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Indonesia from A to Z

Working conditions and unions
Poverty alleviation
Digital media and internet
Piracy and shipping

Working conditions and unions

On paper, the working conditions in Indonesia are nothing short of exemplary. The country has anchored the core labor standards of the International Labor Organization (ILO) in its national legislation; there are precise regulations for working life. The standard working time is 40 hours a week. The first hour of overtime is paid one and a half times the hourly wage, each additional hour double the hourly wage and at least one day off per week.

The reality looks different, however, even if the situation of the working population is improving in some respects according to the ILO's most recent “Decent Work Report”. Measured against the population as a whole in this age group, the proportion of 10 to 17 year olds who are already working has decreased from 7.1 percent in 1996 to 4.3 percent in 2010; Years, the per capita income has risen steadily. In addition, there are regulations for a minimum wage, which varies depending on the region and is calculated on the basis of the needs of a single man without children. Unlike in Germany, however, where the minimum wage is well below the average income, in Indonesia it is 81.8 percent of the average wage and is therefore more the rule than the exception. However, no actual wage increase can be derived from the rise in the minimum wage, since the average weekly working hours have risen from 38.2 (1996) to 41.2 (2010) at the same time. The proportion of people who work more than 48 hours a week has also increased: in 1996 it was 24.9 percent, in 2010 it was 32.4 percent.

Universal social insurance has been required by law since 2004. It includes health, accident, pension and life insurance, but not unemployment insurance. Anyone who works in Indonesia for more than six months must pay contributions. Those who are unable to do so receive grants and free access to health services that are also available to informal workers - an estimated 59 percent of the working population. Government spending on the social security system is still extremely low, but has more than doubled: from 0.4 percent of the 1996 budget to 0.9 percent in 2009. State-funded medical services account for the largest share: 53, 6 percent in 1996 and 64.8 percent in 2009.

Not all workers have benefited, let alone those in the informal sector. This is partly due to the government's efforts to attract foreign investors: contract outsourcing and temporary work are allowed for up to three years; Often workers are laid off after three years at the latest, since otherwise they would have to be permanently employed, which would be significantly more expensive for the companies concerned.

The situation is particularly precarious for workers in the export zones, where almost all employees work on the basis of repeated three-month contracts. According to a report by the International Textile, Garment and Leather Workers' Association (ITGLWF) published in April 2012, workers there are under extreme pressure to meet production targets and are often forced to work over 100 hours overtime per month. In the same month, reports that the sportswear supplied by Adidas for the British Olympic team were made in Indonesian sweatshops caused a scandal. It doesn't look much better at competitor Nike. According to the “Global Alliance Nike Report”, for which the conditions in nine factories producing for Nike with a total of 53,810 workers were examined, around 96 percent of the workers received more than the minimum wage, but still did not earn enough to cover their rising cost of living cover. Although the regulations allow overtime to be voluntary, many reported that they either thought it was mandatory or that they were being pressured. 56.8 percent said they had observed various forms of sexual harassment, 30.2 percent said they had experienced it personally.

Workers in Indonesia have a hard time fighting for their rights and organizing effectively. After the end of the Suharto dictatorship, laws were passed to improve the situation of the unions, but they did the opposite. It only takes ten members to form a union. As a result, many small unions emerged with too little power to make any difference, as only those with a membership of over 50 percent of the workforce are allowed to bargain collectively. In 2009, only around 12 percent of all workers and employees were union members. In addition, collective bargaining must be concluded within 30 days, otherwise they will be forwarded to the responsible ministry for arbitration. The right to strike is also strictly regulated. Strikes are only permitted when both parties to the collective bargaining agreement declare the negotiations to have failed. In other words: They are legal with the consent of the employers - and if they and the authorities are informed in advance of the reasons, the duration and the locations of the pickets. In companies that act “in the public interest” or provide “essential services”, they are prohibited at all.

Poverty alleviation

Poverty remains a serious problem for the emerging Indonesia. It is true that the proportion of the population living below the poverty line has fallen in recent years: in 2006 it was 17.8 percent, most recently it was 13.3 percent (2010). Nevertheless, poverty and its side effects persist: five years ago, almost 20 percent of all children under five were underweight. The child mortality rate is around 27 deaths per 1,000 births (in Germany it is 3.5). The maternal mortality rate is particularly high: in 2010 it exceeded that in Germany by 30 times, which is due, among other things, to high-risk abortions. Basic health care is by no means sufficient: This is also borne out by the fact that Indonesia ranks 19th on the list of countries with the most HIV / AIDS sufferers.

Indonesia is repeatedly hit by major natural disasters, from which the poorer population suffer most. Earthquakes and seaquakes, floods or mudslides can deprive her of her entire livelihood in one fell swoop. Their situation is made worse by corruption (see also p. 40f.): Construction contracts are often not carried out properly, which makes the housing of the poor all the more prone to collapse. Corruption also repeatedly undermines government aid programs to fight poverty. One example is the “Askesin” program, which aims to ensure emergency medical care for the poor. Hospitals regularly complain that the money made available for them does not reach them or only partially reaches them.

