Tourism Industry In Indonesia Politics Essay

23 Mar 2015

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Unity in Diversity, is the national motto of Indonesia, is a term that strikes deep into the heart of this dynamic and attractive Southeast Asian nation. Few places offer such cultural variety and geographical complexity as Indonesia, and no two journeys here are ever alike.

Location, Geography and Climate

Indonesia is composed of seventeen thousand islands that stretch over five thousand miles along the equator. The Malay Peninsula and Indochina are situated to the north-west, and the continent of Australia lies due south. Northward lie the Philippines and Micronesia.

The world's largest archipelago, Indonesia's constellation of islands straddles the divide between the Asian and Australian continental plates. As a result, the islands offer a stunning variety of topographies and ecologies Mist-shrouded volcanoes and mountains, unexplored rain forests, thousands of miles of beaches, and endless offshore reefs support a dazzling abundance of wildlife, making Indonesia an ideal destination for adventure and eco-travel.

The great majority of the country's constituent islands are of negligible size, but it does hold--wholly or in part--several islands that are enormous. These include Sumatra, Kalimantan (formerly Borneo, and shared with Malaysia), Sulawesi, and Java. The Indonesian state of Irian Jaya occupies the western half of New Guinea, which is the world's second largest island (behind Greenland). The most populous of the Indonesian islands by far is Java, home to the sprawling capital city of Jakarta. Other notable islands include the exotic, popular resort island of Bali, Lombok, Catholic Flores, and Komodo, home of dragons. http://www.geographia.com/indonesia/indo2.jpg

There are two discernible seasons in Indonesia: the dry season, which extends from June to October, and the rainy season, which lasts from November to March. Both are hot. The coastal regions, however, are often cool, and in the mountains the air is often chilly.

Overview of the country

Indonesia is one of the largest countries in south-east Asia, between the Indian ocean and the pacific ocean which contain mainly mountainous and covered with rain forests, swamps and consists over 13000 islands. Jakarta is the capital of Indonesia. Jakarta, capital of Indonesia and the country's largest commercial center. Indonesia declared its independence on 17th august 1945 from Japan but Netherlands agreed to transfer sovereignty in 1949. Susilo Bambang is the president and Muhammad Yusuf kalla is the vice-president of Indonesia. Bahasa is the official language in Indonesia which is modified form of Malay but the most widely spoken language is Javanese. 88% of Indonesians populations are Muslim. It has a very large trading environment, with several countries ranging in products from gas to textiles. 22% of its populations lived below poverty line.

Flag of Indonesia:-

http://8bahasa-indonesia-ccc.wikispaces.com/file/view/indonesia_flag.jpg/307489752/351x227/indonesia_flag.jpg

Demographic profile of Indonesia

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According to the 2010 national census, the population of Indonesia 237.6 million, with high population growth at 1.9%. 58% of the population lives on java, the world's most populous island. Despite a fairly effective family planning program that has been in place since the 1960's, population is expected to grow to around 265 million by 2020 and 306 million by 2050.

There are around 300 native ethnic group in Indonesia, and 742 different languages and dialects. Most of Indonesians are descended from Austronesia- speaking people whose languages can be traced to proto-Austronesia (PAN), which possibly originated in Taiwan. Another major grouping is Melanesians, who inhabit eastern Indonesia. The largest ethnic group is the Javanese, who comprise 42% of the population, and are politically and culturally dominant. The Sudanese, ethnic Malays, and Madurese are the largest non-Javanese groups. A sense of Indonesian nationhood exists alongside strong regional identities. Society is largely harmonious, although social, religious and ethnic tensions have triggered horrendous violence. Chinese Indonesians are an influential ethnic minority comprising 3-4% of the population. Much of the country's privately owned commerce and wealth is Chinese-Indonesian-controlled, which has contributed to considerable resentment, and even anti-Chinese violence.

The official national language is Indonesian, a form of Malay. It is based on the prestige dialect of Malay, that of the Johor-Riau Sultanate, which for centuries had been the lingua franca of the archipelago, standards of which are the official languages in Singapore, Malaysia and Brunei. Indonesian is universally taught in schools; consequently it is spoken by nearly every Indonesian. It is the language of business, politics, national media, education, and academia. It was promoted by Indonesian nationalists in the 1920s, and declared the official language under the name Bahasa Indonesia on the proclamation of independence in 1945. Most Indonesians speak at least one of the several hundred local languages and dialects, often as their first language. Of these, Javanese is the most widely spoken as the language of the largest ethnic group. On the other hand, Papua has over 270 indigenous Papuan and Austronesia languages, in a region of about 2.7 million people.

