Economy Of Indonesia Essay

1168 words - 5 pages

Indonesia is a country in south-east Asia. It has the world’s highest population of Muslims and is the world’s 4th most populous country. Its capital is Jakarta. Having its world rank at 18th by economy, 15th largest in purchasing parity respectively, thus becoming a slowly progressive country.

In this essay, I will be talking about how the changes in demographic characteristics of Indonesia over the past 10 years can affect its economy in terms of unemployment, GDP (Gross Domestic Product), and poverty. Unemployment is an economic condition marked by the fact that individuals seeking jobs but remained unhired. A country's GDP is the total market value of all final goods and services produced in a country. Poverty is when the income of people is below the GNP (Gross National Product) per capita of a country with scarcity of means and subsistence.

Population growth is the change in population over a period of time. It happens due to a number of factors such as standard of living, cultural factors, and government policies. When the standard of living become better such as the improvement of social conditions ( shelter, sanitation, clean water , health care and etc) death rate and birth rate reduce as more people become inclined to have fewer children. As standard of living increases, there will be more immigrants thus an increase in population. Government policies which encourage people to have lesser or more children also has a significant effect on birth rate too.

The population growth of Indonesia has been reducing at a steady rate since 2000 up till 2010. As its population growth rate decreases, its labour force is also decreasing and as a result, there will be more job opportunities for people. As job opportunities are increasing, people who were unemployed are now getting jobs and as a result unemployment rates falls. In effect, as more and more people are getting jobs, the number of people living below the poverty line also decreases. As people get jobs and are producing goods and services the GDP of a country also rises. As the gap between GDP and population growth rate rises, the standard of living for an average person in the country also increases. As the standard of living increases, people start immigrating into the country and there is less emigration also. This helps the country reach its optimum population leading to an increase of its economy, but if the growth rate declines significantly, it could cause problems for the country as there wont be enough people to fill in the job opportunities given by new firms or existing firms. As a result, immigrants could come in to fill in the job opportunities and if the labour force consists mainly of immigrants than native people then import will be more than export thus putting the country at loss. As regards to this, Indonesia should maintain reducing its population growth rate but at the same time it should not let the growth rate decline too much. It should keep...

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