagic state that covers approximately 12.5% of the earth’s circumference. The Indonesian islands are often categorized into the Greater Sunda Islands of Sumatra, the Celebes Islands, the southern extent of Borneo, the Java Islands, the Moluccas, the western area of New Guinea (Papua), and the Lesser Sunda Islands of Bali. The Indonesian archipelago is an international convergence zone of the earth’s tectonic plates. Due to this, the country is highly vulnerable to seismic and volcanic activities. Besides active volcanoes, Indonesia also faces significant threats from natural calamities, including floods, earthquakes, droughts, and tsunamis. Large palm oil plantations and slash and burn agriculture practiced by small Indonesian farmers also contribute to severe human-made hazards.

These islands comprise over four hundred ethnic groups, 145 of which are acknowledged in the national census. Javanese (40%) and Sundanese (15.5%) are the two largest ethnic groups representing approximately half of the entire Indonesian population. With an estimated land area of 132,000 square kilometers, Java accommodates approximately 130 million people, making it Indonesia’s most populous island. Java island also harbors Indonesia’s capital, Jakarta that has an estimated population of 15 million. The official language is Bahasa.There may be 87.2% of people identifying themselves as Muslims in Indonesia. However, Indonesia is not a Muslim country and instead has a long history of religious tolerance. Before converting most of the sects to Islam in the fifteenth century, Hinduism and Buddhism were the dominant religion, and there
were still a few adherents

Sukarno resisted two significant forces to realize an independent Indonesia. Due to the Netherlands’ decline to renounce its control over Indonesia, Sukarno collaborated with the Japanese residents promoting the declaration of independence in 1945 through a constitution. However, the Dutch rejected this independence till 1949 when they influenced new constitution drafting process for the “Republic of the United States of Indonesia.” In 1950, the republic adopted a substitute constitution. The second force opposing Sukarno’s independence bid was the existing political differences and interests

Sukarno opted to advance the concept of guided democracy to minimize the impact of the evidenced logjam of political influences. He also declared martial law in Indonesia due to increased military coups between late 1956 and early 1957. He had nationalized many Dutch businesses.Sukarno established  a stable position after the activities between 1957 and 1958. In July 1959,
he decreed the reinstatement of the 1945 constitution legalizing his power. In March 1960, he dissolved the then parliament and declared 50% of the new parliament members. Additionally, he appointed a legislative assembly made up of personal appointees and a few parliamentary members. In September 1965, several military heads were abducted and assassinated, leaving Sukarno the only senior head. He held communists accountable for the killings. In October 1965, he began getting rid of the communists resulting in approximately 400,000 fatalities by December 1966.  In March 1967, Suharto ousted Sukarno from his presidency and a new era began.

Compared to Sukarno, Suharto knew that the economy would play a key role in strengthening his rule, so he focused on restoring the emerging economy and building sustainable growth through integration of liberal reform and national development planning.

Unfortunately, corruption spiked in Indonesia during Suharto’s reign, particularly in his later years as president. Suharto’s allies managed several stateowned businesses, for example, Pertamina, who the government bailed out in 1975 after defaulting on loans in 1975. Businesses received government licenses and financial aids repaid to Yayasan (foundations), owned by Suharto’s supporters,
especially the military. Due to such, Indonesia experienced drastic economic progression despite the high corruption rates and the extensive perception that foreign aides and Suharto’s allies were the only groups benefiting from the economy rather than the entire Indonesian population.

Suharto’s succession marked the lapse of the New Order and the start of the Reform Period. This era included five presidencies: three short-term reigns after Suharto’s regime and a ten-year rule by Susilo Bambang Yudhoyono and that of the current President Joko Widodo.

In anticipation of Japan’s conquest, the first national bill of rights was formulated as a brief Basic Law in April 1945 (Undang-undang dasar UUD 1945). This document’s introduction underscored the need for a united republic. It formed the doctrine of Pancasila as a common principle of all government actions: monotheism, fair and civilized humanity, Indonesia’s unity, a democracy based on wisdom and consideration by human representatives, and the success of social justice for all Indonesians.

