Indonesia operates as a presidential system with a strong executive and extensive regional autonomy. Decentralization created authority in local governments but governance remains fragmented, with overlapping agencies and bureaucratic hurdles that hinder policy coherence. The rule of law is uneven in practice, and corruption continues to distort procurement, licensing, and service delivery. Civil society and media operate with varying degrees of freedom across regions, while political pressure and security concerns influence human rights monitoring and dissent. Elections are competitive, yet money politics and patronage networks shape outcomes and erode trust in institutions. The armed forces retain influence in security matters, complicating civilian oversight. Policy continuity can be fragile across administrations, and reform fatigue or administrative reshuffles limit long term planning. Regional tensions, including resource and development grievances, reveal the challenge of balancing national unity with diverse local needs.
Colonial history
Colonized for over 300 years
Former colonizer
Netherlands
Government type
Presidential republic
Legal system
Civil law system with customary law (Adat) influences
Political stability
Varies; generally moderate but can be affected by regional tensions
The economy shows resilience through domestic demand, services, and natural resources, but remains sensitive to external cycles and commodity swings. Diversification has progressed slowly, with manufacturing and services expanding while high value added sectors struggle with scale, capital costs, and regulatory bottlenecks. The informal sector remains large, reducing tax revenue and social protection coverage. The investment climate is affected by land acquisition complexities, licensing delays, and inconsistent policy across regions. The state retains a prominent role in key sectors, which can attract capital but may crowd out private investment and reduce efficiency. Infrastructure gaps and logistics inefficiencies impede competitiveness. The digital economy is growing, offering inclusion and productivity gains, yet access disparities and skills gaps persist, and governance around data and cybersecurity lags private sector needs. Inequality remains a concern, with urban centers advancing faster than rural areas and labor markets facing underemployment and skills mismatches.
Indonesia is an archipelago with vast biodiversity and high exposure to natural hazards. Environmental pressures are pronounced, including deforestation, peatland degradation, and habitat loss driven by agricultural expansion and commodity demand. Enforcement of protections is uneven, and land use conflicts among communities, developers, and local authorities complicate sustainable outcomes. Coastal and marine ecosystems face pollution, overfishing, and climate risks such as sea level rise and extreme weather. Protected areas exist but governance and funding are inconsistent, limiting resilience. Resource extraction and mining contribute to development while raising concerns about environmental justice and ecological damage. Disaster risk and climate adaptation require integrated planning and robust governance, particularly in low income and remote areas. Regional disparities reflect variations in governance capacity and exposure to environmental stress.
Bordering countries
Malaysia, Papua New Guinea, East Timor
Climate type
Tropical
Continent
Asia
Environmental Issues
Deforestation, pollution, loss of biodiversity, climate change impact
Varied, including mountains, plains, and coastlines
The social fabric reflects broad ethnic, religious, and linguistic diversity under a national framework of unity. Tensions surface in some regions, and discrimination or marginalization of minority groups remains a challenge in practice. Access to quality education and health services varies widely by location, with urban areas generally advantaged over rural communities. Gender equality and women’s rights have advanced in some domains, but barriers persist in employment, political representation, and protection from violence. Household poverty remains concentrated in rural and peripheral areas, while urban growth creates housing shortages and informal settlements. Worker safety and migrant labor conditions raise concerns, and enforcement of labor rights is uneven. Civil society, independent media, and professional associations contribute to accountability, yet political constraints and regional dynamics can limit advocacy impact. Social protection programs exist but coverage and adequacy vary, leaving gaps for the most vulnerable.
Cultural heritage
Rich cultural diversity with numerous ethnic groups and traditions
Driving side
Left
Education system type
National education system with compulsory primary education
Ethnic composition
Javanese, Sundanese, Malay, Batak, and many others
Family structure
Extended family systems are common; emphasis on kinship
Healthcare model
Mixed system; government and private providers
Major religions
Islam, Christianity, Hinduism, Buddhism
Official languages
Indonesian (Bahasa Indonesia)
Infrastructure development is extensive but unevenly distributed, with major urban hubs connected by improving yet fragmented networks. Transportation systems face maintenance challenges, congestion, and reliability issues affecting mobility and logistics. Energy supply experiences reliability problems and relies on a mix of generation sources, with reform efforts aimed at diversification and cleaner energy, yet financing and regulatory barriers slow progress. Water, sanitation, and housing infrastructure show gaps in service provision, especially in rural and peri urban areas. Ports, airports, and logistics facilities are being upgraded, but bottlenecks in customs, documentation, and coordination persist. Digital connectivity is expanding through mobile networks and broadband investments, enabling a growing digital economy and public services, yet the digital divide remains real and governance around cybersecurity and data privacy requires strengthening. The policy environment for innovation and science relies on a mix of public funding and private capital, with ongoing reform needed to reduce barriers to research commercialization and talent retention.