While religious freedom is stipulated in the Indonesian constitution, the government officially recognizes only six religions: Islam, Protestantism, Roman Catholicism, Hinduism, Buddhism, and Confucianism. Although it is not an Islamic state, Indonesia is the world's most populous Muslim-majority nation, with 86.1% of Indonesians being Muslim according to the 2000 census. On 21 May 2011 the Indonesian Sunni-Shia Council (MUHSIN) was established. The council aims to hold gatherings, dialogues and social activities. It was an answer to violence committed in the name of religion. The majority of Muslims in Indonesia are Sunni. 9% of the population was Christian, 3% Hindu, and 2% Buddhist or other. Most Indonesian Hindus are Balinese, and most Buddhists in modern-day Indonesia are ethnic Chinese. Though now minority religions, Hinduism and Buddhism remain defining influences in Indonesian culture. Islam was first adopted by Indonesians in northern Sumatra in the 13th century, through the influence of traders, and became the country's dominant religion by the 16th century. Roman Catholicism was brought to Indonesia by early Portuguese colonialists and missionaries, and the Protestant denominations are largely a result of Dutch Calvinist and Lutheran missionary efforts during the country's colonial period. A large proportion of Indonesians-such as the Javanese abangan, Balinese Hindus, and Dayak Christians-practice a less orthodox, syncretic form of their religion, which draws on local customs and beliefs.

ECONOMIC OVERVIEW OF INDONESIA

Indonesia has a mixed economy in which both the private sector and government play significant roles. The country is the largest economy in Southeast Asia and a member of the G-20 major economies. Indonesia's estimated gross domestic product (nominal), as of 2010 was US$706.73 billion with estimated nominal per capita GDP was US$3,015, and per capita GDP PPP was US$4,394 (international dollars). June 2011: At World Economic Forum on East Asia, Indonesian president said Indonesia will be in the top ten countries with the strongest economy within the next decade. The Gross domestic product (GDP) is about $1 trillion and the debt ratio to the GDP is 26%.[ The industry sector is the economy's largest and accounts for 46.4% of GDP (2010), this is followed by services (37.1%) and agriculture (16.5%). However, since 2010, the service sector has employed more people than other sectors, accounting for 48.9% of the total labor force; this has been followed by agriculture (38.3%) and industry (12.8%).[ Agriculture, however, had been the country's largest employer for centuries

Indonesia, a vast polyglot nation, grew an estimated 6.1% and 6.4% in 2010 and 2011, respectively. The government made economic advances under the first administration of President YUDHOYONO (2004-09), introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in 2009. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, a small current account surplus, a fiscal deficit below 2%, and historically low rates of inflation. Fitch and Moody's upgraded Indonesia's credit rating to investment grade in December 2011. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2012 faces the ongoing challenge of improving Indonesia's insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of rising oil prices.

GDP (official exchange rate):

$832.9 billion (2011 est.)

GDP - real growth rate:

6.5% (2011 est.)

country comparison to the world: 39

6.2% (2010 est.)

4.6% (2009 est.)

GDP - per capita (PPP):

$4,700 (2011 est.)

country comparison to the world: 157

$4,400 (2010 est.)

$4,200 (2009 est.)

note: data are in 2011 US dollars

GDP - composition by sector:

Agriculture: 14.7%

Industry: 47.2%

Services: 38.1% (2011 est.)

Industrial production growth rate:

4.1% (2011 est.)

country comparison to the world: 78

CURRENCY

c

OVERVIEW OF

INDUSTRIES, TRADE AND COMMERCE

The industries in Indonesia are classified as follows:

Agriculture: With 42.1% of the total labor force engaged in agriculture, Indonesia can be rightly considered an agrarian economy. The sector contributed 14.4% to the country's GDP in 2009. In 2006, the country yielded food crops worth 213,529,700 million rupiahs, which was 35% more than the 2003 level. Rice and coffee remains the major producer of the country, making it the world's fourth biggest producer of these products.

