LYCOS RETRIEVER 
Indonesia
built 509 days ago
The liberalization of Indonesia's downstream oil and gas sector has been under discussion for several years. In October 2001, the Indonesian legislature passed the much-vaunted Oil and Gas Law 22/2001 which limited Pertamina's monopoly on upstream oil development (which requires it to be included in all PSCs) by the end of 2003. Also, Pertamina's regulatory and administrative functions were transfered to other entities, while its regulatory role was spun off to a new body, BP Migas. Reports from foreign firms are that BP Migas is proving to be even less efficient than the original Pertamina entity. Almost three years after the law was passed, several regulations have still not been finalized and are unlikely to be before a new government is elected in July.
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In natural-resource potential, Indonesia is one of the wealthiest countries in the world. It has great timberlands; vast rain forests of giant trees (among the world's tallest) cover the mountain slopes, and teak, sandalwood, ironwood, camphor, and ebony are cut. Palm, rattan, and bamboo abound, and a great variety of forest products is produced. Indonesia is a major exporter of timber, accounting for nearly half of the world's tropical hardwood trade. However, the rapid deforestation of Indonesia's hardwoods, mainly due to its expanding population and growing timber-related industries, has caused concern among international environmental groups and sparked ethnic conflict (particularly between immigrants and native Dyaks on Borneo). In addition, enormous out-of-control brush fires, started illegally during the dry season to clear land, have caused significant health, navigation, and economic hazards some years.
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Indonesia has attracted increased foreign investment in recent years, but corruption is widespread. Labor unrest has been a persistent problem due to the tensions between the predominantly ethnic Chinese business owners and a workforce made up almost entirely of ethnic Malays. The country's economy was severely impacted by the 1997–98 Asian financial crisis and it continues to experience high unemployment and inflation, although the nation began to rebound in 2000. The main exports are oil and gas, electrical appliances, textiles, wood and wood products, and rubber. Imports include machinery and equipment, chemicals, fuels, and foodstuffs. Indonesia's main trading partners are Japan, Singapore, the United States, China, and South Korea.
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Indonesia's fuel production has declined significantly over the years, owing to aging oil fields and lack of investment in new equipment. As a result, despite being an exporter of crude oil, Indonesia is now a net importer of oil and had previously subsidized fuel prices to keep prices low, costing US$ 7 billion in 2004 [8]. The current president has mandated a significant reduction of government subsidy of fuel prices in several stages [9]. In order to alleviate economic hardships, the government has offered one-time subsidies to qualified citizens. The government has stated the cuts in subsidies are aimed at reducing the budget deficit to 1% of gross domestic product (GDP) this year, down from around 1.6% last year.
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Because of its tropical climate and geography, much of Indonesia’s population lives near water, either on the coast or by rivers and lakes. Indonesia has no major rivers that are similar in size or scope to the Mekong or Yangtze in mainland Asia, but it does have many important rivers. Kalimantan has the largest rivers, including the Mahakam in East Kalimantan and the Martapura and Barito in South Kalimantan. Most of these rivers originate in the island’s central massif (mountain mass) and meander through extensive swamps as they approach the coast. Settlements such as Samarinda and Banjarmasin cluster along the rivers, which serve as communication routes into the interior.
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Early in the Christian era, Indonesia came under the influence of Indian civilization through the gradual influx of Indian traders and Buddhist and Hindu monks. By the 7th and 8th cent., kingdoms closely connected with India had developed in Sumatra and Java; the spectacular Buddhist temples of Borobudur date from this period. Sumatra was the seat (7th–13th cent.) of the important Buddhist kingdom of Sri Vijaya. In the late 13th cent. the center of power shifted to Java, where the fabulous Hindu kingdom of Majapahit had arisen; for two centuries it held sway over Indonesia and large areas of the Malay Peninsula. A gradual infiltration of Islam began in the 14th and 15th cent. with the arrival of Arab traders, and by the end of the 16th cent. Islam had replaced Buddhism and Hinduism as the dominant religion. The once-powerful kingdoms broke into smaller Islamic states whose internecine strife made them vulnerable to European imperialism.
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