Even under Dutch colonial rule, one of the causes of poverty was the population surplus in the densely populated areas of Indonesia, especially on Java. At the beginning of the 20th century, the long-term project "Transmigrasi" (the people to be resettled) began. Originally set in motion to reduce overpopulation through resettlement on the outer islands, the transmigration program has also served the development of the provinces since the 1970s. Critics complain, however, that the resettlements only shift the poverty problem to the outer islands, but are not able to solve it. On the one hand, the migrants lack agricultural training in order to gain a foothold locally, on the other hand, the intended forms of production are often not appropriate to the location.

One of the most important measures to combat poverty is the PNPM Rural program, which has been concentrating on the less developed rural areas since 1998 and has already achieved great success across the country with an annual budget of 1.3 billion dollars. It aims to involve the village population more closely and to strengthen the infrastructure. So far, over 71,000 kilometers of new roads have been built or repaired, 20,000 connections have been made to a clean water supply and 15,000 schools have been built. Since 1999 there has also been an urban equivalent called PNPM Urban.

New projects are also trying to combine poverty reduction measures with ecological compatibility. The non-governmental organization “Habitat for Humanity Indonesia” started an aid program in 2011 that focuses on poverty reduction through ecotourism. 420 environmentally friendly dwellings and guest accommodations are to be built within this framework and thus integrated more sustainably into traditional village life in Soran on Java, where centuries-old craft and artistic traditions are still alive.
The most important starting point for combating poverty, however, is the improvement of the often ailing school system. The classes at state schools are often overcrowded, teachers can barely support their families from their salaries, and many are dependent on second or third jobs.


In an international comparison, Indonesia's education system fares poorly. In three categories of the Pisa study of 2009 (reading skills, mathematical skills and basic science education) Indonesian students landed in the last ten places, even though the Indonesian leadership recognized at the end of the colonial era that the country's backwardness could only be achieved through large-scale educational initiatives to break through. Six decades later (with slightly fluctuating information) almost all Indonesians between the ages of 15 and 24 can read and write: thanks to President Megawati Sukarnoputri (2001-2004), who wanted to ensure democratic opinion-making in the country in the long term and to change the constitution asserted. "I want to encourage our people, I want to educate our people so that they can find the courage to understand and fight for their rights," she said when the Education Act of 2003 was passed, according to which at least 20 percent of the national and of the regional budgets must be used for education policy. However, the implementation only succeeded from 2009 under President Susilo Bambang Yudhoyono; Most recently, the country spent the equivalent of 21.5 billion euros (2011) on education. However, a large part of this money went into the wrong channels. According to estimates by Indonesian Corruption Watch (ICW), an anti-corruption initiative, between 40 and 50 percent of the education budget seeps away before the funds reach schools.

As in many European countries, there is a six-level system of formal education in Indonesia, which consists of kindergarten, preschool, elementary school, middle school, high school and university. Teaching is generally in Bahasa Indonesia, which is to be established as a lingua franca and is spoken by almost all Indonesians. (Around 250 different languages ​​and dialects are spoken in Indonesia.) Since school attendance in Indonesia is relatively expensive with officially nine years of compulsory schooling - books, uniforms, lunch and transport have to be paid for privately - usually only children from better-off families complete a complete one Training. This has worsened as a result of the financial crisis of 2008. For example, the rate of pupils in secondary schools fell from 94 to 90 percent between 2007 and 2009.

Only 13 percent of the students make their way to one of the 80 state - more prestigious - universities or to the approximately 1,700 private and barely renowned universities or colleges. Only a marginal proportion, mostly from high school graduates from very wealthy families, are drawn to foreign universities, especially in Singapore, the USA or Australia.

Instead of state schools, it is also possible to attend Muslim schools. According to the German Society for International Cooperation (GIZ), this is used by 10 to 15 percent of the school-age population (40 percent of them girls). The standard of the training is considered to be lower, but attending it is considerably cheaper; In contrast to state schools, however, more emphasis is placed on religious content - including Arabic and Koran lessons).

The Koran schools in Indonesia sometimes have very different origins and traditions and interpret the Koran as anything but uniform. The spectrum ranges from a purely religious lesson plan to the adoption of over two thirds of the national curriculum. Significantly, the state schools are subordinate to the Ministry of Education, but the Muslim schools to the Ministry of Religions. Of the Islamic boarding schools (“pesantren”), the number of which is estimated at up to 20,000, 40 percent limit themselves to exclusively religious content, 60 percent offer a mixture of Islamic and state curriculum; many have recently sought to combine Islamic values ​​with modern content such as computer courses, English classes, and business management. In the approximately 40,000 day schools (“Madaris”) - of which only around 8 percent or a good 3,000 are registered - 70 percent secular and 30 percent religious content is offered. The financing of the Koran schools is not regulated by the state. As a result, the source of their financial resources has in some cases been completely opaque. A few schools are suspected of being financed by radical groups from home and abroad, especially from the Middle East.

In addition, the Indonesian government promotes numerous educational alternatives that count as informal training and focus on manual activities. In this way, early school leavers, the number of whom is considerable, should be better integrated into the labor market: in the past two decades, for example, only an average of half of school-age children reached seventh grade. There have also been further reforms to the education system since the Education Act of 2003. Lessons have recently ceased to follow uniform curricula for the entire country; rather, compulsory topics specified nationwide are combined with content tailored to the respective province. In addition, emphasis is placed on practice-oriented references.