Textile and Apparel: The textile and apparel manufacturing industry of Indonesia ranks 14th in the world. In 2008, the value added by textiles and clothing manufacturing dropped to 1.2%. Industry was hard hit by the global recession of the late 2000s. Around 155 textile production companies went bankrupt in 2009 due to an increase in the cost of production and enormous inflow of cheap stuff from China

Mining: The fall in commodity prices in 2009, due to the global economic downturn, resulted in several major mining companies putting their investment plans on hold. However, the mining industry is expected to reach US$123 billion by 2014, with yearly growth of 10%-11% from 2010 onwards. Increase in international interest can be seen in the Indonesian coal sector, after the significant number of deals that took place in the last quarter of 2009.

Tourism: Tourism is among the biggest economy boosters in Indonesia. This is apparent in the fact that 6.45 million visitors came to the country in 2009, despite of hotel bombings in Jakarta. Tourism contributes 3% to the GDP of the country. The tourism growth plan for 2010 aims at 7 million foreign tourists. However, this is much lower than that of its tiny neighbor Singapore, which was visited by 9.5 million people in 2009.

Other Industries:

Petroleum and natural gas, footwear, cement, chemical fertilizers, plywood, food, etc.

ECONOMIC SECTORS

On 25 January 2011, after talks by Indian Prime Minister Manmohan Singh and visiting President of Indonesia Susilo Bambang Yudhoyuno, India and Indonesia had signed business deals worth billions of dollars and set an ambitious target of doubling trade over the next five years. Tourism wise, Indonesia is one of only 14 countries in which tourist visas prior to entry are not required in India. Indian Nationals also are issued tourist visas on arrival in Indonesia.

India also has further economic ties with Indonesia through its free trade agreement with ASEAN, of which Indonesia is a member.

President of Indonesia Sukarno was the first chief guest at the annual Republic day parade of India. In the year 2011 too, President Susilo Bambang Yudhoyuno was the chief guest for the same.

In 1998, agriculture accounted for 19.5 percent of Indonesia's total GDP, industry for 45.3 percent, and services for 35.2 percent, a quite different scenario than in decades past. For the first 20 years after independence in 1945, the agricultural sector contributed more than 50 percent of the nation's GDP from independence. There was little development of industry, and production per capita was no more than it had been when Indonesia was a Dutch colony. From 1965-74 there were few major industrial projects due to the still weak economy and a strategy of import substitution, which created more jobs.

In the early 1970s the Organization of the Petroleum Exporting Countries (OPEC) raised oil prices, greatly increasing Indonesia's export income. Indonesia used this windfall, as well as profits from high prices for tropical agricultural products in the 1970s, to build heavy industries, such as steel, and advanced technologies, such as aeronautics. By the 1980s this industrialization process allowed growing industries such as steel, aluminum, and cement production to reduce the dependence of the economy on agriculture.

These industries, especially the high-tech ones, met with only mixed success, and none of them generated the significant employment required by such a populous country. Agriculture and natural resources were still important to the economy, and Indonesia's economy was vulnerable to frequent changes in the prices of these commodities, as well as of oil and gas. Oil earnings dropped in 1982-83 from US$18.825 billion to US$14.744 billion and kept falling over the next 2 years. Non-oil exports grew but not enough to make up for the fall in earnings. As Indonesia's balance of payments became negative, the World Bank pushed Indonesia to open its markets, and beginning in the mid-1980s the government initiated reforms to boost manufactured exports in order to strengthen the economy. These measures included a currency de-valuation to help make exports competitive, export incentives, the relaxation of rules on foreign investment and trade, and an end to some monopolies, such as plastics

OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL

Indonesia carries exports and imports at an international level as well.

Indonesia Exports: Commodities-Oil & gas, Plywood, Textiles, Rubber, Electrical appliances, etc.

Indonesia Imports: Commodities-Machinery and equipment, Chemicals, Fuels, Foodstuffs, etc.

FDI rules in Indonesia allow 100% FDI investment in selected areas of business only. It limits foreign direct investment to 95%, with a minimum of 5% ownership by an Indonesian. It allows FDI investment with certain conditions that stipulates the sectors which are closed to FDI investment.

