As one of the rare unique improvements that can be built on water tiles, the Kampung gives the Indonesians a good incentive to settle on islands. As long as there are plenty of resources in the water, they can build populous, productive cities in places other civs won't want to settle, and they'll most likely have easy access to Oil in the later eras.
For an Indonesia play-through pursuing a Culture Victory, the Kampung is essential. Once Flight is researched, Kampungs will provide Tourism for each bonus Food on the tile (which includes the bonus Food provided by the Lighthouse).
In the densely-packed islands of Southeast Asia, local rulers faced the challenge of how best to house their people while also keeping them safe from floods and wildlife. Their answer – communities of tightly-clustered houses on stilts, or the kampung.
While the term is a general one referring to a neighborhood, Indonesian kampungs were famous for helping Java achieve the highest population density of any island in the world. Indeed, foreign visitors were so impressed by the efficiency of Indonesian and Malay kampungs that they adopted the term in the English ‘compound.’