Internet censorship level
Moderate; some restrictions on content
Tech innovation level
Growing, particularly in mobile technology and e-commerce
Transport system type
Varied; includes road, rail, air, and sea transport
Indonesia is home to 283,487,931 people in 2024, making it the fourth most populous country in the world and configuring a vast domestic market and labor force. The birth rate of 15.9 per 1,000 population and a crude death rate of 7.53 per 1,000 shape a population that remains relatively young but already shows signs of gradual aging pressures over time. Life expectancy at birth stands at 71.1 years (2023), reflecting mid-range health outcomes that benefit from public health programs but still face challenges in certain regions and communities. Under-5 mortality is 20.6 per 1,000 live births (2023), indicating ongoing child health vulnerabilities that intersect with nutrition, maternal health, and access to care. The unemployment rate sits at 3.31% (2023), suggesting relatively tight labor markets but underscoring the need to expand formal employment opportunities and productivity across provinces and sectors. Internet usage covers 69.2% of the population (2023), highlighting substantial digital connectivity but also a sizeable segment without access, which has implications for education, services, and inclusion. Health system capacity shows 0.69 physicians per 1,000 people (2022) and 1.36 hospital beds per 1,000 (2021), pointing to constrained access to care relative to population size and signaling a policy priority to scale upstream primary care and rural facilities. Public health spending is 2.69% of GDP (2022), with domestic health expenditure per capita, PPP around 202 international US dollars (2022), indicating moderate public financing for health compared with peers. Poverty stands at 9.0% in 2024, showing continued progress in reducing deprivation but implying that a meaningful segment remains vulnerable to shocks. The prevalence of undernourishment is 7.2% (2022), reinforcing links between nutrition and development outcomes. Taken together, Indonesia’s demography offers a large potential for a demographic dividend, but sustained improvements in health, nutrition, education, and employment are essential to translate population size into durable economic and social gains.
Economy
The Indonesian economy displays a blend of moderate income levels, export orientation, and ongoing adaptation to structural change. GDP per capita (current US$) is 4,925 in 2024, with GDP per capita (PPP, current international US$) at 16,448, suggesting that price-level differences mask a higher relative living standard when adjusted for purchasing power. Inflation runs at 3.67% in 2023, indicative of reasonable price stability that supports consumption and investment planning. The unemployment rate at 3.31% (2023) points to a relatively strong labor market balance, yet job quality, regional disparities, and informal employment remain important considerations for inclusive growth. The economy relies on external demand and domestic markets, evidenced by exports of goods and services equaling 22.2% of GDP in 2024 and imports comprising 20.4% of GDP, signaling a well-integrated trading position without overreliance on either side. The current account balance stands at -0.607% of GDP in 2024, a modest deficit that may reflect import intensity or cyclical factors rather than structural vulnerability. Foreign direct investment net inflows are 1.73% of GDP in 2024, showing continued investor interest but also room for improvement in investment climate and policy certainty to attract larger, longer-duration capital. High-technology exports amount to about 10.5 billion USD (2023), ranking 29th globally, indicating an emerging capacity in technology-intensive production that can complement traditional export sectors as part of a broader upgrading strategy. The presence of robust patent activity (1,397 resident applications in 2021) signals growing innovation dynamics within the economy, a positive sign for knowledge-based growth if supported by policy incentives and investment in research and development. Collectively, Indonesia’s macro profile reflects a sizeable and open economy with growth opportunities anchored in urbanization, digitalization, and an expanding manufacturing base, while the policy environment and infrastructure investments will shape the trajectory of convergence to higher value-added output.
Trade and Investment
Indonesia’s trade and investment dynamics reveal a moderately open economy with a focus on integration into global supply chains and ongoing capital formation. The exports of goods and services at 22.2% of GDP in 2024, coupled with imports at 20.4% of GDP, indicate a balanced external position that supports domestic production with access to international inputs. Foreign direct investment net inflows stand at 1.73% of GDP in 2024, demonstrating sustained attraction for capital, technology, and know-how, though at a level that will benefit from continued improvements in policy predictability and investment incentives. The logistics landscape, measured by the Logistics Performance Index (Quality of trade and transport-related infrastructure) at 2.9 in 2022, points to a solid, but improvable, capacity to move goods efficiently through ports, roads, and logistics networks—an essential precondition for expanding export-oriented manufacturing and reducing costs along global supply chains. Indonesia’s relatively strong digital and innovation indicators—e.g., 69.2% internet usage in 2023 and patent activity—suggest potential for a more dynamic services and tech-enabled economy, provided policy supports and investment climates converge to lower barriers to scale. In short, Indonesia sits at a transitional point where continued openness, improvements in logistics, and a more robust domestic innovation ecosystem could help lift export sophistication and attract higher-quality investment over time.