Trade

TRADE & INVESTMENT COMPLEMENTARITIES

India & Indonesia bilateral trade is at least two millennia old. In the ancient past, the two nations used to trade in spices, timbers, minerals, precious stones, cotton & silk.

In present, trade ties have not realized their true potential which can be attributed to the lack of imaginative. Planning as well as ignorance on the part of the business communities of the two countries.

Now India and Indonesia are increasingly seen as emerging Asian economies. trade and investment complementary need to be comprehensively explored.

As a result of the continued growth of India's economic transaction with the ASEAN from 1970 onwards, the amount of trade grew in volume. By 1982 the ASEAN countries shared India's export which had been 2.6 percent in 1970 had risen to 4.2 % .During the same period India's total imports from the region had risen.

PRESENT TRADE RELATIONS OF INDIA AND INDONESIA

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Today, both the countries maintain cooperative and friendly relations. India and Indonesia are two of the few democracies in Asian region which can be projected as a real democracy. As fellow Asian democracies that share common values, it is natural for both countries to nurture and foster strategic alliance. Indonesia and India are member states of the G-20, the E7 (countries), the Non-aligned Movement, and the United Nations.

With an expanding economy and increasingly favorable investment climate, Indonesia stands as a key economic entity in the ASEAN region. Its abundance of natural resources and a flourishing manufacturing sector have ensured a successful relationship with the booming Indian economy in areas of trade and investment.

Though trade relations were formalized with the signing of a Trade Agreement in 1978, there was an absence of a forum for periodic talks between the two countries. The bilateral effort was revitalized with the first ever India-Indonesia Joint Commission Meeting (JCM) held in Yogyakarta in September 2003. The meeting resulted in the formation of an India-Indonesia Expert Working group with the primary objective of enhancing and diversifying bilateral trade and investment relations. So far, the JCM has met thrice with the most recent meeting in 2007, producing a comprehensive "Plan of Action" in areas comprising trade, infrastructure, and investment. This underlines the increasing political support for the bilateral process which would provide the much-needed political impetus to deepen economic relations between the two countries.

Indonesia is presently India's second-largest export market in ASEAN (second only to Singapore). India mainly exports refined petroleum products, oil seeds, chemicals and iron and steel products to Indonesia. On the other hand, it is one of Indonesia's largest buyer's of crude oil and further, imports its mining, petroleum and paper products. In 2006, India's exports increased by 33.77 per cent to US$1.407 billion from US$1.052 billion in 2005. Imports on the other hand grew by 17.18 per cent in 2006 to US$3.39 billion from US$2.878 billion the previous year. The two countries intend to work towards a Free Trade Agreement (FTA) with an aim to boost bilateral trade to US$10 billion by 2010.

In the area of investment, there are more than twenty major Indian manufacturing joint ventures in Indonesia. Majority of these investments were undertaken in the 1970s and 80s mainly in textiles, synthetic fiber and steel industries with India being among the top 5 investors in Indonesia up to 1985. Major Indian companies that established themselves in this phase included, the Lohia Group (Indorama Synthetics), Ispat Group (Indo Ispat), Aditya Birla Group (having four units in textiles and yarns) and Tolaram Group among others.

The recent upturn in the Indonesian economy and the accompanying political change has encouraged a greater emphasis on investments in new industries. There has been a distinct shift from basic raw material industries to automobiles, infrastructure, energy, and services. TVS Motors of Chennai has invested US$45 million in a motorcycle plant near Jakarta while Bajaj Auto is converting traditional three wheelers into CNG-powered ones and launched its new two wheeler model 'Bajaj Pulsar' in the Indonesian market in November 2006. Various private entities have also made investments in areas like coal mining, plantations for bio-fuels and extraction of minerals. Along with investments in new industries, new Indian players have started making an entry into the Indonesian market. Companies like the Tata Power Company Limited and Essar Steel Limited are looking to invest in energy and steel along with public sector giants such as the National Aluminum Company Limited (NALCO), National Thermal Power Corporation (NTPC), and Rail India Technical and Economic Services Limited (RITES).

On the other hand, Indonesian investment in India is rather low and ranks 36th in the FDI inflow to India. Though there has been increasing participation by Indonesian groups especially in West Bengal, the stringent regulatory climate in India is perceived as a primary deterrent for Indonesian companies looking to invest in a big way. Limited direct flights between the two countries and restrictive visa requirements by India have further proved to be a hindrance to greater Indonesian participation in India.

