At the time Europe was entering the somewhat ‘dark’ Middle Ages, and before what was to become the United State of America had been ‘discovered’, much of the territories of what is now Indonesia found themeselves under the more enlightened influences of the Hindu and Buddhist cultures of India. Islamic cultur was first introduced around AD 1400 or possibly earlier in northern Sumatra, spreading later to Java and other islands.

Portuguese traders seeking spices in the Maluku island group in the 16th century formed the first European intrusion. The Dutch East Indies Company ruled Indonesia from 1605 until its demise in 1799, when direct rule was imposed by the Netherlands and wich, apart from brief interludes of British and Franch administrations in the 19th century, formallly lasted until 1949.

The Japanes occupation from 1942 to 1945 served to strengthen a growing Indonesia nationalist movement. On August 17, 1945 two early patriots, Soekarno and Hatta, proclaimed Indonesia’s independence while still formally under Japanese military rule. Shortly thereafter, Soekarno was declared first president of the Republic of Indonesia.

Only towards the end of 1949, after continued struggle, did the Netherlands relinquish all claims to its former colonial territory and recognize the independent republic of the "Unites States of Indonesia". The initial confederationof semi-autonomous states collapsed soon after and on August 17, 1950, the unitary Republic of Indonesia was reinstated.

On May 1, 1963, the Dutch-held territory of Irian Jaya (previously called West Irian) was transferred to Indonesia. The colony of East Timor, under Portuguese colonial administration for over 300 years, completed the territory of the modern-day republic when it became Indonesia’s 27th province in July 1976.

During the first decades of independence, political focus was more on the task of nation building than economic development, leading to overall deterioration of the economy.

Following the (second) aborted coup in 1965 by the Indonesian Communist Party, executive power to restore peace and order was transferred in March 1966 to General Soeharto, who was elected acting president by the Provisional People’s Consultative Assembly in March 1967 and president in March 1968. The first general election since 1955 was held in 1971 to elect member to the House of People’s Representatives. President Soeharto has been reelected by the Assembly in each successive presidential election.

The New Order Government set out immediately to restore stability to an economy racked with difficulties. Long-term goals, base on rational economic planning, were established for the development of national resources and the improvement of living standards. Major policy objectives included drastic reduction and control of inflation, poverty reduction, rehabiliotation of infrastructure, increased domestic production and improved export performance - all of wich have remained guiding policy goals to this day.

Indonesia covers a landmass of 1.91 million km2 and teritorial waters nearly four times that size. In total, the country comprises 17,508 islands stretching 5,120 km east to west and 1,760 km north to shuth. A number of strategic sea trade routes lie close to or thread between Indonesia’s islands, including the Sunda, Makasar and Malacca Straits.

Nearly 60 percent to Indonesia’s land is forested, and a significant portion is mountainous and volcanic. Some mountains on Sumatra and Irian Jaya exceed 3,000 meters in height. Java alone has 112 volcanoes, some of which are active, including Krakatau in the Sunda Strait, probably the most famous of all. Volcanic activity has led to a high degree of soil fertility on Java and Bali, which accounts in part for the concentration of agriculture and people on the two islands.

Most of Indonesia’s territory lies along or just south of the equator, giving the country a tropical climate characterized by wet and dry monsoon periods, with slight changes of season and temperature, low winds and high humidity. The Jakarta climate is exemplary : temperature range between 25 and 35 degrees Celsius, with humidity between 75 and 95 percent. By contrast, snow lies year round on Jayawijaya (Carstensz) mountain range in central Irian Jaya.

Rainfall varies throughout Indonesia, averaging 706 mm yearly. It is generally heaviest — up to 2,286 mm a year — in the equatorial belt passing through Sumatra, Kalimantan and Sulawesi, and can reach over 4,000 mm at the higher elevations of these islands.