Nevertheless, the educational system, whose poor condition is the biggest obstacle to rapid growth according to the World Bank, is likely to improve only slowly - not least due to the ubiquitous corruption. “It is very difficult to find a 'clean' school in Indonesia. Finding a corrupt one is very easy, ”Ade Wirawan of Indonesian Corruption Watch told Voice of America in July 2011. For example, according to ICW research, parents of school-age children are forced to pay bribes for handing over certificates. Bribery of teachers during exams is also widespread, while schools on the one hand use bogus bills to steal government funds and on the other hand have to bribe the educational authorities, for example to obtain permission to renovate buildings.

Basically there are serious differences in the equipment of schools (the more remote the school is, the worse it is), the high number of school dropouts despite compulsory schooling and a lack of coordination with the industry, which demands technically oriented and English-language training, become so fast not let it improve. In the most recent university ranking (2011/12) by The Higher Education Supplement, not a single Indonesian university made it into the top 400, but the universities of regional competitors such as Tokyo (30), Hong Kong (34), Singapore (40) and Beijing (49 ) among the top 50.

Digital media and internet

One would not necessarily expect rapid technological progress and booming internet business in a country with a persistent educational misery. But Indonesia's IT industry is in the midst of a modernization surge. Digital media have recorded enormous growth rates for years; The geographical fragmentation of the country into more than 17,500 islands makes the use of digital media a key economic and social factor. While around half a million people were still using the Internet in 1998, more than 55 of around 248 million Indonesians are now connected to the World Wide Web. According to a study by the Boston Consulting Group, this number could almost double again by 2015.

So far, social networks in particular have benefited from this development. In the past two years, the number of Indonesian Facebook users has increased fifty-fold. In 2008, the platform's growth rate was a staggering 645 percent, and in the first six months of 2012 alone, two million Indonesians created a new profile.Blogging services are also reporting enormous growth. Behind the USA, Japan, Brazil and Great Britain, Indonesia is already the fifth largest “Twitter nation”. Experts assume that every third Internet user blogs regularly. At the same time, established domestic Internet services such as Bejubel, a platform that connects buyers and sellers, and Tokopedia, the Indonesian answer to Ebay, are flourishing.

The enormous potential of digital media in Southeast Asia has not gone unnoticed by Western entrepreneurs. In addition to local start-ups, international technology groups are now vying for the favor of Indonesian customers. In 2010, the American Internet giant Yahoo bought the successful Koprol company, which offers a mixture of social network and location service. It is to be expected that further acquisitions will follow in the future. Large corporations such as Apple and Nokia are continuing to expand their presence in Indonesia. The BBC is already talking about a “Silicon Valley-like boom in Jakarta's suburbs,” and Chinese experts recommend investing in online advertising and e-commerce.

The country's technological modernization continues to encounter serious structural problems: of the 23 percent of the population with Internet access, only about 4 percent are in rural areas. Indonesia's islands are poorly connected and new land and sea lines are expensive to build. Broadband lines only reach a little more than 2 percent of Internet users, and there are still places that are completely without Internet, sometimes even telephone, connection. Around 65 percent of Indonesian Internet activities are based on Internet cafés - an indicator of the inadequate technological infrastructure and great potential for demand for new Internet connections. A study by the Business Software Alliance found that in 2010 just 11 percent of all Indonesian households had a permanently connected PC and the current "Global Competitiveness Report" of the World Economic Forum particularly criticized the poor network expansion and the associated loss of effectiveness and revenue for the Indonesian economy .

The government has registered this deficiency and has already launched a $ 9.2 billion structural program to expand broadband networks. In the long term, fast Internet connections should not remain the privilege of the upper middle and upper classes, but rather form the basis of a sustainable economic upswing. In addition, it is important to catch up with the emerging neighboring states as quickly as possible. The Philippines (33 percent), Vietnam (34 percent) and Malaysia (64 percent) have so far been able to guarantee far better Internet connections for their populations.

The fact that Indonesia is in the midst of a breathtaking technological catch-up race despite comparatively adverse conditions is due not least to the country's booming telecommunications sector. 50 percent of Internet users are already networked via their mobile phones and bypass the problem of missing landline lines. No wonder, then, that the state-owned telephone company Telkomsel recently announced that more than 40 percent of the expenditures would be used in the future on the development of mobile broadband technologies. Smartphones and tablets are replacing desktop computers in Indonesia, and the potential of wireless communication seems to have no limits in a country where more than half of the population is under 29 years old. As early as 2010, the major international bank HSBC predicted: "Of the three markets of China, India and Indonesia, Indonesia has the best prerequisites for sustainable growth in the telecommunications sector."

Western entrepreneurs should like that: the market leaders in the field of mobile communications have not come from Indonesia, but from abroad. The Canadian technology giant Research in Motion (RIM) has a market share of over 40 percent with its workhorse BlackBerry. The demand for devices with the Android operating system developed by Google continues to grow. Although there were more mobile phones than residents in Indonesia by the beginning of 2012, the demand for technological modernization is far from being satisfied. In the fourth quarter of 2011, the import of smartphones rose again by 28 percent.