Recently, the two countries have been at logger heads over differences pertaining to the India-ASEAN FTA. Indonesia has been pushing for greater access of its palm oil exports to India while India wants a reworking of the negative list put forward by Indonesia. Further, at a bilateral level, there are also issues pertaining to the Indian demand for the removal of non-tariff barriers on its exports of meat and processed foods. Though India is one of the largest exporters of halal bovine meat in the world, Indonesia continues to ban India's bovine meat and milk products on the grounds that India is not free from Foot and Mouth Disease (FMD).

Despite the mentioned issues between the two countries, there is optimism about the potential that exists for greater economic ties. With both countries facing daunting infrastructural and energy challenges, there is tremendous opportunity for investments on both sides. With opportunities and forum for cooperation in place, it is important that economic actors in both countries step up and work towards enhancing economic partnerships. Companies in both countries need to actualize potential synergies for their mutual benefit and ensure that attempts at cooperation are not restricted to inter-governmental meetings and commissions.

PESTEL ANALYSIS of Indonesia considering the TOURISM INDUSTRY:

Political analysis

Indonesia is considered as Republic country. It declared its independence on 17th August 1945 from Japan so 17thAugust is the national holiday. Indonesia is legal rules and regulations are based on Roman-Dutch law. Their constitution has abrogated by Federal Constitution in 1949and Provisional Constitution abrogated in 1950 which restored on 5 July 1959.

Political stability: In Indonesia after every five year election is being contested for president and vice president post by direct vote of the citizenry. Last time it was held on 8 July 2009 (next to be held in July 2014) Susilo Bambang has elected as president and Muhammad Yusuf Kalla is the Vice-President. Similarly, Cabinet also appointed by the president. So for next 5 years there are more chances of stability of the government.

 Indonesia is a republic with a presidential system. As a unitary state, power is concentrated in the central government. Following the resignation of President Suharto in 1998, Indonesian political and governmental structures have undergone major reforms. Four amendments to the 1945 Constitution of Indonesia have revamped the executive, judicial, and legislative branches. The president of Indonesia is the head of state, commander-in-chief of the Indonesian National Armed Forces, and the director of domestic governance, policy-making, and foreign affairs. The president appoints a council of ministers, who is not required to be elected members of the legislature. The 2004 presidential election was the first in which the people directly elected the president and vice president. The president may serve a maximum of two consecutive five-year terms.

The highest representative body at national level is the People's Consultative Assembly (MPR). Its main functions are supporting and amending the constitution, inaugurating the president, and formalizing broad outlines of state policy. It has the power to impeach the president.

The MPR comprises two houses; the People's Representative Council (DPR), with 560 members, and the Regional Representative Council (DPD), with 132 members. The DPR passes legislation and monitors the executive branch; party-aligned members are elected for five-year terms by proportional representation. Reforms since 1998 have markedly increased the DPR's role in national governance. The DPD is a new chamber for matters of regional management.

Most civil disputes appear before a State Court (Pengadilan Negeri); appeals are heard before the High Court (Pengadilan Tinggi). The Supreme Court (Mahkamah Agung) is the country's highest court, and hears final cessation appeals and conducts case reviews. Other courts include the Commercial Court, which handles bankruptcy and insolvency; a State Administrative Court (Pengadilan Tata Negara) to hear administrative law cases against the government; a Constitutional Court (Mahkamah Konstitusi) to hear disputes concerning legality of law, general elections, dissolution of political parties, and the scope of authority of state institutions; and a Religious Court (Pengadilan Agama) to deal with codified Sharia Law cases

Political scenario will play a pivotal role in defining the flourishing of tourism in Indonesia. If there are less political conflicts then tourists all over the world will feel safe in travelling. Even after the starting of the business in Indonesia it becomes a duty to maintain the safety and health of the travelers especially those travelling through road and rail.

