Indonesia Profile

Spread across a chain of thousands of islands between Asia and Australia, Indonesia has the world's largest Muslim population and Southeast Asia's biggest economy.

Ethnically it is highly diverse, with more than 300 local languages. The people range from rural hunter-gatherers to a modern urban elite. 

Sophisticated kingdoms existed before the arrival of the Dutch, who consolidated their hold over two centuries, eventually uniting the archipelago in around 1900.
After Japan's wartime occupation ended, independence was proclaimed in 1945 by Sukarno, the independence movement's leader. 

Economic growth

Long-term leader General Suharto came to power in the wake of an abortive coup in 1965. He imposed authoritarian rule while allowing technocrats to run the economy with considerable success.
But his policy of allowing army involvement in all levels of government, down to village level, fostered corruption. His "transmigration" programmes - which moved large numbers of landless farmers from Java to other parts of the country - fanned ethnic conflict.
Suharto fell from power after riots in 1998 and escaped efforts to bring him to justice for decades of dictatorship.

Post-Suharto Indonesia has made the transition to democracy. Power has been devolved away from the central government and the first direct presidential elections were held in 2004.
Indonesia has undergone a resurgence since the 1997 Asian financial crisis, becoming one of the world's major emerging economies.

Investors are attracted by a large consumer base, rich natural resources and political stability, but often equally deterred by poor infrastructure, rampant corruption and growing calls for economic protectionism.

Secessionists

The country faces demands for independence in several provinces, where secessionists have been encouraged by East Timor's 1999 success in breaking away after a traumatic 25 years of occupation.
Militant Islamic groups have flexed their muscles over the past few years. Some have been accused of having links with al-Qaeda, including the group blamed for the 2002 Bali bombings, which killed 202 people.

 
Lying near the intersection of shifting tectonic plates, Indonesia is prone to earthquakes and volcanic eruptions. A powerful undersea quake in late 2004 sent massive waves crashing into coastal areas of Sumatra, and into coastal communities across south and east Asia. The disaster left more than 220,000 Indonesians dead or missing. Demand for palm oil and other agricultural products has led to high rates of deforestation.

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