Although women are supposed to have equal rights according to Article 27 of the 1945 constitution, they continue to be disadvantaged not only in practice, but - in direct violation of the constitution - also legally. In 1973 the Indonesian state defined in the “Panca Tugas Wanita”, the “five duties of women”, their roles as “companions of their husbands”, as “guarantors for the continued existence of the nation”, as “mothers and educators of the children” “Good housewives” and only recently as “citizens of the state”. In principle, this is still the case today. The 1974 Marriage Act assigns men the role of head and breadwinner of the family. In addition, in autonomous regions like Aceh, Sharia law is the legal basis and thus laws that are incompatible with the constitutional principle of equal rights.

In the “Gender Gap Index” of 2011, Indonesia was ranked 90th out of a total of 135 places (for comparison: Germany was 11th, Saudi Arabia 131). However, the results vary greatly depending on the indicator. When it comes to women's access to bank loans or ownership of land or other wealth, Indonesia already has the highest possible score. In the area of ​​education, too, the UN Millennium Development Goals targeted for 2015, for example gender parity at schools and universities, have already been almost or completely achieved at all educational levels. Since women are becoming more and more important as a labor pool due to the rapid industrialization of the country and the growing economic output, this is of central importance for the further development of the Indonesian economy. But of all things, the gap between men and women in the area of ​​“economic participation” has worsened since 2006, according to the “Gender Gap Report”, which indicates that there is still a lot of untapped potential and a lot of catching up to do.

Although most families depend on two incomes, only 53 percent of all Indonesian women have a job (the employment rate for men is 87 percent). The fact that the unemployment rate of 8 percent is almost identical to that of men can mainly be explained by the much higher number of women who have informal work. In 2010, 32.4 percent of all women worked as unpaid domestic help. With around 75 percent of all documented emigrants, far more women are looking for a job abroad. In contrast, there were three times as many male employers as female employers in 2009, and the proportion of male self-employed outweighs that of women at 53.6 percent to 34.5 percent. (For comparison: the ratio of male to female self-employed is similar in Germany, but it is much less at 7.2 percent of men and 5 percent of women.)

With a share of only 22 percent in the group of “parliamentarians, managers and senior officials”, women are clearly underrepresented in management positions. Also, their estimated average salary is only 42 percent of that of men; For the same or similar work, they receive an average of around a third less wages. This is also due to the fact that there are often special benefits or tax breaks for the “head of the family”. In theory, there are laws that protect women from discrimination in the workplace. However, women are only accepted in working life as long as they are not kept from their “motherly and housewife duties”. For example, women need a special permit for night work, which they can only obtain with the permission of their family or their husbands.

Women are also severely underrepresented in politics. Although Megawati Sukarnoputri was the head of the state between 2001 and 2004 and the first Chinese minister, Mari Elka Pangestu, played an influential role as Minister of Commerce (2004–2011) and since then as Minister of Tourism and the Creative Economy, are currently only 18 percent of MPs are women; their share in the cabinet is 17 percent. A new law since 2008 requires the parties to adhere to a 30 percent quota of women when drawing up lists of candidates; However, due to the lack of sanctions, the parties ignore this provision.

In the areas of family, household and child-rearing, women traditionally have more to say. According to a 2007 study, 94 percent of all women make decisions about household purchases. Nonetheless, pre-modern attitudes seem persistent in part of the population. A 2003 survey found that 18 percent of women surveyed felt it was justified for a man to hit his wife after she went out without telling him.


The blatant deficiencies in Indonesia's infrastructure pose major problems for the up-and-coming business location Indonesia and endanger further growth. The special geographical conditions alone make mobility difficult, as there is often no daily ferry traffic between the islands. Across the country, frequent traffic jams and power outages are causing production costs to rise and multiplying risk factors for foreign investors.

The government has recognized this and, in addition to expanding the infrastructure, also lists that of the energy sector as a priority for the national development plan (2011–2015). All regions of Indonesia are to be connected to the electricity grid by 2029, for which investments amounting to 227 billion dollars are planned. The rate of electrification was 71.2 percent at the end of 2011, and many households in the less developed east of the country still have no access to electricity.

In addition, the annual increase in energy demand by an average of 9 percent causes supply deficits that also affect industry. Two parallel “Fast Track” programs run by the national energy supply company PT PLN are each to provide an additional 10,000 megawatts by 2014: While the first program, which runs from 2007 to 2013, is aimed at expanding energy generation from coal power, the second is , Started in 2010 under the sign of the use of renewable energies. In doing so, Indonesia would like to diversify its energy supply, 42.2 percent (end of 2010) of the capacity generated by PT PLN from coal power. The main focus should be on geothermal energies. Especially because of its numerous volcanoes, a lot of geothermal energy can be extracted in Indonesia and used as an energy source; the country has about 40 percent of the world's resources. The government of President Yudhoyono plans to make Indonesia the world's largest user of geothermal energy by 2025.

Larger investments - namely 140 billion dollars by 2012 - are also planned for the expansion of highways, railways as well as seaports and airports. Maintenance and upgrading work is urgently needed, especially in road traffic, as 95 percent of goods are transported overland, but the roads are heavily congested and in poor condition. In the metropolitan areas in particular, the lack of urban planning becomes a problem as there is no space for new streets. The deficiencies in the road network are also increasing the operating costs for trucks, which at $ 0.34 per kilometer are significantly higher than those in China, Vietnam, Malaysia and Thailand with an average of $ 0.22 per kilometer. This endangers Indonesia's competitiveness. The government sees a need for action: of the 100 projects planned in cooperation with the private sector, 35 concern the road network, and several toll highways are planned. In the Jakarta area alone, around $ 4.4 billion will flow into seven city highways. In the past, however, there were delays in the implementation of these projects, as legal disputes often arose in connection with the expropriation of the land affected by the construction planning.

