Detailed Description of Indonesia

Contents:-

I. INTRODUCTION
II. LAND AND RESOURCES
    A. Climate
    B. Natural Resources
    C. Plants and Animals
III. POPULATION
    A. Population Characteristics
    B. Political Divisions

    C. Principal Cities
    D. Religion
    E. Language
    F. Education
    G. Culture
IV. ECONOMY
    A. Agriculture, Forestry, and Fishing
    B. Mining
    C. Manufacturing
    D. Tourism
    E. Energy
    F. Currency and Banking
    G. Commerce and Trade
    H. Labour I. Transport
    J. Communications
V. GOVERNMENT
    A. Executive and Legislature
    B. Political Parties
    C. Judiciary
    D. Local Government
    E. Health and Welfare
    F. Defence
    G. International Organizations
VI. HISTORY
    A. Early Kingdoms
    B. The Coming of Islam
    C. The Development of Dutch Influence
    D. The Consolidation of Dutch Control
    E. The Growth of Nationalism
    F. The Japanese Occupation
    G. The Post-War Struggle for Independence
    H. The Sukarno Regime
    I. Suharto’s Rise to Power
    J. The New Order
    K. The End of the Suharto Era
    L. Indonesia after Suharto


Description:-

I  INTRODUCTION

    Indonesia, Republic of, island republic and largest nation of South East Asia, constituting most of the Malay Archipelago and including all of the former Netherlands Indies. Indonesia comprises 13,677 islands straddling the equator, 6,000 of which are inhabited. From the island of Sumatra in the west to that of New Guinea in the east, Indonesia stretches across some 5,150 km (3,200 mi) of ocean, or almost one eighth of the Earth’s circumference; Indonesia’s north-south spread is about 1,931 km (1,200 mi). The republic shares the island of Borneo with Malaysia and Brunei Darussalam; Indonesian Borneo, equivalent to about 75 per cent of the island, is called Kalimantan. The western half of New Guinea is the Indonesian province of Irian Jaya (formerly West Irian); the eastern half is part of Papua New Guinea. Kalimantan and Irian Jaya, together with Sumatra (also called Sumatera), Java (Jawa), and Celebes (Sulawesi) are the largest islands of Indonesia and, together with the insular provinces of Kalimantan and Irian Jaya, account for about 95 per cent of its land area. The smaller islands, including Madura, Timor, Lombok, Sumbawa, Flores, and Bali predominantly form part of island groups. The Moluccas (Maluku) and the Lesser Sunda Islands (Nusatenggara) are the largest island groups. The marine frontiers of Indonesia include the South China Sea, the Celebes Sea, and the Pacific Ocean to the north, and the Indian Ocean to the south and west. Indonesia has a land area of 1,904,443 sq km (735,310 sq mi). The capital and largest city is Jakarta.

II  LAND AND RESOURCES

    A stretch of relatively open water (consisting of the Java, Flores, and Banda seas) divides the major islands of Indonesia into two unequal strings. The comparatively long, narrow islands of Sumatra, Java, Timor (in the Nusatenggara group), and others lie to the south; Borneo, Celebes, the Moluccas, and New Guinea lie to the north. A chain of volcanic mountains rising to heights of more than 3,568 m (12,000 ft) extends west to east through the southern islands, from Sumatra to Timor. The highest points of the chain are Kerinci (3,800 m/12,467 ft) on Sumatra, and Semeru (3,676 m/12,060 ft) on Java. Each of the major northern islands has a central mountain mass, surrounded by coastal plains. Puncak Jaya (5,030 m/16,503 ft), in the Sudirman Range of Irian Jaya, is Indonesia’s highest peak. The most extensive lowland areas are in Sumatra, Java, Borneo, and Irian Jaya.

    The volcanism that characterizes much of Indonesia reflects the fact that the country lies at the juncture of the Asian and Australian continental plates. At Flores island, west of Timor, the volcanic arc running west-east through the southern islands of Indonesia, meets another running north-south through Celebes and the Moluccas. Indonesia has about 220 active volcanoes and many more which are considered extinct. It is the site of the two greatest volcanic explosions in recorded history—Krakatau (or Krakatoa) and Mount Tambora. The volcanic island of Krakatau, lying between Java and Sumatra, erupted in 1883 destroying two thirds of its land area. The resulting tidal waves caused the deaths of tens of thousands of people throughout south-eastern Asia. The noise the explosion created travelled more than 4,830 km (3,000 mi), while the millions of tons of ash it threw into the Earth’s atmosphere caused spectacular sunsets worldwide for the next year or so. Tambora, on the northern coast of Sumbawa, erupted in 1815 blowing off its top half and killing an estimated 50,000 islanders. Earthquakes also occur: recent ones include the 1992 earthquake that struck Flores, killing 2,000 people; and two earthquakes on the island of Sumatra: one that struck in February 1994, killing 180 people, and one six years later, in June 2000, killing 90.

    Volcanic activity also, however, brings significant benefits to Indonesia. Volcanic ash and lava have enriched the soil in many areas, and there is a strong correlation between agricultural development, population density, and the location of volcanoes. Java has the greatest concentration of recently active volcanoes (22), and some of the richest soils and highest population densities in Indonesia.

