LAND AND RESOURCES

Territories on five islands make up 90% of Indonesia. The largest territory, Kalimantan, constitutes 28% of Indonesia's total area, and occupies the southern two-thirds of the island of Borneo. Also in terms of land area, second in size is the island of Sumatra, comprising 24% of total. Irian Jaya, which occupies the western half of New Guinea, forms 22% of the country; Sulawesi, 10%; and the islands of Java and Madura--inhabited by 64% of the population--only 7%.

Indonesia is potentially rich in mineral resources. The most important is crude petroleum--with associated deposits of natural gas--extracted primarily in eastern Sumatra and Kalimantan. Tin ores are found on a number of islands, as well as deposits of bauxite, nickel, coal, copper, uranium, gold, and diamonds. Large reserves of low-grade iron ore have been reported.

PEOPLE

Indonesia has one of the most ethnically diverse populations in the world. It has more than 300 distinct groups, the largest being Javanese, who constitute 40-50% of the total population. Sundanese in western Java make up about 15% of the total population, and the Madurese, on Madura, an estimated 5%. Smaller, but regionally important, ethnic peoples include the Balinese, Batak, Dayak, Papuans, Acehnese (Achinese), and Toradja. The largest nonindigenous group is the Chinese, constituting about 3% of the total population and living mainly in urban areas.

ECONOMY

Indonesia's traditional subsistence and trading economy was altered radically under the rule of the Dutch. Export crops were emphasized, and for many years their growth was mandatory. A state-dominated, centralized economic system was developed after independence, but it was replaced in 1969 by the "New Order" of President Suharto, based on a series of 5-year plans designed to build an agriculture-based economy capable of supporting simultaneous development of large-scale industrial projects and smaller consumer- and export-oriented processing industries.

GOVERNMENT

Executive power is vested in the president--who is elected by the People's Consultative Assembly for a 5-year term--and in the president's appointed cabinet. Legislative power rests with the Council of Representatives, but since 20% of this body's members are appointed from the armed forces, and the government party, Golkar, holds a substantial majority of the directly elected seats, the president in effect rules by decree. Governors, district heads, and mayors appointed by the central government administer the 27 provinces, 241 districts, and 55 municipalities.

HISTORY

Indonesia is thought to have been settled mainly by peoples from Malaya and Oceania, and the area was dominated from the 3rd to the 13th century by the Hindu and Buddhist Indianized kingdoms of the Srivijaya Empire, Mataram, Sailendra, Kediri, and the Majapahit Empire. Islamic influences, brought by Arabic and other traders in the 14th and 15th centuries, replaced the Indian religions in most areas except Bali. From 1602 until 1798 most of the islands were controlled by the Dutch East India Company, and from 1816 to 1949, Indonesia was regarded as a colony of the Netherlands. During World War II, Japan occupied the islands and encouraged many Indonesians in their quest for independence.

On August 17, 1945, Indonesian nationalists led by Sukarno and Muhammad Hatta proclaimed the nation independent. On December 27, 1949, after much dispute, the Netherlands transferred sovereignty. West Irian became part of Indonesia in 1963 and was renamed Irian Jaya in 1973. On July 17, 1976, the former Portuguese territory of East Timor was annexed.

Sukarno was Indonesia's first president. He ruled from 1945 to 1965, backed by the military and supported by the Asian Communist nations. During these years the economy declined, and Indonesia's continually closer ties with the Communist bloc stifled assistance from Western nations. At the end of September 1965 an attempted Communist coup led to an anti-Communist takeover of the government by the military under General Suharto. Sukarno continued temporarily as president, but de facto control of the nation was transferred to Suharto, who became acting president in March 1967.

Suharto looked to the West for economic aid while trying to create the internal stability that would encourage foreign investment. To unify his diverse nation he promoted Pancasila, a national ideology first enunciated by Sukarno in 1945. In 1966, Indonesia rejoined the United Nations, from which it had withdrawn in 1965; in 1967 it became a founding member of the Association of Southeast Asian Nations (ASEAN). Elections, held in 1968 for the first time in 13 years, gave Suharto the presidency.