Indonesia's modern history is characterized
by General Suharto's long holding of power from 1968 to
1998. His authoritarian regime was dominated by the
military and the army-controlled party Golkar. Political
stability and economic growth were achieved at the price
of severe repression by political opponents and
separatists. The military and Suharto's immediate circle
were greatly enriched, but in an economic crisis of
1997-1998 the regime for popular demonstrations fell.
Indonesia has since undergone an occasional painful
democratization with many violent internal conflicts.
General Suharto's take-over as president in 1967 led
to major fluctuations in Indonesian politics and
economy. The fight against communism continued for
several decades. Foreign policy changed, both in
relation to Malaysia and to the communist countries;
contacts with the latter were broken or frozen, while
relations with Malaysia were restored.
List of most commonly used acronyms containing Indonesia. Also includes historical, economical and political aspects of the country.
In domestic politics, Suharto launched "the new
order", whose main objective was political stability.
The army-led party Golkar provided a political base for
Suharto. Through Golkar, the army could play a role in
all areas of society. Golkar quickly overshadowed all
other parties by massive pressure on the electorate of
the regime and the army.
In the 1971 parliamentary elections, Golkar received
63 percent of the vote, and in the subsequent elections
until the end of the 1990s, the party continued to be at
about the same level. In 1973, the country's five
nationalist and Christian parties were forced to merge
into one party, the Democratic Party (PDI), while the
four Muslim parties merged into the United Development
Party (PPP). All other political activity was banned.
Pancasila and economic growth
For Suharto's rule, the state ideology, pancasila
(introduced by Sukarno in the 1945 constitution), also
came to play an important role. Five principles would
govern the nation: the belief in a single god, humanism,
national unity, democracy and social justice. Pancasila
is based on unanimity, reverence for authorities and a
priority of the collective over the individual. Opposing
pancasila was done simultaneously with belonging to
either the "extreme left" (ie, communist) or the
"extreme right" (ie radical Muslim).
The second guiding principle for Suharto's "new
order" was economic development. Suharto enlisted the
help of foreign experts who drew up economic policy
guidelines. The targets were set in five-year
development plans. Contrary to Sukarno's socialist
policies, the Suharto regime chose a more capitalist
course, even though the state played a major role
through investment and trade restrictions.
The regime favored certain industries and companies.
Large conglomerates (mergers of companies) arose, often
under the leadership of relatives of Suharto or wealthy
Chinese. The conglomerates were given a monopoly on
producing and importing certain products in exchange for
financing government investment objects. In order to
protect domestic companies, import restrictions were
imposed. This led to the companies being able to sell
their goods on the domestic market at soaring prices.
With the aid, foreign loans and oil exports - which
were heavily favored by high oil prices in the mid-1970s
- the economy expanded rapidly between 1968 and 1982.
Indonesia, which in the 1970s was the world's largest
importer of rice, became self-sufficient in 1985 and
could also export rice.
The Suharto family enriches themselves
When oil prices fell in 1986, the regime changed its
focus on increased production of non-oil-based export
goods. Plywood exports became significant. At the same
time, trade was liberalized, favored companies lost
their import monopoly and the credit and tax system was
reformed. Suharto's family and friends were given an
increasingly important role in the economy. Through
managerial positions in state-owned enterprises and
allocations of state monopolies, contracts and
subsidies, the people of the Suhartos sphere gained
enormous wealth. The questionable economic dealings of
the Suharto family aroused anger among the people and
encouraged corruption among lower officials as well.
Suharto's attempt to silence all criticism also
helped to weaken his power base. The regime saw the
popular Megawati Sukarnoputri, the daughter of President
Sukarno, dismissed as party leader of the Democratic
Party (PDI) in 1996. Suharto did not want her to
challenge him in the 1997 parliamentary elections.
Suharto's actions. In the spring of 1998, Suharto was
re-elected president for a seventh term by the People's
In the summer of 1997, the Asian financial crisis
reached Indonesia. When the authorities, in response to
speculation against the Indonesian currency rupiah, were
forced to give up the US dollar, this meant that the
exchange rate fell sharply. The country's deeply
indebted companies and banks faced major problems in
meeting their interest rates, which led to a wave of
bankruptcies. Inflation rose record-breaking.
