Indonesia Economy

Economy

Indonesia, a vast polyglot nation, has restored financial stability and pursued sober fiscal policies since the Asian financial crisis, but many economic development problems remain, including high unemployment, a fragile banking sector, endemic corruption, inadequate infrastructure, a poor investment climate, and unequal resource distribution among regions. Indonesia became a net oil importer in 2004 due to declining production and lack of new exploration investment. As a result, Jakarta is not reaping the benefits of high world oil prices, and the cost of subsidizing domestic fuel prices has placed an increasing strain on the budget. Keys to future growth remain internal reform, building up the confidence of international and domestic investors, and strong global economic growth. In late December 2004, a major tsunami took nearly 127,000 lives, left more than 93,000 missing and nearly 441,000 displaced, and destroyed $4.5 to $5.0 billion worth of property.