Another focus is on the expansion of the airports, since Indonesia, as a member of the Southeast Asian confederation ASEAN, has to prepare for the Open Skies Agreement, which will come into force in 2015, which is intended to liberalize air traffic in a market economy. In order to protect national airlines from excessive competition from foreign providers, Indonesia decided to initially only open the five largest of its 29 international airports to airlines from the nine ASEAN partner countries. The three most important airports in Indonesia are already running far beyond their capacities. In 2010, at 44.3 million, more than twice as many passengers passed Soekarno-Hatta Airport than its design allowed.

With the “Kalibaru” port project in Jakarta, which was launched in April 2012 (whose port Tanjung Priok, with a handling volume of 5.62 million container units / TEU, was ranked 23rd in the world rankings drawn up by the World Shipping Council in 2011), Indonesian shipping should also become more efficient. Compared to neighbors like Singapore, Malaysia and especially China, Indonesia has a lot of catching up to do in the container shipping business. According to the President of the Indonesian Port Corporation (IPC), Richard Joost Lino, the major project, which will cost almost two billion dollars in the first construction phase alone until 2014, will significantly reduce waiting times for ships and thus halve the freight costs. In addition to improving the competitiveness of the companies, the three container terminals and two terminals for petroleum products that are initially planned will help to cope with the growing volume of goods handled. Indonesia's imports and exports grew by 30 percent each in 2011 compared to the previous year. The port project is to be financed by IPC funds, national and international loans and by shipping companies and port operators as partners or investors.

Since government investment plans alone cannot close the gaps in the infrastructure, the Indonesian government is striving to involve the private sector more closely in infrastructure projects through public-private partnerships. So far, financing problems have repeatedly led to delays in the repair work; Finance Minister Agus Martowardojo also criticizes the reluctance to allocate the allocated state budget. However, infrastructure projects are considered risky among investors: In Indonesia, they are usually not subject to uniform regulations across the country, and long-term investments often only generate a low return on capital.


At 28.5 years, the average age in Indonesia is around 16 years below that in Germany; The role of adolescents and young adults is correspondingly important for the future development of the country. Growing up as part of the “post-Reformasi generation”, i.e. after the overthrow of the military regime of dictator Suharto, today's youth sees themselves torn between the freedoms of a democratic society and the authoritarian-patriarchal values ​​that they mostly come from their parents and School. In the search for stability, religion often serves as an anchor. According to a study by the Friedrich Naumann Foundation and the Goethe Institute (“Values, Dreams, Ideals - Muslim Young People in East Asia”, 2011), 47.5 percent of young Indonesians define themselves more through their religion than through their nationality, only 40 .8 percent see themselves primarily as Indonesians.

Despite official religious freedom, membership of one of the six recognized denominations is compulsory, otherwise no official documents will be handed out. Since around 88 percent of Indonesians are Muslim, Islamic values ​​determine the country. A certain neoconservatism can be observed among the 15 to 25 year olds, which is expressed, for example, by wearing the headscarf more often, often from early childhood. Only 0.3 percent of those questioned speak out against the headscarf. The “Hudud” punishments stipulated in Sharia law, such as the death penalty for murderers, are supported by a large majority (66.8 percent); 49 percent are in favor of chopping off hands in the event of theft. Possible explanations for such drastic views among young people are a lack of legal certainty and corruption. Nevertheless, young people believe in democracy: only 24.3 percent would replace the constitution with the Koran; and a clear majority (66.3 percent) consider the existence of an opposition to be necessary.

The Friedrich Naumann Foundation and the Goethe Institute assume that not all of the statements made by the young people are entirely true and that some of the answers reflect not so much personal convictions but rather the general expectations placed on the respondents. According to the survey, belief in God is rated as more important than partnership, friends, prosperity and professional success. Also, only 10.8 percent state that they think it is okay to drink alcohol in moderation. However, the reality is often different.The young people mainly spend their free time with friends and - especially in the city - in front of the television and the computer. Only 28.7 percent actually pray five times a day, 26.2 percent go to the mosque in their free time. New technologies are very important; 83 percent of those surveyed have a mobile phone.

The euphoria associated with economic growth has only partially reached Indonesia's youth. An astonishing 93.8 percent state that they are basically happy with their life, but only 52 percent are confident about the future. One reason for this can be found in the continuing high level of youth unemployment in Indonesia: in 2010, 21.4 percent of young people between 15 and 24 were unemployed, and 10.2 percent of this age group were neither in training nor had a job. In 2008 youth represented 21 percent of the Indonesian workforce but 57 percent of the unemployed. According to estimates by the ILO, youth unemployment in Indonesia is almost five times higher than that among adults, while in most other countries it is only two to three times higher.

A good education is therefore a priority for young people and, according to surveys, is even more important than earning a decent income later on. But even a good education is no guarantee for a job: The number of unemployed university graduates more than doubled between 2005 and 2010 from 5.9 percent to 13.9 percent. The proportion of unemployed people who have had secondary or tertiary education has also risen from 42.7 percent to 54.1 percent over the five years. Overall, however, the trend on the Indonesian labor market is positive: the unemployment rate has fallen steadily since its peak in 2006.


