Indonesia. The high expectations of Indonesia's President
Joko Widodo, elected in 2014, were partly to shame. His
government found it difficult to get through promised
reforms and boost the economy.
The fall in commodity prices and lower demand from China
was part of the explanation. Indonesia is a major producer
of palm oil, tin, coal and other minerals.
The crisis was also noticed in the currency, rupee, lost
in value. At times, it has been just as weak against the US
dollar as during the 1998 financial crisis. However, the
government continued to follow a law that the budget deficit
should not exceed 3% of GDP.
Widodo reshaped his government in August and appointed
six ministers. A new addition as Secretary of Commerce was
Harvard-educated economist Thomas Lembong.
COUNTRYAAH, several economic reforms were launched during the year.
Foreigners would get open bank accounts and the government
tried to lower import duties on a number of goods.
Similarly, taxes would be lowered for export companies that
retain their revenues in Indonesia or convert foreign
exchange income to rupee. But barriers to hiring foreign
labor remained, and plans for promised infrastructure
investments at new ports and power plants appeared to be
stuck in the mills of the bureaucracy. The Asian Development
Bank estimated that only a tenth of the funding for
infrastructure projects was paid out during the first half
of the year, something the government intended to change.
Indonesia announced in September that the country will
again join the OPEC oil cartel. The country went out of the
cartel in 2009 when high oil prices, rising domestic demand
and low in-house production made it a net importer.
Widodo visited the United States in October, one year
after taking office. Following talks with President Barack
Obama, he said Indonesia would join the new Trans-Pacific
Partnership (TPP) free trade agreement signed between twelve
Pacific countries. Widodo risks stirring up protectionist
interests at home.
However, Widodo was forced to shorten its US visit as a
result of extensive forest fires that created problems in
relations with neighboring countries. The suffocating smoke
caused death and tens of thousands of people suffered from
respiratory distress. Schools were closed and air traffic in
the region was also disrupted. According to the US Space
Agency's NASA satellite data, more than 100,000 fires have
raged since August. Nearly 22,000 soldiers were deployed to
fight the fires and the country received assistance from
Japan, Singapore, Malaysia and Australia.
The annually recurring fires in which forests in Sumatra
and Borneo are mainly burned to clear land for agriculture,
oil palm plantations and pulpwood were the worst in two
decades. Drought caused by El Niņo weather phenomenon and
severe fires in underlying peatlands exacerbated the
The country's carbon dioxide emissions were increased and
were periodically higher than the US and China's. Seven
people linked to various forest companies were arrested in
September for suspected environmental crimes in connection
with the arson fires.
Indonesia was also criticized for having carried out a
series of death sentences during the year, despite protests
from the UN and affected countries such as Australia, Brazil
and the Netherlands. Most of the executed had been convicted
of drug offenses.
Concerns were expressed that Widodo had not done more to
ensure the religious freedom of minorities, for example,
several churches were burned and demolished in the province
of Aceh in October. The churches were not said to have been
licensed. Several thousands of Christians fled. Gay and
transgender people were also persecuted in Aceh, where
sharia laws prevail.
Indonesia and Malaysia agreed in May to temporarily
provide protection for thousands of boat refugees from
Burma's Muslim minority population Rohingya.
When in May, Widodo visited the eastern part of Papua, he
promised relief for foreign visitors, including journalists,
to visit the area. He pardoned five Papuan political
prisoners, but the human rights group Amnesty International
stated that dozens are still incarcerated. Similarly,
journalists continued to be monitored during reporting trips
to Papua. During the year, clashes occurred between security
forces and rebels from separatist OPM (Organization for a
In April, the army and police launched a joint effort to
track alleged supporters of the Islamic State (IS) terror
group on Sulawesi. Indonesia also signed cooperation
agreements with, among others, Australia and the United
Kingdom to fight Islamist groups.