After Suharto resigned in May 1998, the drafters of the constitution decided to review the 1945 Constitution used in two eras, between 1945 and 1949 and again between 1959 and 1998. This existing compromise between political parties wanting to avoid future deadlocks such as religious disagreements like that witnessed in the 1955 parliamentary assembly led to the unanimous resolution to amend the 1945 constitution instead of drafting a new constitution. Within three years, the MPR managed to draft and implement four constitution reforms. However, these changes adopted between 1999 and 2002 significantly altered 95% and 89% of sections and articles, respectively, and 85% of clauses realizing a constitution whose alterations significantly varied from the original
document. As a result, each chapter except that concerning religion had  A prelude preceded the constitution and comprised several aspects of the Pancasila
philosophy and concept of a united nation. These principles and the presidential government system were largely undisputed. Similarly, several definitions and clarifications previously mentioned in the constitutional annex are now included in the constitution’s text. Moreover, in response to Suharto’s repressive policies, the new constitution included a bill of rights and significant reservations
for law rule. However, fundamental human rights, such as freedom of religion and equality between men and women, remained alienated. Similarly, the constitution allowed the suspension of certain fundamental human rights to protect various religious sensitivities. Other significant reforms realized significant amends to the president’s legislative power and made the election of t In response to public censure of the presidency one that was dependent
on direct popularity by the voters. In response to public censor of MPR’s confusing role in the 2001 Wahid trial, the trial process was also reviewed.
While parliament’s legislative and budgetary powers were magnified, other intelligence agencies and law courts were founded. 

Indonesia has the 16th largest economy globally, with approximately US $ 1 trillion GDP. Additionally, Indonesia’s purchasing power ranks seventh globally

Indonesia has become the most sought-after market for new investments
from India and China among other central Asian nations.Its young employees have a promising increase in productivity and distribution in the next twenty years. Its prioritization of education and human capital development and industrial diversity in manufacturing and high value-added services such as IT, tourism, and design, provide Indonesian lawmakers some degree of selfassurance in the success of efforts aimed at escaping the middle-income trap.

After the inception of Suharto as Indonesia’s president the nation enjoyed
significant growth as he advanced better policies. The Indonesian administration together with various financial aids has propelled the nation’s industrial growth that today contributes modestly to the global economy.First, it benefited from an increase in world commodity prices by the middle of 2000, which encouraged
economic recovery based on its use. Second, it narrowly escaped the global financial shocks of the 2008- 09 recession. This recession benefitted Indonesia as it became a new attractive destination for foreign direct investment. Additionally, a combination of political stability and economic recovery due to the
rapid increase in the numbers of middle-class earners and the rapid rate of urban migration uncommon in a developing world is the third reason behind Indonesia’s economic growth.

Two distinct factors categorize the Indonesian financial system. For example, fiscal transfers to the country’s sub-national government levels are partitioned into two: the general funds allocation (Dana Alokasi Umum: DAU) and the specific grants allocation (Dana Alokasi Khusus: DAK). While the latter represents a grant provided to financial obligations at the district level, the
 ormer is a grant covering high recurrent financial costs of the government, such as those extended to  schools and medical services. The third component
includes the local taxes and charges (PAD) levied on various income sources

Despite social protection strategies in Indonesia having significant influence in the minimization of the risk of poverty altogether, economic inequality - as opposed to poverty – persists as a rampant and heightening challenge in Indonesia and the region. Indonesia continues to experience significant challenges in adopting several policy reforms covering human capital development. Despite the budgetary increase, Indonesia still evidences low-quality education, especially in the archipelago, extensive financial independence of its leading universities, decreased effectiveness in 3,000 out of its 3,200 private tertiary-level facilities, and incompatibility between acquired skill sets and the professional demands from the workforce skill-gap.

Indonesia has, over the past few years, recorded a stable economic growth of 5%. In 2019, it recorded a drop from 5.2% to 5.0%. Indonesia’s key economic stimulators include the private domestic consumption driven by the increasing middle-income earners totaling approximately 70 million (55% GDP). Some of the significant challenges witnessed include trade tensions between Indonesia and its largest trading partners (China and the United States) and the depreciation of its Rupiah currency against the dollar. Due to the COVID-19 pandemic, the IMF anticipates a 0.5% decline in the GDP growth from 14th April
2020 and an increase to 8.2% after a global recovery from the pandemic.

A majority of Indonesia’s labor market are low-class citizens who primarily work in traditional, marginalized, and informal jobs. The industrial sector accounts for 39.7% of the GDP and employs 21.9% of the active labor population. The primary activities within this sector include manufacturing cement, rubber tires, textiles, chemical fertilizers, clothing, electronic products, and shoes primarily for the American market. On the other hand, the service sector employs 47% of Indonesia’s active population and accounts for 43.4% of the GDP. This sector includes transportation, financial institutions, and communications. While Islamic banking has experienced a rapid rise in the past few years, Indonesia’s banking sector is generally well developed. Tourism is another key revenue source. The government anticipates its global recognition as the leading Asian tourism destination by 2045, with an estimated annual tourist population of over 73 million.