A  Climate

    Indonesia’s climate is tropical, with two monsoon seasons—a wet season from November to March and a dry season from June to October. The weather is more moderate between monsoons. The northern islands have only slight differences in precipitation during the wet and dry seasons; the southern islands east of Java have more sharply defined dry seasons, which increase in length with proximity to Australia. Humidity is generally high, averaging about 80 per cent yearly; the daily temperature range (about 20° to 32° C/about 70° to 90° F at Jakarta) varies little from winter to summer. Rainfall in the lowlands averages about 1,780 to 3,175 mm (about 70 to 125 in) annually; in some mountain regions it reaches about 6,100 mm (240 in).

B  Natural Resources

    The rich volcanic soil of Indonesia is ideal for crops and many varieties are grown. Indonesia has the world’s largest tropical forest reserves outside the Amazon. Logging has been intensive in some areas, notably Kalamantan, but forests still cover about two thirds of the total land area. Tin, bauxite, oil, natural gas, copper, nickel, and coal are major mineral resources; small amounts of silver, diamonds, and rubies are also found. Salt-water fish are abundant, and the surrounding seas also yield pearls, shells, and agar, a seaweed extract.

C  Plants and Animals

    Indonesia has some 40,000 species of flowering plants—a richer variety than the African or American tropics—including some 3,000 trees, 5,000 orchids, and the world’s largest (and possibly smelliest) flower, Rafflesia arnoldii, or the corpse lily. Tropical rainforest vegetation prevails in the northern lowlands of Indonesia. Mangrove trees and nipa palm dominate the forested lowlands of the southern islands. The hill forests consist of oak, chestnut, and mountain plants.

    Indonesia is located in the transitional zone between two of the world’s major faunal communities—the Asian and the Australian. The dividing line between the two, known as Wallace’s Line, runs from east of Borneo in the north to east of Bali in the south; on Celebes and the Moluccas, both Asian and Australian types can be found. To the west of the line, the Asian animal community includes the rhinoceros, elephant, tiger, tapir, orang-utan, and various species of gibbon and monkey. To the east, Australian types include various species of cockatoo, bowerbirds, and birds of paradise; the echidna; and marsupials like the bandicoot and cuscus (phalanger). Many species are specific to a single island, or group. The orang-utan is found only in Sumatra and Borneo; the tiger, in Sumatra and Java; the wild ox, in Java and Borneo; the proboscis monkey, only in Borneo; the elephant, the tapir, and the siamang (black gibbon) are found only in Sumatra. All of the islands abound in birds, reptiles, and amphibians. The world’s largest lizard, the Komodo Dragon, lives on the island of that name, to the east of Flores. Like other endemic species, the Komodo Dragon is rare. Many species are also high on the endangered list, including the orang-utan and the two species of rhinoceros—the Javan and Sumatran. Such animals today are found almost exclusively in reserves and national parks.

III  POPULATION

    Indonesia’s position as a point of juncture between Asia and Australasia and as a focus of diversity is reflected in its human population as well as its fauna. The islands contain people of more than 330 ethnic groups, speaking 250 distinct languages; adherents of all the world’s major religions are found, as well as a variety of indigenous ones. However, some broad categories can be distinguished. The majority of the population is related to the peoples of East Asia, with considerable mixing over the centuries with people of Arab, Indian, and European stock. This population is concentrated in the islands west of, and including, Celebes and Flores. The population of the islands to the east of this line is predominantly of Melanesian origin (see Melanesia).

    Within the western islands, three broad ethno-cultural groupings can be discerned. The first two are predominantly of mixed Malay origin. They are the inland wet rice-growing peoples who have been historically dominant and who make up two thirds of the national population; and the coastal peoples. The former include the Javanese, Mudarese, Sundanese, and Balinese; the latter, the Malays of Sumatra and the Makasarese of southern Celebes. The third group are the indigenous tribal peoples of Austronesian origin, including the Dayak of Borneo and the Toraja of Celebes, who tend to live in small groups and practise shifting cultivation. Important ethnic groups who do not fit into these divisions include the Batak and Mimangkabua of Sumatra, and the Minahasa of Celebes.

    The eastern islands contain many distinct ethnic groups, the main cultural division is between the coastal peoples and the interior or “bush” peoples. In the Moluccas, the coastal peoples include the Ambonese, while those of the interior include the Alfur. In Irian Jaya, the indigenous Papuans of the interior, helped by their isolation, have retained a culture that is highly distinctive from that of other Indonesians. The coastal Papuans have mixed with Indonesians from other islands and have closer cultural affinities with those of neighbouring Melanesian peoples to the east and south of Irian Jaya.

    The largest non-indigenous group in Indonesia is the Chinese; most Chinese have been in the country for generations and the community has developed distinct local dialects and customs. The Chinese community, which has historically dominated the business sector, makes up about 3 per cent of the total population and lives mainly in urban areas. The Dutch settler population, estimated at about 60,000 in the late 1950s, has declined to fewer than 10,000.

