Claim: The largest island country is Indonesia.

Indonesia -LRB- -LSB- ɪndəˈniːʒə -RSB- or -LSB- ˌɪndoʊˈniːziə -RSB- ; Indonesian : -LSB- ɪndonesia -RSB- -RRB- , officially the Republic of Indonesia -LRB- -LSB- rɛpublik ɪndonesia -RSB- -RRB- , is a unitary sovereign state and transcontinental country located mainly in Southeast Asia with some territories in Oceania . Situated between the Indian and Pacific oceans , it is the world 's largest island country , with more than seventeen thousand islands . At 1,904,569 km2 , Indonesia is the world 's 14th-largest country in terms of land area and world 's 7th-largest country in terms of combined sea and land area . It has an estimated population of over 260 million people and is the world 's fourth most populous country , the most populous Austronesian nation , as well as the most populous Muslim-majority country . The world 's most populous island , Java , contains more than half of the country 's population .   Indonesia 's republican form of government includes an elected legislature and president . Indonesia has 34 provinces , of which five have Special Administrative status . Its capital and country 's most populous city is Jakarta , which is also the most populous city in Southeast Asia and the second in Asia . The country shares land borders with Papua New Guinea , East Timor , and the eastern part of Malaysia . Other neighbouring countries include Singapore , Vietnam , the Philippines , Australia , Palau , and the Indian territory of the Andaman and Nicobar Islands . Despite its large population and densely populated regions , Indonesia has vast areas of wilderness that support the world 's second highest level of biodiversity . The country has abundant natural resources like oil and natural gas , tin , copper and gold . Agriculture mainly produces rice , palm oil , tea , coffee , cacao , medicinal plants , spices and rubber . Indonesia 's major trading partners are Japan , United States , China and the surrounding countries of Singapore , Malaysia and Australia .   The Indonesian archipelago has been an important region for trade since at least the 7th century , when Srivijaya and then later Majapahit traded with China and India . Local rulers gradually absorbed foreign cultural , religious and political models from the early centuries CE , and Hindu and Buddhist kingdoms flourished . Indonesian history has been influenced by foreign powers drawn to its natural resources . Muslim traders and Sufi scholars brought the now-dominant Islam , while European powers brought Christianity and fought one another to monopolise trade in the Spice Islands of Maluku during the Age of Discovery . Following three and a half centuries of Dutch colonialism starting from Amboina and Batavia , and eventually all of the archipelago including Timor and Western New Guinea , at times interrupted by Portuguese , French and British rule , Indonesia secured its independence after World War II .   Indonesia consists of hundreds of distinct native ethnic and linguistic groups , with the largest -- and politically dominant -- ethnic group being the Javanese . The population is unevenly spread throughout the islands within a variety of habitats and levels of development , ranging from the megalopolis of Jakarta to uncontacted tribes in the east . A shared identity has developed , defined by a national language , ethnic diversity , religious pluralism within a Muslim-majority population , and a history of colonialism and rebellion against it . Indonesia 's national motto , `` Bhinneka Tunggal Ika '' -LRB- `` Unity in Diversity '' literally , `` many , yet one '' -RRB- , articulates the diversity that shapes the country . Indonesia 's economy is the world 's 16th largest by nominal GDP and the 8th largest by GDP at PPP , the largest in Southeast Asia , and is considered an emerging market and newly industrialised country . Indonesia has been a member of the United Nations since 1950 . Indonesia was an organizer of the Bandung Conference and was the founder of Non-Aligned Movement ; and also the founding member of Association of Southeast Asian Nations , Asia-Pacific Economic Cooperation , East Asia Summit , and Organisation of Islamic Cooperation . Indonesia is a member of the G20 major economies and World Trade Organization .