FGX Indonesia Final Study Guide

Indonesia is an ___________ nation

archipelago

How many islands make up Indonesia?

~17,000

How many islands are inhabited?

6000

What is the population of Indonesia?

> 260 million

Indonesia is the world's ___th most populous country

4th

What are Indonesia's 5 main islands called?

Java, Sumatra, Borneo (Kalimatan), Sulawesi, and New Guinea (Papua)

Indonesia is divided into __ provinces

38

What makes the province Aceh unique?

It is the only province officially authorized to implement Islamic Sharia law

What makes the province Yogyakarta unique?

It is the only Indonesian province recognized as a monarchy

What is Indonesia's "Special Capital Region"?

Jakarta

Where is the new capital of Indonesia planned to be relocated, also making it the 39th province?

Nusantara

What is the national language?

Bahasa Indonesia

What is Indonesia's national motto?

"Bhinneka Tunggal Ika" or Unity in Diversity

What is the majoirty religion?

Islam (87.1%), followed by Christianity (10.4%) and Hinduism (1.67%); there is also Buddhism (.7%), Confucianism (.03%), and other folk (.04%)

What is the population of Jakarta?

~32.6 million over 2700 square miles

What is the population of Bali?

4.4 million over 2200 square miles

Where was homo erectus discovered?

In Java roughly 1.7 million years ago; originally called Pithecanthropus or Java man

On which island is Jakarta located?

Java

What was the maritime trade empire controlling the Straits of Malacca from the 7th to 13th centuries?

The Srivijaya Empire (Sumatra)

What was the powerful Hindu-Buddhist kingdom that served as an early unifier of the archipelago from the 13th to 16th centuries?

The Majapahit Empire (Java)

How was Islam introduced to Indonesia?

Muslim traders from India and Arabia (at first, mostly in Java and Sumatra) - 13th to 16th centuries

What European colonizers first arrived in Indonesia and why?

Portuguese for spice trade

What European colonizers had the most significant and long-lasting influence over Indonesia?

Dutch East India Company (1600s - 1949)

In 1811, Java fell to the _________________.

British East India company, that is before the Dutch returned and reconsolidated control in 1815

What was the beginning of organized nationalism in Indonesia? When?

Budi Utomo ("Noble Endeavor") in 1908

What foreign occupation weakened colonial rule?

Japanese (1942-1945)

When was Indonesia's proclamation of Independence?

August 17th, 1945

When did the Dutch formally recognize Indonesia's independence?

1949

What was Suharto's "New Order"?

emphasized economic growth but limited freedoms w/ military backed regime, Jakarta became capital & Bali opened to tourism (1967 - 1998)

Describe the Reformasi and Democratic transition.

Brought along democratic reforms, decentralization, and rapid growth/urbanization but also challenges of corruption, inequality, and environmental issues

Describe Jakarta

Indonesia's economic, cultural, and political center. It face major challenges such as high population density, traffic congestion, and flooding & land subsidence

Describe Bali

Indonesia's center of art, ritual, and agriculture, serving also as a tourism hub

Does Bali's main religion differ from the rest of Indonesia?

Yes, it is ~87% Hindu (Balinese Hinduism) and leads with the moto Tri Hita Karana (harmony among people, nature, and gods

Bali makes up ___% of regional GDP

50%

Before the pandemic, Bali saw how many international visitors annually?

6.3 million

What challenges does Bali face?

Overreliance on tourism, high cost of living, labor migration, inequality between local and foreign investors, overdevelopment leading to environment challenges, cultural commodification for tourism

Globalization

The socioeconomic reform process of eliminating trade, investment, information technology, and cultural and political barriers, leading to increased economic growth and geopolitical integration/interdependence

Globalization Pros

consumers get lower prices and more selection; entrepreneurs gain access to global markets and talent, developing nations have access to new tech and internet, and environment receives global cooperation

Globalization Cons

consumers have quality concerns, entrepreneurs compete internationally and struggle with IP, developing countries are exploited, and environmental pollution, and resource depletion are constant

How did COVID impact globalization?

Disruptions in global supply chains, accelerated digital transformation, decrease in global travel/tourism, shift in trade policies for essential goods, consumers pay more attention to health and sustainability, nationalism has been fueled;

Companies are now looking to increase resilience through reshoring or nearshoring to avoid supply chain disruptions.

What is Indonesia's main export partner as of 2023?

China (followed by US, India, Japan, and then Singapore)

What 3 main aspects survived COVID?

Trade, global economic interconnectedness, and the "globalization imperative"

Exchange Rate

The rate at which one currency is exchanged for another

What type of exchange rate does Indonesia use?

Floating (meaning the value of the Indonesian Rupiah (IDR) changes based on relative supply and demand in the market)

Fixed vs Floating Exchange Rate

Floating changes while Fixed does not change

What is Indonesia's currency?

Indonesian Rupiah (Rp) (IDR)

What is the current exchange rate for 1 USD?

Rp 16.702,95 (remember decimals and commas have flipped functions here)

Emerging Market

Key traits include rapid growth & industrialization, expanding middle class, improving but volatile financial systems, and economic/political risks. Indonesia is a key emerging market due to its young labor force, rich natural resources, and the fastest-growing digital economy in Southeast Asia.

What are indicators of development?

GDP per capita, HDI (Human Development Index), Gini Coefficient, Poverty Rate, Literacy, and Infrastructure

Human Development Index (HDI)

A summary measure of average achievement in key dimensions of human development (includes life expectancy, education, and standard of living)

Gini Coefficient

A measure of inequality that represents how a population's income or wealth is distributed (a lower Gini Coefficient means more equality)

Describe Rostow's Stages of Growth

Traditional Society (agricultural-based economy), Preconditions to Take-Off (developing manufacturing), Take-Off (industrialization), Drive to Maturity (HDI increases, tech and economy grows), Age of High Mass Consumption (capitalist system characterized by mass production and consumerism)

What is the main criticism of Rostow's Stages of Growth?

