Indonesia has officially 583 languages and dialects, but in reality there would have over 700 (Source: SIL International), making it one of the most diverse countries in the world at the linguistic level.
The official language is Indonesian language also known as “Bahasa Indonesia“ and that allows to the different populations that inhabit this country to communicate each other. This is a variety of standardised and formalised Malay. This language was developed as Esperanto, from the various Indonesian dialects, therefore simple and in principle with not many exceptions. It’s a language close to all varieties of Indonesian languages and not belonging to any particular group. So it’s a language considered as “neutral” for all Indonesian languages.
In 1928, at the beginning of the struggle for independence, the young Indonesian nationalists created the first linguistic congress that allowed the national language (Malay) to lay the foundations of an operation designed to develop an orthography (with the use of the Latin alphabet, and no longer Arabic), a grammar and vocabulary adapted to modern life. They called their language Bahasa Indonesia (“Indonesian language”). Bahasa Indonesia was invented to serve to symbolize national unity. Faced with the great linguistic diversity of the country, the official Indonesian language allows overcomes the barriers of misunderstanding.
Many foreign language inputs have also contributed to the creation of the Bahasa Indonesia and so trace the history about the multiple contacts of the archipelago with the outside world. Indeed, we find there many words in Dutch, Arabic, Portuguese, English…
The article 36 of the Indonesian Constitution proclaimed the Indonesian language as “state language” in 1945. It was not until 1955 that this language was officially called Bahasa Indonesia and that the Government undertook its codification, normalization and expansion. Its evolution will continue a long time since it’s estimated to 130,000 new terms created between 1951 and 1964.
Therefore, Bahasa Indonesia is a very recent language. The official 1990 census revealed that 71% of Indonesians speak Bahasa Indonesia as a second language after their local dialect and 25% totally ignore the national language.
(Source : http://www.tlfq.ulaval.ca/axl/asie/indonesie.htm)