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September 2007



Indonesia, located in Southeastern Asia, between the Indian Ocean and the Northern Pacific Ocean, has a population of 245.5 million people making it the world's fourth-most populous nation. The island of Java is one of the most densely populated areas in the world, with more than 124 million people living in an area the size of New York State. Indonesia has numerous related but distinct cultural and linguistic groups, many of which are ethnically Malay. Since independence, Bahasa Indonesia (the national language, a form of Malay) has spread throughout the country and has become the language of most written communication, educational documents, and government and business transactions. English is the most widely spoken foreign language.

Indonesia is a republic based on the 1945 constitution providing for a limited separation of executive, legislative, and judicial power. The Habibie government has fashioned political reform legislation that -- without changing the 1945 Indonesian Constitution -- has formally set up new rules for the electoral system, the House of Representatives (DPR), the People's Consultative Assembly (MPR), and political parties. The president, elected for a 5-year term, is still the dominant government and political figure.

Indonesia has a market-based economy that is increasingly dominated by the private sector. However, the government still plays a significant role in the economy, through state-owned enterprises and administered prices on some basic goods, including fuel and electricity.

U.S. State Department Background Notes, 8/2007

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