The Asian crisis leads to riots
In October 1997, Suharto was forced to turn to the
IMF for assistance. In January 1998, he signed an
agreement with the IMF, which would allow Indonesia to
borrow $ 43 billion. In return, Suharto promised to
further liberalize the economy. The monopoly on plywood
exports would be wound up as well as the support for
status projects as a separate Indonesian car and
aviation industry. But the promised help quickly froze
in when Suharto did not show enough willingness to
implement the reforms. New negotiations were carried out
and the agreement was rewritten, but rupiahn collapsed
and it became an impossible burden to pay interest and
deductions on the $ 120 billion foreign debt.
When the Suharto regime, on May 4, 1998, as part of
the agreement with the IMF, increased the gasoline price
by 70 percent overnight, a violent dissatisfaction was
created among the poor. The students had already
mobilized ever more demonstrations against the regime
for several months. The price increases, combined with
the death of four students from the University of
Trisakti during a peaceful demonstration on May 12,
became the spark that two days later triggered a riot in
Jakarta. 1,118 people died and 5,000 buildings were
burned down. The riots were mainly aimed at banks,
companies and businesses controlled by the Suharto
family or its business friends, including the
Chinese-owned conglomerates. The looting and murder
indiscriminately affected the Chinese minority.
The suharto regimen falls
Suharto tried to appease the opposition by replacing
parts of his government, but the demands for him to
resign increased in strength and now came from former
allies. It was also clear that Suharto could no longer
count on the full support of the military leadership.
After 32 years, on May 21, 1998, Suharto finally
surrendered power to his Vice President BJ Habibie.
Following Suharto's case, several high-ranking
officials and politicians from Golkar have been subject
to judicial investigations. But Suharto himself died at
the age of 86 in January 2008 without being tried. In
2000, a court found Suharto incapable of passing a
lawsuit because of poor health. He was then accused of
embezzling $ 570 million of state funds. The lawsuit was
formally closed in May 2006. The Suharto family is said
to have accumulated assets worth $ 15 billion - $ 45
Indonesia's new President Habibie implemented several
democratic reforms. Among other things, political
prisoners were released and a new law on freedom of
assembly and press was introduced. Contacts with the IMF
and other lenders improved.
The fact that Indonesia claimed its 24-year
occupation of East Timor at the end of 1999 was also
Habibie's merit - or, as some Indonesians saw it, wrong.
In January 1999, Habibie offered East Timorans autonomy
in Indonesia or - if the offer was ratified -
independence. In August, a UN-organized vote was held
among East Timorans on the proposal. When the majority
voted for independence, it led to strong protests from
militia groups in East Timor who wanted the area to
remain Indonesian. In its violent advance, the militia
killed about 1,500 people. Two-thirds of East Timorians
were forced to flee, either through mass movements
organized by the militia or on their own initiative.
East Timor becomes independent
The militia groups received weapons and support from
local phalanges in the Indonesian military and much
indicates that even high-ranking military in Jakarta had
knowledge of the militia's plans. Following the pressure
from the outside world, the Indonesian government
reluctantly agreed to allow UN forces to reestablish the
regime in East Timor. In October 1999, the People's
Advisory Assembly formally abolished East Timor's
position as an Indonesian province. According to the
Truth and Friendship Commission set up by Indonesia and
East Timor in 2005, systematic crimes against humanity
were committed by Indonesia's army in East Timor in 1999
by providing Indonesia-friendly militia with weapons.
The militia then initiated mass murder of independence
The June 1999 parliamentary elections became a major
step on the road to democracy. A new electoral law made
it possible to hold elections under fair and democratic
conditions. The previous duty of civil servants to vote
for Golkar had been removed. The Democratic Party Camp
(PDI-P), which broke out of PDI in 1998 with Megawati as
its leader, became the largest party. Second place came
Megawati was a big favorite when the People's
Advisory Assembly met in October 1999 to appoint a new
president. But representatives of the Muslim parties
considered it inappropriate with a woman in the
presidential post and instead launched Abdurrahman Wahid
as his candidate. Wahid's newly-launched Muslim National
Revival Party (PKB) had received 10 percent of the vote
in the election. When the People's Assembly rejected
Golkar's candidate Habibie, the party chose to support
Wahid, who thus won the vote.
