- published: 20 Mar 2016
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Indonesia is the largest economy in Southeast Asia and is one of the emerging market economies of the world. The country is also a member of G-20 major economies. It has a market economy in which the government plays a significant role by owning more than 164 enterprises and administers prices on several basic goods, including fuel, rice, and electricity. In the aftermath of the financial and economic crisis that began in mid-1997, the government took custody of a significant portion of private sector assets through acquisition of nonperforming bank loans and corporate assets through the debt restructuring process. Since 2004, the national economy has recovered and undergone another period of rapid economic growth.
Indonesia regained its investment grade rating from Fitch Rating in late 2011, and from Moody's Rating in early 2012, after losing its investment grade rating in December 1997 at the onset of the Asian financial crisis which Indonesia spent more than Rp450 trillion ($50 billion) to bail out lenders from banks. Fitch raised Indonesia's long-term and local currency debt rating to BBB- from BB+ with both ratings is stable. Fitch also predicted that economy will grow at least 6.0% on average per year through 2013, despite a less conducive global economic climate. Moody’s raised Indonesia's foreign and local currency bond ratings to Baa3 from Ba1 with a stable outlook.
Indonesia (i/ˌɪndəˈniːʒə/ IN-də-NEE-zhə or /ˌɪndoʊˈniːziə/ IN-doh-NEE-zee-ə), officially the Republic of Indonesia (Indonesian: Republik Indonesia Indonesian pronunciation: [rɛpʊblɪk ɪndɔnɛsɪa]), is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 17,508 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an elected legislature and president. The nation's capital city is Jakarta. The country shares land borders with Papua New Guinea, East Timor, and Malaysia. Other neighboring countries include Singapore, Philippines, Australia, and the Indian territory of the Andaman and Nicobar Islands. Indonesia is a founding member of ASEAN and a member of the G-20 major economies. The Indonesian economy is the world's 17th largest economy by nominal GDP.
The Indonesian archipelago has been an important trade region since at least the 7th century, when Srivijaya and then later Majapahit traded with China and India. Local rulers gradually absorbed foreign cultural, religious and political models from the early centuries CE, and Hindu and Buddhist kingdoms flourished. Indonesian history has been influenced by foreign powers drawn to its natural resources. Muslim traders brought Islam, and European powers brought Christianity and fought one another to monopolize trade in the Spice Islands of Maluku during the Age of Discovery. Following three and a half centuries of Dutch colonialism, Indonesia secured its independence after World War II. Indonesia's history has since been turbulent, with challenges posed by natural disasters, corruption, separatism, a democratization process, and periods of rapid economic change.