Indonesia’s poor performance is explained by political and economic factors. Indonesia is the world’s most populous Muslim nation and also one of the most ethnically diverse. The richness of Indonesia is its diversity, but it is also a weakness. It can easily trouble the nation with ethnic rivalries. 
The transition from dictatorship to democracy led to many economical uncertainties. Although Indonesia is now under a democratic rule but many problems accumulated after living for 30 years under the rule of a dictator_ Suharto. Although the economy is growing but there is a lot of factors contributing for Indonesia poor performance.
?    Unemployment is still high at around 10% of the working population.
?    Growth in labor productivity has been nonexistent for a decade.
?    Foreign capital is fleeing the country,
?    Business activities are hurt by excessive red tape. It takes approximately 151 days on average to complete the paperwork necessary to start a business. It's the sort of environment foreign investors’ recoil from.
?    High level of corruption from government bureaucrats
 What makes an international business even worst is the extremely poor infrastructure. 
Indonesia is an example of how political and economical factors are closely related and how they impact the international business.
The challenge for the Indonesian government is to keep the economy certain while attracting foreign investments.
    □       For thirty years, Indonesia’s economy grew steadily under the ironclad rule of President Suharto – but at the heavy cost of internal suppression of dissent.   This suppression of dissent robbed Indonesia’s economy of the vitality and incentives associated with a free-market economy in which individual property owners, who in the process of seeking to accumulate wealth enrich the entire economy and create economic growth.   While Indonesia has since overthrown the dictatorial government, corruption and red tape remain rife at almost...