Pestel Analysis of Indonesia

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INDONESIA

Introduction:
The Republic of Indonesia is the largest archipelago in the world comprising 17,504 large and small tropical islands fringed with white sandy beaches, many still uninhabited and a number even still unnamed. Straddling the equator, situated between the continents of Asia and Australia and between the Pacific and the Indian Oceans, it is as wide as the United States from San Francisco to New York, equalling the distance between London and Moscow.  Indonesia has a total population of more than 243 million (at the end of 2011) people from more than 200 ethnic groups. Bahasa is the official language in Indonesia which is a modified form of Malay but the most widely spoken language is Javanese. 88% of Indonesians population is Muslim. It has a very large trading environment, with several countries ranging in products from gas to textiles. Among the most well known islands are Sumatra, Java, Bali, Kalimantan (formerly Borneo), Sulawesi (formerly Celebes), the Maluku Islands (or better known as Moluccas, the original Spice Islands) and Papua.  PESTEL Analysis

Political Analysis: Political Background:
 In 1602 the Dutch established the Dutch East India Company (VOC) and became the dominant European power. Following bankruptcy, the VOC was formally dissolved in 1800, and the government of the Netherlands established the Dutch East Indies as a nationalized colony.  Japanese occupation during World War II ended Dutch rule, and encouraged the previously suppressed Indonesian independence movement. A later UN report stated that four million people died in Indonesia as a result of famine and forced labour during the Japanese occupation. Two days after the surrender of Japan in August 1945, Sukarno, an influential nationalist leader, declared independence and was appointed president. The Netherlands tried to re-establish their rule, and the resulting conflict ended in December 1949, when in the face of international pressure, the Dutch formally recognized Indonesian independence (with the exception of the Dutch territory of West New Guinea, which was incorporated into Indonesia following the 1962 New York Agreement, and the UN-mandated Act of Free Choice of 1969). Sukarno moved Indonesia from democracy towards authoritarianism, and maintained his power base by balancing the opposing forces of the military and the Communist Party of Indonesia (PKI). An attempted coup on 30 September 1965 was countered by the army, who led a violent anti-communist purge, during which the PKI was blamed for the coup and effectively destroyed. Around 500,000 people are estimated to have been killed. The head of the military, General Suharto, outmanoeuvred the politically weakened Sukarno, and was formally appointed president in March 1968. His New Order administration was supported by the US government, and encouraged foreign direct investment in Indonesia, which was a major factor in the subsequent three decades of substantial economic growth. However, the authoritarian "New Order" was widely accused of corruption and suppression of political opposition. Indonesia was the country hardest hit by the late 1990s Asian financial crisis. This led to popular protest against the New Order which led to Suharto's resignation in May 1998. In 1999, East Timor voted to secede from Indonesia, after a twenty-five-year military occupation that was marked by international condemnation of repression of the East Timorese. Since Suharto's resignation, a strengthening of democratic processes has included a regional autonomy program, and the first direct presidential election in 2004.  A political settlement to an armed separatist conflict in Aceh was achieved in 2005. Political and economic instability, social unrest, corruption, and terrorism slowed progress, however, in the last five years the economy has performed strongly. Although relations...
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