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While roughly 89% of the country’s citizens subscribe to Islamic beliefs, according to official government statistics, the country prides itself on its tolerance and diversity. There are six officially recognised religions in Indonesia according to the constitution, which guarantees the rights of citizens to practice their religion freely. The Ministry of Religious Affairs (MoRA) oversees not just issues relating to the majority religion of Islam, but of all officially recognised religions. For example, MoRA oversees religious schools, over 97.7% of which are madrassas and other Islamic learning facilities. This chapter contains an interview with Suryadharma Ali, Minister of Religious Affairs.

Having already mandated basic education and made it accessible to all citizens, at least in theory, Indonesia’s next challenge is to boost access to, and quality of, secondary and higher education. Other goals include lowering illiteracy and decreasing disparities in quality of education nationwide. The government is hoping to address challenges like teacher absenteeism, and poor scientific and mathematical literacy, in which Indonesia ranked 50th out of 57 countries in international PISA testing. Indonesia’s health care indicators have improved gradually over the past decade, with reduced infant mortality and increased life expectancy. The decentralisation of the health care system has aided this process somewhat, helping halve the maternal death rate. New lifestyle illnesses derived from the increasing prevalence of calorie-rich Western diets are posing a new threat. In 2004, the government pledged to provide all citizens with universal health insurance, under a Ministry of Health scheme due to be completed by 2014. This chapter includes interviews with Ir Ciputra, Founder and Chairman, Ciputra Group; and Dr Endang Rahayu Sedyaningsih, Minister of Health.

Already known worldwide for the hugely popular island destination of Bali, Indonesia has been trying to market its full range of opportunities. At the same time, the country is hoping to build its profile as a business travel venue, a policy helped along by ongoing economic growth. 2011 tourist arrivals were up 7.5% year-on-year for the January-July period, well on their way to meeting the government’s target of 7.7m. The government is keen to promote the meetings, incentives, conventions, and exhibitions sector, with conference facilities being developed in Lombok and Jogjakarta. Finally, it’s looking to draw visitors beyond conventional destinations, highlighting islands like Lombok, which has direct ferry connections to Bali. This section features an interview with I Made Mangku Pastika, Governor of Bali.

Long a major exporter of raw natural resources, including agricultural products, Indonesia is looking to maintain its strengths in this sector while expanding downstream industries to fuel domestic industry. The country imports over 20m tonnes of food annually, but major investment plans are designed to mitigate the need for imports by boosting domestic output. Indonesia’s strengths are manifested in its palm oil sector, which was forecast to produce 23.5m tonnes for 2011, a world-leading total. One controversy arose in 2011 when the export tax on refined palm oil was decreased to nearly half that of CPO, which should boost downstream processing but may eat into upstream profits. This section features an interview with Franky Widjaja, Vice-Chairman for Agribusiness, Food and Livestock, Indonesian Chamber of Commerce and Industry (KADIN).

Much of Indonesia’s construction sector is awaiting the unveiling of major infrastructure projects that will be necessary to unlock the high growth potential of the domestic market. The government has pledged to spend $150bn on infrastructure projects over five years in its 2011 budget, but sector figures are looking to see results, not just promises. The industry grew at 5.3% in Q1 2011, representing a slowdown from 2009, which reinforces uncertainties about material costs, legal issues, and bureaucracy-related project delays. Real estate, meanwhile, has a bright future, highlighted by surging demand and good value but undercut by potential bureaucratic bottlenecks. Interest rates have fallen below the 10% level, offering a record number of Indonesians the chance to buy their own home. Developers have not yet shown much interest in building low-cost housing, which is still the largest source of demand, primarily because margins are low. Reforms that would help the sector include more support for low-income housing, as well as a potential loosening of laws that currently restrict foreigners from buying real estate in Indonesia. This chapter includes interviews with Muktar Widjaja, Chairman, Sinarmas Land; and Trihatma K Haliman, President Director and CEO, Agung Podomoro Land.

With estimates that only about half of Indonesia’s 240m people use a mobile phone, there is great potential for growth. The three main players in the mobile segment have engaged in a price war since 2007 as voice costs have dropped precipitously, although forecasts expect them to grow on the strength of new subscribers. Future revenue growth will also rely on data and value-added services. These trends will be enhanced by the adoption of smartphones, which are out of reach cost-wise for most Indonesians at the moment, but an influx of cheaper Chinese phones should begin to bridge this gap. Meanwhile, low computer penetration is the primary issue facing the IT sector. Ownership grew from just 4% in 2006 to 8% in 2008, and the percent of the population with “access” to a computer is 20% at most. Providing access across the country will be especially challenging with Indonesia’s geography. Given physical and economic constraints, then, the government is placing its tech bet on the growth of mobile phones, to which far more people have access. E-government is also an emerging trend, and the state has adopted online systems for tasks such as procurement. This chapter features interviews with Rinaldi Firmansyah, President Director, Telkom; and a roundtable with Erik Aas, President Director & CEO, Axis; Hary Sasongko, President Director, Indosat; Sarwoto Atmosutarno, President Director, Telkomsel; and Hasnul Suhaimi, President Director, XL.