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ECONOMIC ANALYSIS

Indonesia has a mixed economy in which both the private sector and government play significant roles. The country is the largest economy in Southeast Asia and a member of the economies. Indonesia's estimated gross domestic product (nominal), as of 2010 was US$706.73 billion with estimated nominal per capita GDP was US$3,015, and per capita GDP PPP was US$4,394 (international dollars).June 2011: At World Economic Forum on East Asia, Indonesian president said Indonesia will be in the top ten countries with the strongest economy within the next decade. The Gross domestic product (GDP) is about $1 trillion and the debt ratio to the GDP is 26%.[ The industry sector is the economy's largest and accounts for 46.4% of GDP (2010), this is followed by services (37.1%) and agriculture (16.5%). However, since 2010, the service sector has employed more people than other sectors, accounting for 48.9% of the total labor force, this has been followed by agriculture (38.3%) and industry (12.8%).Agriculture, however, had been the country's largest employer for centuries.

According to World Trade Organization data, Indonesia was the 27th biggest exporting country in the world in 2010, moving up three places from a year before. Indonesia's main export markets (2009) are Japan (17.28%), Singapore (11.29%), the United States (10.81%), and China (7.62%). The major suppliers of imports to Indonesia are Singapore (24.96%), China (12.52%), and Japan (8.92%). In 2005, Indonesia ran a trade surplus with export revenues of US$83.64 billion and import expenditure of US$62.02 billion. The country has extensive natural resources, including crude oil, natural gas, tin, copper, and gold. Indonesia's major imports include machinery and equipment, chemicals, fuels, and foodstuffs. And the country's major export commodities include oil and gas, electrical appliances, plywood, rubber, and textiles.

Prime lending rate: If we talk about their commercial Bank prime lending interest rate it is quiet decent which is 6.41% and their Central bank discount rate is 10.83%. (CIA, 2009)

 Business or individual tax system:

Tax system has various rules and categories for example on first 25,000,000 income rate of tax is 10% then on next 25,000,000 it is 15% and on next 50,000,000 it is 30%. In the same way Income Tax on interest from Indonesian banks is fixed at a final 15% for both companies and individuals

SOCIO-CULTURAL ANALYSIS

Indonesia has about 300 ethnic groups, each with cultural identities developed over centuries, and influenced by Indian, Arabic, Chinese, and European sources. Traditional Javanese and Balinese dances, for example, contain aspects of Hindu culture and mythology, as do wayang kulit (shadow puppet) performances. Textiles such as batik, ikat, ulos and songket are created across Indonesia in styles that vary by region. The most dominant influences on Indonesian architecture have traditionally been Indian; however, Chinese, Arab, and European architectural influences have been significant.

Sports in Indonesia are generally male-orientated and spectator sports are often associated with illegal gambling. The most popular sports are badminton and football. Indonesian players have won the Thomas Cup (the world team championship of men's badminton) thirteen of the twenty-six times that it has been held since 1949, as well as numerous Olympic medals since the sport gained full Olympic status in 1992. Its women have won the Uber Cup, the female equivalent of the Thomas Cup, twice, in 1994 and 1996. Liga Indonesia is the country's premier football club league. Traditional sports include sepak takraw, and bull racing in Madura. In areas with a history of tribal warfare, mock fighting contests are held, such as, caci in Flores, and pasola in Sumba. Pencak Silat is an Indonesian martial art.

Indonesian cuisine varies by region and is based on Chinese, European, Middle Eastern, and Indian precedents. Rice is the main staple food and is served with side dishes of meat and vegetables. Spices (notably chili), coconut milk, fish and chicken are fundamental ingredients. Indonesian traditional music includes gamelan and keroncong. The Indonesian film industry's popularity peaked in the 1980s and dominated cinemas in Indonesia, although it declined significantly in the early 1990s. Between 2000 and 2005, the number of Indonesian films released each year has steadily increased.

The oldest evidence of writing in Indonesia is a series of Sanskrit inscriptions dated to the 5th century. Important figures in modern Indonesian literature include: Dutch author Multatuli, who criticized treatment of the Indonesians under Dutch colonial rule; Sumatrans Muhammad Yamin and Hamka, who were influential pre-independence nationalist writers and politicians; and proletarian writer Pramoedya Ananta Toer, Indonesia's most famous novelist. Many of Indonesia's peoples have strongly rooted oral traditions, which help to define and preserve their cultural identities.

Media freedom in Indonesia increased considerably after the end of President Suharto's rule, during which the now-defunct Ministry of Information monitored and controlled domestic media, and restricted foreign media. The TV market includes ten national commercial networks, and provincial networks that compete with public TVRI. Private radio stations carry their own news bulletins and foreign broadcasters supply programs. At a reported 25 million users in 2008, Internet usage was estimated at 12.5% in September 2009.More than 30 million cell phones are sold in Indonesia each year, and 27 percent of them are local brands. This has formed the lifestyle of the people in Indonesia.