Western bias that is too much of a linear path

What is Indonesia's Gini Coefficient?

0.375

What is Indonesia's HDI?

75.90

What is Indonesia's poverty rate?

8.57% (has been decreasing)

What is Indonesia's literacy rate?

96% (has been increasing)

Opportunites of Emerging Markets

Growing consumer class, digital adaptation, natural resource wealth, regional leadership, global supply chain shifts

Risks & Challenges of Emerging Markets

Infrastructure gaps, governance, environmental sustainability, skill shortage, global market volatility

Middle Income Trap

A country gets stuck at middle-income levels and can't transition to high-income status (Indonesia faces risks like stagnating productivity, a large informal sector, inequality in infrastructure and education, lack of high-value production)

Emerging markets offer ____ growth and ____ volatility

high; high

What does Indoesia's future growth depend on?

The Nusantara capital city project, green industrial policies (leveraging nickel reserves for EVs and batteries), and digital transformation (fastest growing internet market), ASEAN leadership

Culture

learned behavior; a way of life for one group of people living in a single, related, and independent community; cultura is learned and shared

What are Hofstede's 5 dimensions?

Power Distance: Egalitarian vs. Authoritarian

Individualism vs. Collectivism: "I" vs "we"

Uncertainty Avoidance: Should we try to control the future or let it happen?

Masculine vs Feminine: Being best vs. Being liked

Time Orientation: Long-term vs. Short term horizons

Indulgence: Indulgent vs. Restrained.

How does the Iceberg Model relate to culture?

The What: language, behavior, artifacts, symbols, food, literature

The Why: values, assumptions, beliefs, norms, expectations, attitudes, philosophies

Compare the US and Indoensia Culturally

Power Distance: Indonesia has a greater power distance (power is centralized, obedience is expected, communication is indirect, and it's hierarchy-dependent)

Individualism: Indonesia is highly collectivist

Indulgence vs Restraint: Indonesia is a restrained culture where social norms control desires whereas the US is more indulgent prioritizing personal happiness and leisure

Geopolitics

a study of the influence of such factors as geography, economics, and demography on the politics and, especially, the foreign policy of a state

How is Indonesia a strategic location?

Controls 3 key maritime chokepoints: the Malacca, Sunda, and Lombok Straits

___% of world trade travels by sea

90%

Indonesia is abundant in resources such as...

nickel, palm oil, and gas

Describe the Strait of Malacca

It is the world's busiest strait, handling 25% of global trade and 90,000 vessels annually

What is the Strait of Malacca's one drawback?

It is shallow

Indonesia is the __th largest global economy

16th (projected Top 10 by 2030)

Indonesia's median age is...

30.2

Indonesia has a growing middle class of ______ people per year

7 million

Indonesia's digital economy is projected to reach $________ by 2025

$220 billion

What is Indonesia's foreign policy?

"Free and Active": non-alignment, strategic autonomy, numerous partnerships with nations (holding allegiance to none), playing a large part in ASEAN

Indonesia is the __th largest greenhouse gas emitter

8th; 50% emissions from land use and deforestation

Indonesia is home to the world's ___rd largest rainforest

3rd

What generates the majority of Indonesia's power (60%)?

Coal

Name Indonesia's key energy conservation policy.

Just Energy Transition Partnership (JETP)

What is the US's largest competitor in Indonesia?

China

Describe the Natuna Island Conflict

Natuna Basin value: holds 1.3 billion barrels of oil and is a major fishing region sustaining local lives

Tension: Natuna's exclusive economic zone overlaps with China's "Nine-Dash Line", creating military conflicts

Describe ASEAN

Association of Southeast Asian Nations

- 12 member states

- 680 million people

- Mediated Myanmar crisis, South China Sea code of conduct, and trade integration

Where is ASEAN headquartered?

Jakarta, Indonesia

Digital ads in Indonesia account for roughly ___ of all media spending

3/4

What is the most used app amoungst Indonesian youth?

TikTok

Digital advertising in Indonesia has a market size of $________

$3.23 billion

The majority of Indonesian digital ads showcase...

food, beverage, and smart devices

Indonesia's digital media must be cognoscente towards...

collectivism and family-orientation, religious and moral norms (ex. Ramadan), language and diversity, price sensitivity and promo-culture (sales and discounts), governmental regulation and age limitations, global collaboration with established local brands (i.e.. Tokopedia and Gojek)

Indonesia has over _____ regional languages

700

Supply Chain

A network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product (suppliers > manufacturers > distributors > retailers & wholesalers > customers & end users)

Cultural Intelligence (CQ)

The capability to function and relate effectively in culturally diverse situations

What are the 4 CQ Capabilities?

Drive (motivational), Knowledge (cognitive), Strategy (metacognitive), and Action (behavioral)

What are key Indonesian cultural themes?

High-Context Communication: indirect, silence is comfortable

High Avoidance: social harmony, less confrontation

Hierarchy & Respect: titles matter, respect your elders

Collectivism: team-driven, "Gotong Royong" or communal cooperation culture

Religion: Muslim-majority, Halal, prayer breaks, attire and dietary restrictions

Urban-Rural-Island Diversity and Differentiation

What is the world's largest Muslim-majority country?

Indonesia

What is forbidden in Islamic finance?

Riba (interest) and Gharar (overcharging/injustice)

What is the meaning of "haram"?

forbidden

What is the meaning of "halal"?

permissible or lawful

What change in Indonesia created a need for a formal banking system?

oil revenues creating wealth in the 1970s