Corruption, according to UN Secretary General Ban Ki-moon a “cancerous growth” that “undermines social progress and leads to inequality and injustice”, affects Indonesia in particular. In the latest corruption perception index compiled by Transparency International, which measures the reputation of a country with regard to the susceptibility of its politics and administration to corruption, Indonesia was ranked 100th with a value of 3.0 (out of 183; New Zealand had a value of 9.5 in 1st place, Germany with 8.0 in 14th place); Although it has steadily improved its position, it fared far worse than regional competitors such as Singapore (4th place), Malaysia (60), China (75) and Thailand (80).

According to estimates by "Indonesia Corruption Watch", the Indonesian anti-corruption initiative, corruption within Indonesia's bureaucracy alone lost $ 238 million in 2011, mostly in the form of embezzlement, embezzlement and bogus expense reports. With a view to the parliamentary and presidential elections in 2014 and the associated high costs for politicians and parties, "Indonesia Corruption Watch" coordinator Danang Widoyoko called in an interview with the Jakarta Globe newspaper, in particular "on corruption in the area of ​​state financing of energy - and to respect mining projects ”.

Before his re-election in 2009, President Susilo Bambang Yudhoyono had promised to do more to fight corruption. The state anti-corruption agency PKP has recorded a number of small victories in the past few years. Since the end of military rule, dozens of politicians and officials have been held accountable for corruption through the media. While Yudhoyono has maintained his anti-corruption rhetoric - warning in his Independence Day address on August 17, 2012 that corruption would jeopardize economic growth - the fact that the president has not always been on the side of the PKP in the past, and Corruption cases within his Democratic Party (PD) his reputation and the PD's prospects for success in 2014.
In August 2012, for example, the entrepreneur and PD politician Hartati Murdaya, who advises the President as a member of the National Economic Committee, was paid a bribe of over $ 300,000 for the granting of two palm oil concessions to the head of Buol (Sulawesi) on suspicion to have targeted the PKP. With Inspector General Djoko Susilo, the PKP is also taking action for the first time against an active police general previously responsible for the traffic police, who is accused of accepting a bribe of $ 200,000 when placing an order for the procurement of 1,200 driving simulators. The order went to a local grain cork maker with no experience in sourcing simulators, of which only 100 were delivered. The outcome of these proceedings, according to the assessment of the Economist Intelligence Unit, should not only influence the 2014 elections, but also show how seriously the Indonesian government takes the fight against corruption in the future.


Although Indonesia is a member of the G-20, the country is still comparatively little urbanized. Three out of five Indonesians live in rural areas and agricultural work is the livelihood of two thirds of the poorest population. However, only a quarter of all farmers own the land they cultivate. This has repeatedly led to conflicts in the past. Small farmers have long been demanding better legal protection against expropriations and equal treatment by the authorities.

Agriculture is nevertheless shaped by small farmers. In accordance with the geographical conditions of Indonesia with its 17,500 often mountainous islands, agricultural cultivation usually takes place on less than half a hectare of usable area. The most common products are rice and cassava (manioc), followed by tea, palm oil and rubber, the latter mostly being grown or extracted in larger, industrial companies. Pasture farming plays only a minor role.

The production value of agricultural products corresponds to a share of 15 percent of the gross domestic product. The agricultural sector is thus significantly smaller than the industrial (47 percent) and service sectors (38 percent). The fact that Indonesia's trade balance is positive overall is also due to the attractiveness of its agricultural goods. These made up 23 percent of its exports, but only 11 percent of its imports. An important trading partner is the European Union, whose demand for Indonesian palm oil is growing steadily. However, agricultural products lag far behind fuel and mining products, which make up 39 percent of Indonesia's exports. It is also noticeable that more than half of Indonesia's 1,800 largest farms are in the hands of foreign investors.

With a period of growth that began after the country gained independence from the Netherlands in 1949, the agricultural sector made a huge contribution to alleviating the once ubiquitous poverty in Indonesia. However, agricultural production has stagnated since the 1980s. The reasons for this are complex: State subsidies were often used in the wrong places, namely in larger, industrial companies, but not for infrastructure measures or for research and development. In addition, much of the funds were devoured by corruption. In addition, indigenous mountain peoples, but now also numerous small farmers, use the often criticized traditional method of slash and burn to make the less nutrient-rich soil of the rainforest more fertile.

A comprehensive reform of the agricultural sector is now considered a key task for safeguarding the future of the rainforest, not least because of the threat to the rainforest - not only through slash and burn but also through the draining of peat swamp forests - and the fact that Indonesia is the world's third largest emitter of CO2 Country. The key points of such a reorganization, namely the desired balance between economic and environmental interests, are being intensively debated, but have not yet been resolved in the long term (see also the article “Poor rich country” by Manuel Schmitz, pp. 50–54).


