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ike Indonesia, Japan is an  archipelago located in the Asian continent. They both consist of a myriad of volcanic islands where, unfortunately, various natural disasters such as earthquakes and tsunamis can occur. These two nations are inhabited  by huge populations. They both have rice  as a staple food.  

Despite these common traits, their similarities do not go much further, while the  aspects that make them different are numerous. Before searching for explanations and trying to understand the roots of these  differences, it is useful to have an overview.

Indonesia has twice the fertility rate of Japan and its demography is almost exactly double that of its  distant neighbor: 255 million Indonesians for 126 million Japanese. If this does not clearly tell us which nation is more prosperous, it is time for bigger numbers.

Japan has five times the gross domestic product (GDP) of  Indonesia, the military  expenses and  the internet users. Indonesia has 12 percent of its population living below the poverty line, whereas Japan has zero. Even though more and more  Indonesian youth  are  now moving into cities, the rural population in 2016 is still 15 times more important  than in Japan. Finally, GDP per capita is more than 10 times higher in Japan (US$38,000 versus $3,400 in Indonesia).

So why has Japan managed to develop so much faster than Indonesia over the last century?  Studies show that some criteria  have played pivotal roles in this process. The most crucial factors are institutions, geography, culture, education and networks.

When an entire system is governed not by merit but by nepotism, society cuts the potential of a huge part of the population. Strategic positions are not given to the best,  but to the sons of the leaders, regardless of their skills. Hence  society makes little to  no progress under poor management. If the institutions of a nation do not guarantee justice and fair treatment for every citizen, corruption and clan organizations always overpower.

Indonesia  abounds in resources. The nation has 100 times more  natural gas  and oil reserves than Japan, but unfortunately has fallen into what specialists call the '€œresources  trap'€.

William  Kohler
Bandung