Governance and Institutions
Indonesia’s governance landscape exhibits a mix of strengths and vulnerabilities across institutions and policy domains. Political stability and absence of violence/terrorism register at -0.404 in 2023, indicating ongoing resilience challenges that require attention to regional dynamics and social cohesion, but not systemic instability. Regulatory quality stands at 0.301, suggesting a fairly credible policy-making environment capable of implementing rules that support business and investment, though enhancements in enforcement and consistency remain desirable. The rule of law score is -0.154, signaling weak performance in the legal framework’s predictability, contract clarity, and judicial efficiency, which can raise uncertainty for firms and households. Control of corruption is -0.487, reflecting persistent governance risks tied to transparency and accountability, potentially affecting investment decisions and public trust. Government effectiveness is 0.58, indicating a meaningful capacity to implement policy and deliver public services, even as execution may vary by sector and subnational level. Taken together, these indicators portray a governance system with a functional administrative core capable of reforms, yet facing structural challenges in the rule of law, anti-corruption, and legal certainty. The data suggest a positive trajectory in institutional effectiveness and regulatory quality, but sustained progress in transparency, judicial reform, and anticorruption measures remains essential to reassure investors and improve service delivery for citizens.
Infrastructure and Technology
Indonesia’s infrastructure and technology profile blends notable achievement with areas needing acceleration. High-technology exports reached about 10.5 billion USD in 2023, reflecting capabilities in electronics and related sectors that can anchor upgrading into more sophisticated manufacturing and services. The internet penetration rate, with 69.2% of the population online in 2023, demonstrates a large digital audience and opportunities for digital services, e-government, and e-commerce, while highlighting the remaining share of the population without access. Healthcare infrastructure signals constraint, with 1.36 hospital beds per 1,000 people (2021) and 0.69 physicians per 1,000 people (2022), underscoring the need to expand capacity to meet rising demand and regional disparities in access. The Logistics Performance Index score of 2.9 (2022) suggests that transport and trade-related infrastructure are functional but can improve in reliability, speed, and efficiency to reduce costs and boost competitiveness. Renewable energy accounts for 20.2% of total final energy consumption (2021), indicating a meaningful share of cleaner energy, yet room remains to scale renewables to reduce emissions and volatility from fossil fuels. The level of water stress at freshwater withdrawal of 29.7% (2021) points to resource management challenges in certain basins, with implications for industry, agriculture, and urban use. Total greenhouse gas emissions per capita, excluding LULUCF, are 4.27 t CO2e (2023), marking a moderate footprint that could rise with growth unless efficiency and cleaner energy options advance. The presence of resident patent activity (1,397 in 2021) signals a growing innovation ecosystem, which—if supported by targeted R&D investment, skilled labor, and intellectual property protection—could help translate infrastructure and technology into higher-value production and services. Overall, Indonesia’s infrastructure and technology landscape shows momentum in digitalization and technology exports, with critical needs in healthcare capacity, transport efficiency, and renewable energy deployment to sustain long-run competitiveness.
Environment and Sustainability
Indonesia faces a broad sustainability agenda shaped by energy, climate, water, and resource management challenges. Total greenhouse gas emissions per capita (excluding LULUCF) stand at 4.27 t CO2e in 2023, signaling a sizable carbon footprint associated with growth, energy use, and land-use dynamics. Renewable energy contributes 20.2% of total final energy consumption in 2021, indicating meaningful progress toward cleaner energy but leaving substantial room to expand decarbonization, diversify the energy mix, and strengthen resilience to climate-related risks. Water resource management shows a level of stress with freshwater withdrawal at 29.7% of available resources in 2021, suggesting that water security varies across regions and sectors, requiring continued efficiency gains, conservation measures, and integrated water planning. Indonesia’s environmental trajectory will hinge on policy choices around energy transition, forest and land-use management, and climate adaptation, especially given its exposure to coastal risks and extreme weather. While the data highlight tangible progress in energy diversification and governance capacity, achieving sustainable development will depend on accelerating investment in clean energy, improving water governance, and strengthening measurement and enforcement to curb emissions and protect natural resources for a densely populated, archipelagic nation.
Indonesia profile