When investors consider the emerging markets, their parochial outlook is often limited to the BRIC, a term that embodies the major markets of Brazil, Russia, India and China. But in the years since “BRIC” was first coined back in 2001, several other nations now offer compelling growth opportunities, particularly in Southeast Asia. This month, we’ll take a look at the island archipelago of Indonesia.

Comprised of 17,508 islands, Indonesia encompasses a landmass of more than 1.9 million square kilometers and is the fourth most populous nation in the world. With its sheer size and the fact that its population includes more than 300 distinct ethnic groups, Indonesia’s political atmosphere can be tumultuous. Nevertheless, Indonesia benefits from some unique attributes.

Indonesia has abundant reserves of a variety of natural resources including coal, gold, tin, oil, gas, wood and rubber. The nation has proven reserves of almost 4 billion barrels of oil and more than 3 trillion cubic meters of natural gas. Its oil exports average about 400,000 barrels of oil a day and it is the eighth-largest global exporter of natural gas at 40.5 billion cubic meters in 2010. Because of its energy exports, the country has foreign exchange reserves of about USD110 billion.

But the beauty of Indonesia’s growth story is that it’s not solely driven by exports or commodities. Rather, it’s all about demographics.

Like many of its emerging market peers, Indonesia is a relatively young nation with more than two-thirds of its population between the ages of 15 and 64. Only 6.1 percent of the population is 65 years of age or older, a stark contrast to the aging populations of the developed world. Indonesia’s citizens are also fairly well educated, with most Indonesians having the equivalent of at least a high school education and a literacy rate of just over 90 percent.

While Indonesia’s unemployment rate is currently around 22 percent, unemployment has fallen steadily in recent years. Part of that drop could be due to the fact that Indonesia offers cheaper labor than China. While the average monthly wage for a Chinese manufacturing worker is currently about USD300, their Indonesian counterparts earn just under USD100. As a result of this wage differential, a growing number of manufacturers have shifted their operations to Indonesia, and that’s spurred significant wage growth for Indonesians. Over the past five years, the average wage earned in Indonesia has risen by about 30 percent.

Domestic consumption now accounts for about 60 percent of Indonesia’s economic growth, with retail sales having doubled over the past three years. By virtue of its domestic consumption-driven economy, Indonesia was one of only three G-20 nations to post positive gross domestic product (GDP) growth in 2009.

That growth enabled the Indonesian government to strengthen the nation’s balance sheet. Over the past decade, the country’s debt-to-GDP ratio has fallen from around 65 percent to just below 25 percent last year. Inflation has averaged between 4 percent and 5 percent per annum over the past few years.

Given the health of its national economy, ratings agencies Fitch and Moody’s upgraded Indonesia’s sovereign debt rating to investment grade, marking the first time the country has enjoyed such a high rating since the Asian financial crisis in 1997. That should push the country’s cost of capital down, which will allow it to invest in pro-growth measures and develop a more robust infrastructure, a sector of the economy that’s been neglected for the better part of 20 years. President Yudhoyono has pledged to double infrastructure spending to $140 billion over the next five years and has relaxed infrastructure investment rules. That should further support GDP growth, which has averaged about 7.5 percent over the past two decades.

Because the bulk of Indonesia’s economic growth is driven by internal demand rather than by exports, it is an extremely attractive market in the current environment. While many nations in the region will be adversely affected by the slowdown in China, Indonesia’s domestic economy should keep it well insulated. And the looming recession in Europe is largely a non-issue for the country since it has minimal trade ties to the eurozone.

iShares MSCI Indonesia Investable Market Index (NYSE: EIDO) offers exposure to an attractive mix of Indonesian assets.

The fund’s single largest sector allocation is to the financial sector, which has a 26.3 percent weighting. The nation’s largest banks occupy a majority of the fund’s holdings in financials. These banks enjoy a near monopoly in Indonesia due to the government’s tight prudential regulation. That’s bolstered the profitability of the banking sector, which has enjoyed strong loan growth over the past three years.

The fund’s next largest allocation (20.2 percent of assets) is to basic materials, which account for a large portion of the country’s economic activity. That’s followed by consumer cyclical names at 19 percent of assets and consumer defensive names at 13.5 percent.

The fund also provides an attractive mix of market capitalization exposures. A bit more than a third of assets are allocated to giant-cap companies, followed by a 54 percent allocation to large caps. Most of the remaining assets are allocated to mid-caps, with a negligible 0.8 percent allocation to small caps. While small-cap and mid-cap names typically offer greater exposure to domestic consumption trends in other countries, Indonesian large caps are just as dependent on its domestic economy as its smaller-cap peers. The relative geographic isolation of Indonesia’s islands means that even large Indonesian companies generate an average of two-thirds of their revenue domestically.

With an annual expense ratio of 0.59 percent, the fund is the least-expensive, Indonesia-oriented exchange-traded fund (ETF) available.

For exposure to one of the strongest economies in Asia, buy iShares MSCI Indonesia Investable Market Index below 35.