The unemployment rate has remained constant at a relatively high percentage of
5.3 as of 2019 despite the reduction of inflation rate . Several Indonesian citizens continue to work in low job conditions and salaries. However, ıit should be noted that Indonesia has notably reduced its poverty levels by more than 50% since 1999.  Deficits in its current account balance starting in the last quarter of 2011 is another problem in Indonesian economy. The large gap in Indonesia’s primary income averaging to USD 20 billion annually since 2010 contributes to the country’s widening current account deficit.  Like many third-world countries, Indonesia is a net borrowing nation represented by a high foreign asset acquisition and low foreign liability incurrence. Indonesia’s network delivery of services is also always futile. The fall in international oil and gas prices, which is naturally followed by falling commodity prices, has reduced Indonesia’s exports. Further, Infrastructure investment is a pertinent challenge for the Indonesian government. More often than not, insufficient infrastructure regardless of the industry contributes to high production costs.

Indonesia is still vulnerable to domestic and foreign pressures. The nation has undergone significant structural changes that lead to legal frameworks that continue to function through democratic elections, sustainable regional
devolution, and the expansion of a marketfocused economic system in the recent past. Despite this success, social anxiety and regional conflicts continue to plague several sections of Indonesia. Although democracy and the devolution of power have become entrenched in Indonesia, maintaining peace in the community persists as a significant problem at the local level. Additionally, religious radicalism has increased in the recent past. Minor religions, including
Ahmadiyya and Shia communities, have been the target of a relentless onslaught of attacks, while the churches of Christendom have continued to be intimidated by Muslim sects. The fine line linking religious vigilance and
terrorist troops is also anticipated to challenge Indonesia’s anti-terrorism approach. While terrorist attacks have significantly declined in the recent past, the Indonesian government continues to determine new approaches to combat terrorism to anticipate future threats better. Maritime officials and other
navy authorities are increasingly concerned about maritime conflicts with neighboring countries. They also struggle to tackle the vast problem of natural resource theft. Because of inadequate monitoring and supervision, border areas are at risk of international misdemeanor, such as arms, human, and drug trafficking. Also, piracy attacks have heightened incidents in the recent past. As future relations between Indonesia and the superpowers are still uncertain, Indonesia will face much political unrest in the East Asia region. First, the emergence of China has changed the structure of power in the East Asia zone. Second, regardless of its significant regional status, the power gap connecting the United States and other regional authoritative nations has narrowed over the years. Third, territorial strife persists in the East Asia
region consequently compromising maritime security and stability in the zone. Fourth, the significant authorities potentially advocate for strategic competition for sovereignty over the development of any collaborative association. The continuation of China-US relations is uncertain as their strategic contention heightens despite economic associations between the two countries. Despite Japan’s massive investment in China, territorial wars and historical
relics will persist to undermine their future political associations. In addition to the longrunning conflict on the borders of Aksai Chin and Arunachal Pradesh, China and India will compete over the control of the Indian Ocean and South China Sea maritime regions. These two nations consider these two oceans as natural resources abundant hotspots and vital commercial zones. As competition levels between the superpowers intensify, Indonesia recognizes that East Asia will emerge as a hotspot for the pursuit of greatness, which will lead to the division of regional alignment

The primary areas of concern for Indonesia are based on four building blocks – political aspirations, geostrategic position, strategic vulnerability, and constitutional authority. First, Indonesia is the largest archipelagic nation globally and is strategically positioned at the crossroads between two oceans - the Indian and the Pacific - and two continents - Asia and Australia. Indonesians’ appreciation of their identity and natural resources is heightened by the country’s Archipelagic Outlook (Wawasan Nusantara) that for the longest period has guided the nation’s distinctiveness. The UN Convention on the Law of the Sea (UNCLOS) played a vital role in the Indonesian government in maintaining national supremacy and local integrity. Second, the land and sea basins vastness in Indonesia are susceptible to numerous threats from natural disasters and military invasions.Thirdly, Indonesia has a lasting history of political independence regarding foreign policy direction, known as the ‘free and active’ approach. Coming out of colonial oppression and World War II, Indonesians often point to a past of foreign enslavement as the primary factor behind the nation’s numerous challenges. Finally, the Indonesian law directs that each
successive leadership regime contributes to social and world peace order. Therefore, it conserves an active presence in critical international institutions,
from the ASEAN and the Islamic Conference to the General Assembly of the United Nations. Due to its affluent past concern and active involvement in equity and consensus development, Indonesia continues to take an active and significant role in mediations about the effective handling of global and regional challenges.

Indonesia has implemented two policy measures to maintain its independence and power in the international community. First, it employs ‘soft balancing’ processes to advance international cooperation and improve global order. While ASEAN persists as the backbone of Indonesia’s foreign policy in East Asia President Jakarta also strives to advance state interests via a two-pronged strategic partnership with international and regional bodies - for instance, the Non-Alignment Movement (NAM), the United Nations (UN), and the Group Twenty (G-20). Second, because of its previous knowledge and encounters with arms embargoes, the nation undertook an operation of ‘internal balance’ through innovation of its military technologies and rebuilding traditional defense sectors. Today these strategies are fully present in the Indonesian foreign policy and defense policy.