There are many reasons Americans should be watching events in Indonesia, the Southeast Asian archipelago nation of more than 17,000 islands. While its booming economy is attracting millions in U.S. investments, officials are concerned about growing Islamic extremism. The nation's tolerant brand of Islam blends piety with modernity. While many Indonesians answer the call to prayer five times a day, they also answer friends on Facebook. Women in miniskirts amble alongside friends clad in the jilbab headscarf, and bars, nightclubs, karaoke and alcohol are easily found in most cities. Indonesia, with 240 million inhabitants, is the world's fourth-most-populated country and the world's third-largest democracy. Secretary of State Hillary Rodham Clinton has praised Indonesia as a place where "Islam, democracy, modernity and women's rights can coexist." Indonesia: A few facts
  • Indonesia's economic revival is based largely on domestic consumption and its rich natural resources of oil, natural gas, coal and palm oil.
  • Its annual per capita income has more than tripled from $1,000 in 2000 to a projected $3,500 in 2011.
  • Foreign investment skyrocketed 52 percent last year to $16.2 billion; annual economic growth is projected at 6.4 percent.
  • The rupiah is at a seven-year high against the U.S. dollar, and, according to the Wall Street Journal, "Indonesian stocks are perkier than a cup of java."
  • Economic progress has largely occurred since the fall of the 31-year authoritarian rule of Gen. Suharto (1967-1998), and has been made possible by a stable democracy led by President Susilo Bambang Yudhoyono, the nation's first president to win by direct vote in 2004, who easily won re-election in 2009.
The nation's challenges
  • Endemic corruption has worsened under a Yudhoyono reform program to transfer political and economic power from Jakarta to the provinces.
  • The United Nations says half the population lives on less than $2 a day.
  • Millions still lack potable water, adequate sanitation and electricity.
  • About one-third of children under 5 suffer from malnutrition.
  • Violent attacks by Islamic fundamentalists are growing.
  • Indonesia's population is also soaring, which could negate future economic gains. At an annual growth rate of 1.3 percent, the population will reach 470 million by 2060, and 940 million by 2110, according to the National Family Planning Coordination Agency.

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