The military was the most influential power in Indonesia for decades and still occupies an important position today. After independence from the Netherlands, the Indonesian military wanted to be understood as the protector of the nation and the unity of the country. Sections of society saw it as the only institution that could initiate a far-reaching modernization of Indonesia. To this day, the military defines its responsibilities comprehensively: According to the white paper published in 2003, its tasks include not only national defense, but also the fight against terrorism, separatism, piracy, illegal logging and human trafficking - a range of tasks that began with the Islamist wave of terror in 2002/03 and the devastating attack on Bali (220 dead) in October 2002. While internationally networked terrorism has since lost its importance, the Hanns Seidel Foundation believes that local terrorism, for example by the recently sentenced West Javanese Islamist group around Pipi Fernandes, is on the advance.

The sources of funding for the military pose a certain mystery. State military spending is comparatively low - both in terms of the size of the country and in a regional comparison. However, the military has also been active in many areas of the economy since it was entrusted with the management of expropriated Dutch companies during the struggle for independence in the late 1940s. Still, the Indonesian economy is not dominated by the military. According to its own information, it has withdrawn from many areas in business and society. Ultimately, however, the financing of the army is still unclear: In addition to more or less legal economic activities, there are also clearly illegal sources of income such as protection racket.

The concept on which the comprehensive understanding of one's own role is based is called “dwifungsi”: This means that the Indonesian military has a dual function in many areas. Soldiers are not only active in the army, but also in many political and social organizations, in state-owned companies, in parliaments, in administration and in parties. In the past, this even went so far that large sports associations were run by members of the military. Just as important for the military was its local anchoring: it was present throughout Indonesia, in every region, in every municipality, and local leaders - whether in politics or business - were dependent on good cooperation with the military. The power of the military is also supported by secret services and elite troops such as Kopassus.

Since the freedom of the press was strengthened, Kopassus in particular has been the focus of criticism: The unit is accused of serious human rights violations. After reports of atrocities committed by the Kopassus in East Timor in 1999, the US completely stopped its military aid - a decision that was not repealed until the Obama administration in 2010. Since then, the United States has again been militarily engaged in Indonesia, which has been sharply criticized by human rights organizations such as Human Rights Watch: HRW considers the reforms of the military to be inadequate and points out that those responsible for human rights crimes have not yet been held accountable . This also applies to the former unrest province of Aceh, which has been shaped by the guerrilla struggle of the GAM (Gerakan Aceh Merdeka, Movement for a Free Aceh) for the past 30 years. However, since the signing of a peace agreement in 2005 and greater autonomy, the situation in Aceh has improved significantly.

The military is trying to improve its capabilities, which are currently considered to be rather limited. In January 2012 it became known that the army wanted to buy decommissioned Leopard tanks from the Dutch military. This decision was criticized by parts of the public, parliamentarians and armaments experts, as the heavy tanks are considered unsuitable for use in densely populated and geographically fragmented Indonesia. The Army Chief of Staff justified this decision by saying that Indonesia must have similar capacities to its neighbors. The question is, however, how the armament can be designed in the most sensible way.

In addition to the risk of a regional arms race, the Indonesian military faces other challenges. Reforms are necessary so that the military withdraws further from the state, economy and society and concentrates on its core tasks. In order for the armed forces to be accepted in society, it is also essential that mechanisms are developed to record human rights violations committed by the armed forces, to investigate them and to bring perpetrators to justice. So far these have been under the jurisdiction of the army; Violations of human rights are either not punished or only subject to minor penalties.

Piracy and shipping

Ten years ago, Indonesian waters were considered the most dangerous in the world. In 2003 alone, 21 seafarers were killed in pirate attacks and 71 were reported missing. In total, the London-based International Maritime Bureau (IMB) counted 121 criminal incidents on the Indonesian sea. Even without taking into account the number of unreported cases, which is probably two or three times as high, at the beginning of the 21st century more than a quarter of all pirate attacks worldwide took place in Indonesia. The Strait of Malacca, the 900 kilometer long sea route between the Malay Peninsula and the Indonesian Sumatra, was particularly hard hit. Insurance companies even classified the area at times as a “war risk zone” - a designation that is otherwise only given to theaters of war such as Iraq or Afghanistan.

The Strait of Malacca is part of one of the most important trade routes in the world. Around a quarter of world trade and half of global oil transports pass through the bottleneck between the Indian and Pacific Oceans in 90,000 ship passages. As a link between the economies of China, India, Japan and South Korea, the sea route is one of the busiest straits in the world. The threat of piracy in the Strait of Malacca is automatically a serious problem for international trade.

In the years after the turn of the millennium, the economic losses caused by crime on the high seas were estimated at between $ 30 billion and $ 50 billion a year worldwide. The Southeast Asian economy was particularly hard hit by stolen cargo, delayed shipments and skyrocketing insurance premiums. Indonesia in particular, the largest island nation in the world with over 80,000 kilometers of coastline, provided the perfect breeding ground for piracy. Against the background of the Asian crisis and the fall of the Suharto regime in the late 1990s, the country struggled with political instability and high unemployment. The impoverished population of the coastal regions turned to smuggling and piracy; Raids on lavishly laden merchant ships were among the most lucrative businesses.

At the latest when China and the USA, whose business in Southeast Asia had been significantly affected by piracy, indicated to the residents of the Strait of Malacca in 2004 that they would ensure the safe passage of their ships themselves if necessary, this became the case for Singapore, Malaysia and Indonesia on a question of sovereignty over their waters. Ibun Hadi, at that time responsible for the Asia / Pacific department of the Indonesian Foreign Ministry, announced that "Indonesia would strongly oppose any interference by foreign security forces in its waters"; instead, the Southeast Asian states themselves took the initiative.

