What are the biggest problems facing Indonesia? by Julius Galih
Answer by Julius Galih:
Communal Conflict and Disintegration
Decentralizing reforms in the period 1999-2001 were associated in some places with communal (religious and ethnic) warfare. The connection can be better understood with the techniques of resource mobilization than with those looking for grievances. The former takes more interest in history and politics than in timeless hurts. A study of the conflict narratives shows that these episodes emerged as ‘politics by other means’ at a moment of opportunity following the collapse of the New Order in 1998. They were led by urban middle class elements in provincial towns outside Java that were particularly dependent on state subsidies. 
Youth Unemployment; Demographic Disaster
High youth unemployment is one of the threats that is being faced by Indonesia. Indonesia has a young population as roughly half of the is below thirty years of age. This means that the country contains a potentially large workforce. But this demographic bonus can turn into a demographic disaster if this workforce cannot be absorbed by employment opportunities. The World Bank recently warned against Indonesia’s high youth unemployment and misplaced focus on education spending.