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Overview of Indonesia and its Economyretired army general, Susilo Bambang Yudhoyono (SBY), was elected President. Jusuf Kalla (JK) fromGolkar was elected Vice President.1.4 System of governmentIndonesia is a republic with a presidential system. Being a unitary state, executive power resides with thecentral government. Since 2001 new laws on regional autonomy have been introduced to promotedecentralisation, as requested by provincial administrations.As head of state, the President of Indonesia also serves as the commander-in-chief of the Indonesianarmed forces and is responsible for domestic governance, policy-making and foreign affairs. He issupported by the Vice President and a council of Ministers. The President is elected for a maximumof two consecutive five-year periods.On the legislative front, the People’s Consultative Assembly (MPR or Majelis Permusyawaratan Rakyat)stands as the highest representative body at the national level. Its main roles include supporting andamending the constitution, inauguration of the President and the setting of broad outlines of state policy(GBHN or Garis-garis Besar Haluan Negara). MPR contains two lower Houses of Representatives—thePeople’s Representative Council (DPR or Dewan Perwakilan Rakyat) and the Regional RepresentativesCouncil (DPD or Dewan Perwakilan Daerah).The DPR is the legislative institution which passes state laws and monitors the executive body (i.e. thegovernment). Members of the DPR are elected for five year terms and selection is based on proportionaterepresentation of more than two thousand electoral districts.The Indonesian judicial system comprises a hierarchical system of courts, the highest being the SupremeCourt. Most civil disputes appear first before a State Court. Final appeals are heard and case reviews areconducted by the Supreme Court. A Commercial Court handles cases such as bankruptcy and liquidation.Other court systems recognised by the country are:• State Administrative Court—hears administrative law cases against the government;• Constitutional Court—hears disputes concerning legality of law products, general elections, dissolutionof political parties and the capacity of a state institution; and• Religious Court—deals with specific religious cases, particularly marriages.1.5 Administrative divisionsIndonesia currently has 33 provinces. These comprise 27 typical provinces, two special regions (DaerahIstimewa i.e. Aceh and Yogyakarta) and one special capital city region (Daerah Khusus Ibukotai.e. Jakarta). Each province is headed by a Governor.Provinces (the first administrative level or Dati I) in Indonesia are divided into Regencies (kabupaten) inrural areas or Municipalities (kotamadya) in urban areas. Regencies and Municipalities (the secondadministrative level or Dati II) are further divided into Subdistricts (kecamatan). The lowest level in theadministrative hierarchy is the Village (desa) in rural areas or the Neighbourhood (kelurahan) in urbanareas. Legislation at the provincial level is handled by parliaments from Dati I and Dati II. Governors,mayors and regents must be directly elected by the people and this has been effectively implemented since2004.1.6 Current economic policyIndonesia has seen considerable economic growth over the past 40 years. Initially a country largelydependent on agriculture, it is now one of the major emerging markets in the region. Today, Indonesia is theworld’s largest exporter of liquefied natural gas (LNG) and the 17th largest oil producer in the world,responsible for about 1.8% of global production (as at 2004).A number of economic packages have been launched, aimed at increasing foreign investment,encouraging infrastructure development and strengthening the financial sector.Recent economic trends have been positive. Domestic consumption has been steadily increasing, thecurrency has been strengthening with reduced volatility and there has been stable economic growth.F-10