Indonesia

The world's largest archipelago, Indonesia achieved independence from the Netherlands in 1949. Current issues include: alleviating widespread poverty, implementing IMF-mandated reforms of the banking sector, effecting a transition to a popularly-elected government after four decades of authoritarianism, addressing charges of cronyism and corruption, holding the military and police accountable for human rights violations, and resolving growing separatist pressures in Aceh and Irian Jaya.

On 30 August 1999 a provincial referendum for independence was overwhelmingly approved by the people of Timor Timur. Concurrence followed by Indonesia's national legislature, and the name East Timor was provisionally adopted. On 20 May 2002, East Timor was internationally recognized as an independent state.

• 27 provinces (propinsi-propinsi, singular - propinsi), 2 special regions* (daerah-daerah istimewa, singular - daerah istimewa), and 1 special capital city district** (daerah khusus ibukota);
• Aceh*, Bali, Banten, Bengkulu, Gorontalo, Jakarta Raya**, Jambi, Jawa Barat, Jawa Tengah, Jawa Timur, Kalimantan Barat, Kalimantan Selatan, Kalimantan Tengah, Kalimantan Timur, Kepulauan Bangka Belitung, Lampung, Maluku, Maluku Utara, Nusa Tenggara Barat, Nusa Tenggara Timur, Papua, Riau, Sulawesi Selatan, Sulawesi Tengah, Sulawesi Tenggara, Sulawesi Utara, Sumatera Barat, Sumatera Selatan, Sumatera Utara, Yogyakarta*;
• note - with the implementation of decentralization on 1 January 2001, the 357 districts (regencies) have become the key administrative units responsible for providing most government services

note: following the 30 August 1999 provincial referendum for independence which was overwhelmingly approved by the people of Timor Timur and the October 1999 concurrence of Indonesia's national legislature,

the name East Timor was adopted as a provisional name for the political entity formerly known as Propinsi Timor Timur; East Timor gained its formal independence on 20 May 2002

chief of state:

• President MEGAWATI Sukarnoputri (since 23 July 2001) and Vice President Hamzah HAZ (since 26 July 2001);
• note - the president is both the chief of state and head of government

head of government:

• President MEGAWATI Sukarnoputri (since 23 July 2001) and Vice President Hamzah HAZ (since 26 July 2001);
• note - the president is both the chief of state and head of government

cabinet:

Cabinet appointed by the president

elections:

• president and vice president elected separately by the People's Consultative Assembly or MPR for five-year terms;
• selection of president last held 23 July 2001);
• selection of vice president last held 26 July 2001;
• next election to be held NA 2004;
• in accordance with constitutional changes, the election of the president and vice president will be by direct vote of the citizenry

note: the People's Consultative Assembly (Majelis Permusyawaratan Rakyat or MPR) includes the House of Representatives (Dewan Perwakilan Rakyat or DPR) plus 195 indirectly selected members;

it meets every five years to elect the president and vice president and to approve broad outlines of national policy and also has yearly meetings to consider constitutional and legislative changes; constitutional amendments adopted in 2001 and 2002 provide for the MPR to be restructured in 2004 and to consist entirely of popularly-elected members who will be in the DPR and the new House of Regional Representatives (Dewan Perwakilan Daerah or DPD); the MPR will no longer formulate national policy

election results:

• MEGAWATI Sukarnoputri elected president, receiving 591 votes in favor (91 abstentions);
• Hamzah HAZ elected vice president, receiving 340 votes in favor (237 against)

Indonesia, a vast polyglot nation, faces severe economic development problems, stemming from secessionist movements and the low level of security in the regions, the lack of reliable legal recourse in contract disputes, corruption, weaknesses in the banking system, and strained relations with the IMF. Investor confidence will remain low and few new jobs will be created under these circumstances.

In November 2001, Indonesia agreed with the IMF on a series of economic reforms in 2002, thus enabling further IMF disbursements. Keys to future growth remain internal reform, the build-up of the confidence of international donors and investors, and a strong comeback in the global economy.