First female president
In Megawati's camp, the wrath became great. Only
since Wahid succeeded in persuading Megawati to stand as
vice president did the protests subside. It soon became
apparent that the government of Wahid did not manage the
economy or end the regional conflicts in Aceh, Papua
(formerly Irian Jaya) or the Moluccas. The morbid Wahid
also showed samples of unpredictability and
whimsicality. The criticism against the government grew
and Wahid came on a collision course with the House of
Representatives when he was accused of being involved in
two corruption millions in the multi-million class.
The Prosecutor General in May 2000 released Wahid
from the suspicions of corruption, but in July the
People's Advisory Assembly decided to dismiss Wahid for
incompetence and for involvement in financial scandals.
Vice President Megawati Sukarnoputri was elected by
Parliament as new president until the 2004 elections.
In parallel with the political upheavals in the
country's leadership, violent unrest was going on in
different parts of the kingdom. The conflicts had long
since surfaced or intensified when the Suharto regime's
military repression eased in 1998. East Timor's
separation from Indonesia also increased the demand for
independence elsewhere, including in Aceh and Papua (see
Aceh and Papua, respectively).
In Kalimantan, fighting erupted among the indigenous
people of the Dajak and invaded Maduras from the island
of Madura in 1998. In new violence that erupted in
February 2001, the Dajakas killed around 500 Maduris and
150,000 people fled. The conflict was rooted in the
difficult economic and social situation of the Dajak as
well as in the competition for natural resources.
In 1999, violent conflicts between Muslims and
Christians were triggered in the Moluccas and Sulawesi.
The balance of power between the fairly equal religious
groups had been disrupted during the 1990s by the move
of Muslims on the encouragement of the regime. During
the conflicts, churches and mosques were burned down and
people were evacuated. Mass killings took place on both
Christians and Muslims. The clashes worsened as
thousands of militant Muslims from the Java-based
militia group Laskar Jihad traveled to the territories
to participate in the fighting. The militias were
supported by groups within the military and even
politicians in Jakarta were reported to inflame the
Indonesian military was sent to the Moluccas, but its
presence worsened the situation when soldiers took party
for either party. Only in February 2002 did the Megawati
government negotiate a ceasefire between Christian and
Muslim leaders. By then, more than 5,000 people had been
killed in the archipelago and hundreds of thousands had
lost their homes. The acute crisis was over, but for
years the violence continued to flare up even after the
In Sulawesi, the city of Poso became the center of
religious conflict. The fighting raged between 1999 and
2001, when a peace agreement was reached which
reasonably restored calm. An estimated 2,000 people had
been killed in the fighting and tens of thousands had
fled. Outbreaks of violence, however, also occurred
after the peace agreement. In September 2006, riots
erupted in Poso when thousands of Christians went into
violent protests against the execution of three
Christian militia. A month later, a Catholic priest was
shot to death by unknown perpetrators. The murder was
linked to the protests against the executions, as the
priest had led several of the demonstrations.
(For information on the terrorist attack on Bali in
2002 and the consequences thereof, see Militant
First directly elected president
Through a constitutional change, in September 2004,
the Indonesians were able, for the first time, to elect
a president in direct, general elections. Winner was the
former General Susilo Bambang Yudhoyono. He clearly won
over incumbent President Megawati Sukarnoputri in the
second and decisive round of elections.
Yudhoyono had left his post of security minister in
Megawati's government in March of the same year and
formed his own party, the Democratic Party (PD), before
the parliamentary elections in April. In the election
Golkar became the biggest party, while Megawati's PDI-P
came in second place. Largest Muslim party became the
moderate United Development Party (PPP). Yudhoyono's PD
became the fourth largest party. The election result was
seen primarily as a defeat for Megawati, whose party
backed by 44 seats compared to the 1999 election.
In October, Yudhoyono formed a government consisting
of both secular and Muslim politicians. Golkar's
decision in December 2004 to support the government
received strong support in Parliament.