While starting a tourism business in Indonesia the attractions of the place need to be identified first. Tourists all over the world are attracted by the culture, the social life, cuisine, beautiful sights and history. This rich socio-cultural of the country will prove to be a boon for the travel business.

TECHNOLOGICAL ANALYSIS

Technically Indonesia has highly advanced and modern background. There is an availability of world class facilities throughout the country especially in the metro cities .

The technological has been highlighted in the following:

Communication facilities are easily accessible within and outside of the country. This includes telephones (main line and cellular) having domestic as well as international coverage.

Domestic: coverage provided by existing network has been expanded by use of over 200,000 telephone kiosks many located in remote areas; mobile-cellular subscribership growing rapidly

International: country code - 62; landing point for both the SEA-ME-WE-3 and SEA-ME-WE-4 submarine cable networks that provide links throughout Asia, the Middle East, and Europe; satellite earth stations - 2 Intelsat (1 Indian Ocean and 1 Pacific Ocean)

Broadcast media is also highly active where there is a mixture of about a dozen national TV networks - 2 public broadcasters, the remainder private broadcasters - each with multiple transmitters; more than 100 local TV stations; widespread use of satellite and cable TV systems; public radio broadcaster operates 6 national networks as well as regional and local stations; overall, more than 700 radio stations with more than 650 privately-operated.

Internet hosts and users are also high in number which has led to computerization in the transactions.

As the industry selected is that of the tourism the need for transportation cannot be neglected and that to air transport.

Airports - with paved runways:

Total: 185

Over 3,047 m: 4

2,438 to 3,047 m: 22

1,524 to 2,437 m: 51

914 to 1,523 m: 71

under 914 m: 37 (2012)

Airports - with unpaved runways:

total: 491

1,524 to 2,437 m: 5

914 to 1,523 m: 24

under 914 m: 462 (2012)

Heliports:

76 (2012)

Pipelines:

condensate 812 km; condensate/gas 73 km; gas 7,165 km; oil 5,984 km; oil/gas/water 12 km; refined products 617 km; water 44 km (2010)

Railways:

total: 5,042 km

country comparison to the world: 35

narrow gauge: 5,042 km 1.067-m gauge (565 km electrified) (2008)

Roadways:

total: 437,759 km

country comparison to the world: 14

paved: 258,744 km

unpaved: 179,015 km (2008)

Waterways:

21,579 km (2011)

country comparison to the world: 6

ECOLOGICAL ANALYSIS

Indonesia's size, tropical climate, and archipelagic geography, support the world's second highest level of biodiversity (after Brazil), and its flora and fauna is a mixture of Asian and Australasian species. The islands of the Sunda Shelf (Sumatra, Java, Borneo, and Bali) were once linked to the Asian mainland, and have a wealth of Asian fauna. Large species such as the tiger, rhinoceros, orangutan, elephant, and leopard, were once abundant as Far East as Bali, but numbers and distribution have dwindled drastically. Forests cover approximately 60% of the country. In Sumatra and Kalimantan; these are predominantly of Asian species. However, the forests of the smaller, and more densely populated Java, have largely been removed for human habitation and agriculture. Sulawesi, Nusa Tenggara, and Maluku-having been long separated from the continental landmasses-have developed their own unique flora and fauna. Papua was part of the Australian landmass, and is home to a unique fauna and flora closely related to that of Australia, including over 600 bird species.

Indonesia is second only to Australia in terms of total endemic species, with 36% of its 1,531 species of bird and 39% of its 515 species of mammal being endemic. Indonesia's 80,000 kilometers (50,000 mi) of coastline are surrounded by tropical seas that contribute to the country's high level of biodiversity. Indonesia has a range of sea and coastal ecosystems, including beaches, sand dunes, estuaries, mangroves, coral reefs, sea grass beds, coastal mudflats, tidal flats, algal beds, and small island ecosystems. Indonesia is one of Coral Triangle countries with the world's greatest diversity of coral reef fish with more than 1,650 species in eastern Indonesia only. The British naturalist, Alfred Wallace, described a dividing line between the distribution and peace of Indonesia's Asian and Australasian species. Known as the Wallace Line, it runs roughly north-south along the edge of the Sunda Shelf, between Kalimantan and Sulawesi, and along the deep Lombok Strait, between Lombok and Bali. West of the line the flora and fauna are more Asian; moving east from Lombok, they are increasingly Australian. In his 1869 book, The Malay Archipelago, Wallace described numerous species unique to the area. The region of islands between his line and New Guinea is now termed Wallacea.

