III.Introduction
Indonesia is geographically located in the Southeast Asia region. It is a rich
archipelago consisting of 5 large islands and 13,677 smaller islands, with total area
of 741,100 sq. mi making it one of the largest Asian countries after China, India, and
Saudi Arabia. The principal islands consist of Sumatra, Java, Kalimantan, Sulawesi,
and Irian Jaya (a portion of the island of Papua New Guinea). The current population
of Indonesia is currently sitting at 257 Million people in 2015 (Exhibit 1.1), it is
known to be one of the largest Muslim populated countries and the third largest
democracy country after India and USA.
Indonesia is a rich country with vast amount of resources such as, palm oil, crude
oil, natural gas, tin, copper, timber, gold, rubber, and cement. These raw materials
are the most common commodities traded worldwide. Hence, the size of the
economy, GDP at Constant LCU is estimated to be $868.04 billion in 2015 (Exhibit
1.3), GDP at Current LCU $675.20 Billion (Exhibit 1.4), GDP per capita grows 3.53%
annually in 2015 (Exhibit 1.5), and GDP annual growth is 4.79% (Exhibit 1.6).
Despite having such an abundance of natural wealth, it is deeply entrenched in, like
many other developing nations, issues such as poverty and corruption. The poverty
headcount ratio at $1.90 a day is stated to be 13.58 in 2011 (Exhibit 1.7).
Indonesia’s living standards most swiftly are determined through its Purchasing
Power Parity. Currently Indonesia’s GDP per capita, PPP is at $11,057.56 (Exhibit
1.8), which is significantly lower than its neighboring countries of Malaysia and
Thailand,. The primary cause of income inequality in Indonesia is due to pervasive
and extensive corruption. The fight against corruption in Indonesia has been
ineffective in the past due to the leniency of the penalty and inadequate statistical