Yudhoyonos ten years in power
During the 2004–2009 term of office, Yudhoyono and
his government enjoyed strong popular support. The
consequences of the tsunami disaster on July 2004 (see
Aceh), when at least 170,000 people were killed in the
province of Aceh, caused the nation to join the
political leadership. Yudhoyono also became known as a
pragmatic leader, who took power against the serious
corruption within the state administration. During his
time in power, a commission was established, as well as
special courts for the fight against corruption. More
than 1,000 politicians and civil servants at local and
regional level were examined by the judiciary and
hundreds were found guilty. The government's methods of
combating militant Islamism after the Balidade in 2002
were praised by the outside world, while the country's
economy showed strong growth. Also the peace agreement
2005 between the government in Jakarta and the
separatist GAM guerrilla in Aceh (see Aceh) is
considered to be Yudhoyono's more significant success (Yudhoyono
became very popular with the Aceh after the peace
agreement; in the 2009 presidential election he received
93% of the Aceh vote).
During the 2009 election year, Yudhoyono reaped new
successes. In the April parliamentary elections, his PD
went strong and became the biggest party. Golkar and
PDI-P backed and came second and third respectively. The
fourth largest party was the Muslim Welfare and Justice
Party (PKS). In the July 2009 presidential elections,
Yudhoyono won the first round of his opponents Megawati
Sukarnoputri from PDI-P and Golkar's candidate Jusuf
After the election victory, the president formed a
broad coalition government consisting of DP, Golkar and
the four Muslim parties National Mandate Party (PAN),
PKS, National Revival Party (PKB) and PPP. PDI-P became
the largest opposition party.
During the second term of the 2009–2014 term, the
popularity figures of the Yudhoyono government turned
significantly down. Despite the fight against
corruption, Indonesia remained a severely corrupt
country. The president's reputation took a toll when he
was forced to deal with a series of corruption scandals,
including with government ministers involved. However,
the Yudhoyono government received praise for piloting
Indonesia through the global financial crisis of
Tsunami kills 170,000 in Aceh
A powerful earthquake in the Indian Ocean sends a series of tsunami over the
Aceh province in northern Sumatra. More than 170,000 Aces are killed and about
700,000 become homeless. The worst hit is the provincial capital of Banda Aceh
and its environs and the city of Meulaboh, which is totally destroyed.
Yudhoyono's new government takes office
President Yudhoyono's new government takes office with ministers from secular
DP and PDI-P, as well as the Muslim PAN and PKS. Golkar promises to support the
government in parliament.
Bomb attack against the Embassy of Australia
Nine people are killed and over 180 injured when a car bomb goes off outside
the Australian embassy in Jakarta. The militant Islamist network Jemaah Islamiah
(JI) is suspected to be behind the attack.
Yudhoyono wins the presidential election
Susilo Bambang Yudhoyono of the Democratic Party (DP) gets over 60 percent of
the vote in the second and decisive round of the presidential election, thus
clearly winning over Megawati Sukarnoputri from PDI-P, despite Golkar having
given the latter candidate his support. The turnout is estimated at 75 percent.
The first direct presidential election is held
In the country's first direct presidential election, former general Susilo
Bambang Yudhoyono, who is running for the newly formed Democratic Party (DP),
gets about a third of the vote. In his election campaign, Yudhoyono emphasized
the importance of stimulating the country's economy and fighting terrorism and
corruption. The second most votes are Megawati Sukarnoputri from PDI-P (just
over 26 percent), followed by Golkar's candidate General Wiranto (22 percent).
As no candidate gets 50 percent of the vote, Yudhoyono and Megawati will meet in
a second and decisive election round in September. The turnout is 78 percent.
Golkar wins the parliamentary elections
The secular party Golkar wins 128 out of 550 seats in the parliamentary
elections and becomes the largest party of the legislative assembly. Two come
with PDI-P with 109 seats, followed by the Muslim PPP (58 seats), the Democratic
Party (57 seats) and the two Muslim parties PAN and PKB, which receive 52 seats
each. The turnout is 84 percent.