Indonesia's high population and rapid industrialization present serious environmental issues, which are often given a lower priority due to high poverty levels and weak, under-resourced governance. Issues include large-scale deforestation (much of it illegal) and related wildfires causing heavy smog over parts of western Indonesia, Malaysia and Singapore; over-exploitation of marine resources; and environmental problems associated with rapid urbanization and economic development, including air pollution, traffic congestion, garbage management, and reliable water and waste water services. Deforestation and the destruction of peat lands make Indonesia the world's third largest emitter of greenhouse gases. Habitat destruction threatens the survival of indigenous and endemic species, including 140 species of mammals identified by the World Conservation Union (IUCN) as threatened, and 15 identified as critically endangered, including Bali Starling, Sumatran Orangutan, and Javan Rhinoceros. Much of Indonesia's deforestation is caused by forest clearing for the palm oil Industry, which has cleared 18 million hectares of forest for palm oil expansion. Palm oil expansion requires land reallocation as well as changes to the local and natural ecosystems. Palm oil expansion can generate wealth for local communities if done right. If down wrong it can degrade ecosystems and cause social conflicts.

Indonesia's location on the edges of the Pacific, Eurasian, and Australian tectonic plates makes it the site of numerous volcanoes and frequent earthquakes. Indonesia has at least 150 active volcanoes,[92] including Krakatoa and Tambora, both famous for their devastating eruptions in the 19th century. The eruption of the Toba supervolcano, approximately 70,000 years ago, was one of the largest eruptions ever, and a global catastrophe.

Natural hazards:

Occasional floods; severe droughts; tsunamis; earthquakes; volcanoes; forest fires.

Volcanism: Indonesia contains the most volcanoes of any country in the world - some 76 are historically active; significant volcanic activity occurs on Java, western Sumatra, the Sunda Islands, Halmahera Island, Sulawesi Island, Sangihe Island, and in the Banda Sea; Merapi (elev. 2,968 m), Indonesia's most active volcano and in eruption since 2010, has been deemed a "Decade Volcano" by the International Association of Volcanology and Chemistry of the Earth's Interior, worthy of study due to its explosive history and close proximity to human populations; other notable historically active volcanoes include Agung, Awu, Karangetang, Krakatau (Krakatoa), Makian, Raung, and Tambora

Environmental issues

Deforestation, water pollution from industrial wastes, sewage, air pollution in urban areas, smoke and haze from forest fires are the major issues.

LEGAL ANALYSIS

Civil law system based on the Roman-Dutch model and influenced by customary law is in practice in Indonesia.

Labour laws:

Indonesia has one of the largest labour forces in the world which make it stand on5thrank. So, to protect the labour rights the government has made a law called Labour laws Article 28D (2). According to this law 7-hour workdays and 40-hour workweeks, with one 30-minute rest period for each 4 hours of work is legal in Indonesia. One day of rest weekly also mandatory in Indonesia. In April 1992, the Government of Indonesia signed a Memorandum of Understanding with the International Labour Organization under the International Program for the Elimination of Child Labour (IPEC) where the minimum working age is 14 years. (Labour &Social Protection in Indonesia, 2009)

Labour force - by occupation:

Agriculture: 42.1%Industry: 18.6%Services: 39.3%

Company law:

The Indonesian Company Law of 1995 is the most important framework for the current legislation on corporate governance in Indonesia. Under the Company Law, a company is a separate legal entity in which Directors and Commissioners represent the company. Every company must register their Memorandum of Act under this Company Law. (Incorporation of company Law in Indonesia)

Environmental law:

Indonesia Environmental Agency states Decree Laws. For instance, Municipal Noise Reduction Plan (MNRP) has noise limit such areas in housing occupancy, hospitals, schools, and religious buildings (Inter Noise, 2007).



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