Indonesia should be closely monitored because of its inherent weaknesses and its ability to export insecurity around the world. Among the largest countries in the world in terms of population Indonesia is the weakest one, especially when it comes to measure its political stability. This country has survived the decades of authoritarian Suharto regime, but many problems have also survived it until our days. The economy is far from what's needed to break with the chronic poverty and to bring the country into 21st century. The terrorist activities and inter-ethnic hatred can destabilize the country, bringing chaos and disintegration.

Indonesia is the largest country archipelago in the world. Hundreds of millions live on thousands of islands. The country is subject to numerous natural hazards some of which with disastrous effects on the population and economy. The devastating tsunami of December 2004 is just one example how hazardous the life can be. The lack of proper sanitation in many parts of the country leads to spread of contentious diseases, some of which thanks to new transportation means can reach within day or two places as far as North America.

The country has still to undergo its main stage of modernization. Looking at the Jakarta skyscrapers or at the Bali villas it's hard to imagine that tens of millions still live in pre-modern age. Due to its strong population growth the country can't overcome its inherent poverty. The wrong policy of energy subsidies has forced away the foreign capitals and the result is that the oil production can't meet the domestic demands. With trends following the same speed and direction in less than 20 years Indonesia will have its oil reserves completely exhausted.

Speaking politics Indonesia is far from stable even 7 years after general Suharto was removed from office in 1998 during the Asian financial crisis. Two presidents that followed between 1999 and 2004, Abdurrahman Wahid and Megawati Sukarnoputri, were also removed from office because of political and financial scandals. The lack of political stability means no clear and stable laws and rules. In a country that is considered to be among the worst cases in terms of corruption such lack of strong and legitimate government means the investors, domestic and foreign alike, are left unprotected at the merci of the omnipotent bureaucracy.

In places like Bali, where the foreign residents are numerous and the investment climate seems good to settle in, the prices and rents are far from attractive for those coming from Australia, Europe and North America. The western-style residential properties are sold for $800-1,000 per sq. meter. The waterfront parcels are sold for $100,000 and up. The average-sized villas are rented for more than $1,000 per month or more than $300 per week.

Country profile:

• Area: 1,919,440 sq km
• Population: 242 million (July 2005 est.)
• Population growth rate: 1.45% (2005 est.)
• Life expectancy at birth: 69.57 years
• Total fertility rate: 2.44 children born/woman (2005 est.)
• Major infectious diseases: high degree of risk
• GDP real growth rate: 4.9% (2004 est.)
• GDP per capita: purchasing power parity $3,500 (2004 est.)
• Main trading partners: Japan, U.S., China, South Korea.
• Debt external: $141.5 billion (2004 est.)
• Internet users: 8 million (2002)

(Source: CIA - World Factbook 2005)

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See also the directory of companies providing real estate services in, and general real estate information of Indonesia.