Economy

Until the late 1960's Indonesia had an underdeveloped economy, which was plagued by government mismanagement and political instability. By the early 1990's, largely because of sustained political stability, Indonesia had established a broad-based economy with diverse industries. Most of the development has been on the islands of Java, Bali, and Madura.

Indonesia has abundant natural resources, and their export, especially the export of petroleum and liquefied natural gas, has provided much of the capital for industrial growth.

Indonesia's basic currency unit is the rupiah.

provides a livelihood for about 50 per cent of the workforce. Roughly one-tenth of the land is farmed. Java alone accounts for nearly half of the cultivated acreage. Soils are of poor quality except for those of volcanic origin. Because of the tropical climate, crops can be grown throughout the year.

Subsistence farming is the leading kind of agriculture. It centers on the heavily populated islands of Java, Madura, and Bali. The land, often terraced far up the mountainsides, is intensively worked. Rice is the main food crop and the staple in the diet. Corn, cassava, sweet potatoes, peanuts, and soybeans are also major crops.

Plantation, or estate, agriculture, although still important, has declined since Indonesia became independent. Chief plantation crops include rubber, sugarcane, oil-palm kernels, coffee, tea, tobacco, coconuts, and spices. Indonesia has long been a leading world producer of many of these crops, especially rubber and coffee. Most of the plantations are on Sumatra, Kalimantan, and Java.

In little-developed areas, Indonesians engage in shifting agriculture: a patch of land is cleared, planted, and left unattended until harvest time. Crops are always poor. After a few years, the soil is exhausted and the farmer moves to a new plot. Chickens, cattle, pigs, and goats are the most numerous farm animals.

accounts for the largest share of Indonesia's gross domestic product and ranks second, behind mineral fuels, in export earnings. A variety of goods are produced, including such consumer goods as cigarettes, clothing, appliances, and processed foods; and such industrial products as refined petroleum, petrochemicals, steel, and fertilizers. Shipbuilding, automobile assembly, and the manufacture of aerospace products and wood products are also important. Most manufacturing plants are on Java.

Indonesia is one of the world's leading producers of petroleum and leads the world in the production of liquefied natural gas. Natural gas fields are found mainly on Sumatra and Kalimantan. Offshore fields are being developed. The country's largest oil fields are on Sumatra. Indonesia is also a major producer of tin. Other minerals produced in significant quantities include coal and ores of aluminum, copper, and nickel.

Indonesia has one of Asia's largest reserves of tropical hardwoods, and lumbering is important. Deforestation occurred at a rapid rate until the mid-1980's, when government restrictions and the planting of new forests slowed this rate. Much of the annual cut is processed into pulp and plywood.

The fishing sector is relatively small but important since fish provide the main source of protein in Indonesia. Modern fishing ships engaged in large-scale commercial fishing exist, but most of the catch is produced locally for local consumption.

Java has most of the country's railway trackage and many of its roads. The national airline is Garuda Indonesia Airways. There is much interisland shipping, and river transport is important on Sumatra and Kalimantan. Jakarta is the chief ocean port and the main center for air travel.