In 2004 they signed the Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships in Asia (ReCAAP). Together with now 17 other countries - in addition to the members of ASEAN, also European trading nations such as the Netherlands and Great Britain - Indonesia has committed itself to cross-border cooperation. Joint patrols in the Strait of Malacca have ensured close security monitoring ever since. The ReCAAP members now exchange information about pirate activities around the clock via the so-called information sharing system, a protected network. With the adoption of the “Eyes in the Sky” program, an international cooperation was also agreed for the air surveillance of the affected waters.

These strategies put a stop to further pirate attacks. Increased military presence and regular arrests turned the previously profitable business into a risky undertaking. Pottengal Mukundan, head of the International Maritime Bureau in London, sums up the reason for the successful fight against piracy: “The pirates are interested in profit. In Somalia the profit is huge, but the risk is zero. In the Strait of Malacca, states are cooperating to shift this imbalance. Every time the pirates try to raid a ship, the navy thwarts it.The question for the pirates is whether the business is still worthwhile. "

A decade later, the piracy problem for Indonesia has almost completely disappeared. In 2004 there were 38 more attacks in the Strait of Malacca, after which the number of incidents fell rapidly: 12 in 2005, three in 2006 and 2011 not a single successful pirate attack was recorded.


521 natural lakes, a multitude of rivers, tropical rainfall: Indonesia has more than 6 percent of the world's water resources. Nevertheless, water is a scarce resource on many of the archipelago's islands. Bad management, a lack of infrastructure and a lack of government investment are a burden for the Indonesian population and the economy.

In 2010, according to World Bank statistics, 82 percent of Indonesians were able to fall back on an "improved water supply". The remaining 43 million people do not get their water from pumps or protected wells, but from rivers, lakes or rainwater. In a regional comparison, Indonesia is far behind China (91 percent), Vietnam (95 percent) and Malaysia (100 percent). Although the country is one of the rainiest nations in the world with a rainfall rate of 2,700 millimeters per year, there is still an acute water shortage in Bali, Java and the Lesser Sunda Islands. On the one hand, this is due to the uneven geographical distribution and the seasonal fluctuations in precipitation - over 80 percent of the rain falls between October and April - and, on the other hand, there is a lack of advanced technology for long-term storage of water reserves.

The target set by the United Nations of halving the number of households without a safe water supply or connection to the sewage system by 2015 will probably fall far short of Indonesia. In urban areas, the supply of clean drinking water even declined sharply between 1993 and 2009. Everything indicates that the hesitant expansion of the infrastructure is not up to the enormous growth of the cities. Acting quickly would be extremely important. The country's water consumption, which was 156,000 million cubic kilometers in 2000, is estimated to more than double by 2015.

The problem is exacerbated by the fact that environmental degradation as well as industrial and private sewage affect the island nation's natural water reserves. Around 100 million Indonesians still do not have access to improved sanitary facilities, and more than half of the households discharge their wastewater directly into local waters. According to a study by the Association of Southeast Asian Nations (ASEAN), 54 percent of Indonesia's rivers are now heavily polluted. This is one of the main reasons why gastrointestinal epidemics and other so-called water-related diseases continue to break out locally. Diarrheal diseases caused by contaminated drinking water play a large part in the fact that 33 out of 1,000 Indonesian children die before the age of five - a maximum in a regional comparison. Hepatitis A and typhus are also more common in Indonesia than in other parts of Southeast Asia.

It is not surprising that the critical situation of the water supply is also having an impact on Indonesia's economic performance. The structural deficiencies in sanitary facilities alone and the stresses on the health system caused by water-related diseases cost the state around 6.3 billion dollars per year, which corresponds to 2.3 percent of the gross domestic product. The already existing and worsening water shortage is also causing ever increasing competition between industry, households and agriculture. The agricultural sector in particular, which accounts for the largest part of Indonesia's water consumption at 58.5 percent, needs strict reforms. With an annual consumption of around 2220 cubic meters of water per hectare, Indonesian irrigation technology is more inefficient than that of Cambodia and the Philippines.

As early as 2010, the World Bank recommended “promoting irrigation efficiency by investing in technology with a higher level of performance”. The "Water Investment Roadmap" published by the Indonesian government and the World Bank in 2012 states that around seven billion dollars would have to flow between 2011 and 2014 in order to achieve the targets of the Millennium Development Goals with regard to water - with a funding gap of around 3, $ 5 billion is an ambitious plan.

To really address the problems, the state will need to significantly increase its annual water budget, which is currently around $ 280 million. Programs such as the construction of ten million new urban water connections by 2015 are a start, but they seem like a drop in the ocean compared to the enormous need to expand the water infrastructure.

At the same time, the problems to be tackled are increasing. As studies show, the expansion of tourism could generate enormous financial gains for the state, but the already existing water shortages in the country would worsen fatally. The tourism industry in Bali already uses around 65 percent of the available water. While hotel complexes are being equipped with swimming pools and irrigated golf courses, the local population is struggling with water shortages and polluted springs. If politicians fail to reform water management for the benefit of the population, Bali is likely to face a tangible water crisis by 2025 at the latest.