A  Population Characteristics

    Indonesia has a population (2001 estimate) of 228,437,870. The average population density is 120 people per sq km (311 per sq mi). Indonesia is the fourth most populous country in the world. More than 60 per cent of the population lives on Java, Madura, and Bali which are among the world’s most densely populated areas; 39 per cent of the population is urban. In 1995 Sumatra had an estimated 41 million inhabitants; Celebes had about 13.8 million. In an effort to control overpopulation on the main islands, the government in 1969 introduced a policy of internal migration, or transmigrasi. More than 3.5 million people have been moved under the scheme to sparsely populated provinces like Sumatra, Kalimantan, Irian Jaya, and East Timor. Although the settlers have brought new skills and created new jobs, the transmigrasi programme has been criticized for its potentially disastrous effects on the traditional cultures of the outlying islands.

B  Political Divisions

    Indonesia is divided for administrative purposes into 26 provinces, including 2 special regions (Yogyakarta and Aceh) and the special capital city district of Jakarta Raya. In addition to the three special territories, Java is divided into Jawa Barat (West), Jawa Timur (East), and Jawa Tengah (Central). Sumatra has seven provinces in addition to its special territory: Sumatera Utara (North), Sumatera Selatan (South), Sumatera Barat, Jambi, Riau, Bengkulu, and Lampung. The island of Celebes is divided into four provinces: Sulawesi Utara, Sulawesi Tengah, Sulawesi Selatan, and Sulawesi Tenggara (South-east). Kalimantan on Indonesian Borneo is also divided into four provinces: Kalimantan Barat, Kalimantan Tengah, Kalimantan Selatan, and Kalimantan Timur. Bali, Irian Jaya, and the Moluccas (Maluku) each comprise one province; the Lesser Sunda Islands are divided into Nusatenggara Barat and Nusatenggara Timur.

C  Principal Cities

    Two of Indonesia’s largest cities are located on Java. Jakarta, with a population of 7,764,764 (1997 estimate), is the capital and chief commercial centre. Surabaya, population 2,351,303 (1997 estimate), a port and the capital of Jawa Timur (East Java) province, is Indonesia’s second city. Bandung, 3,557,665 (1997 estimate), an industrial centre and the Sundanese cultural centre, and the port of Semarang, 812,979 (1997 estimate), are the other main Javanese cities. Medan, 1,974,300 (1997 estimate), is the largest city of Sumatra and the capital of Sumarera Utara (North Sumatra) province; the trading centre of Palembang, 1,436,500 (1997 estimate), in the south-east, is the island’s second city. Ujung Pandang (formerly Makassar), 1,252,245 (1997 estimate), is the largest city and chief port of Celebes, while Banjarmasin, 546,466 (1997 estimate), is the largest city of Indonesian Borneo, or Kalimantan. Other large cities are Malang and Surakarta on Java, Padang on Sumatra, and Kupang on Timor; the largest city of the Moluccas is Ambon on Amboina Island.

D  Religion

    Freedom of religion is guaranteed by the constitution. Indonesia has been influenced by most of the world’s major religions, which were first introduced in coastal areas and spread inland. Islam in various forms is the faith of about 87 per cent of the population, and Indonesia is the world’s most populous Muslim nation. Christianity is the largest of the minority religions with about 17 million adherents, or almost 9 per cent of the population; about two thirds of the population is Protestant. The main centres of Christianity are the island of Flores and Minahasa in northern Celebes, where more than 80 per cent of the population are Christian; in the central and southern Moluccas, and in the Mentawai Islands off the west coast of Sumatra, about 50 per cent of the population are Christian. Buddhism is practised by about 1 per cent of the population, most of whom are of Chinese background. Hinduism, once the predominant religion, is now practised by only about 2 per cent of the population, principally in Bali; however, Hindu influences remain strong within wider Indonesian culture and society. Indigenous religions are still practised in more remote areas.

E  Language

    Some 250 distinct languages are spoken in Indonesia. West of New Guinea, the majority belong to the Indonesian branch of the Malayo-Polynesian, or Austronesian language group. The most widely used of these languages is Javanese, with more than 80 million speakers. The main exceptions are Irian Jaya on New Guinea, where Papuan languages are used, and parts of the Moluccas, where the North Halmahera language family is found, named after Halmahera Island. Bahasa Indonesia is the official language and most widely spoken tongue, acting as a lingua franca and an important unifying force. It is based on an eastern Sumatran dialect of Malay, long the market language of coastal towns, and contains elements of Chinese, Dutch, Portuguese, English, and Indian languages. In 1972 Indonesia and Malaysia agreed to introduce a revised uniform spelling of Bahasa Indonesia to improve communications. (See also Indonesian Languages.)

F  Education

    Before independence, access to primary and secondary education was limited; university-level education was almost non-existent. Since 1949, successive governments have laid great emphasis on education. Today almost all children enter primary school, and approximately 98 per cent of Indonesians aged 15 or older are literate. According to Indonesian law, all children are required to attend at least six years of primary school. Primary schooling is followed by three years each of junior and senior secondary school. The country’s school system is patterned after that of the Dutch. Curricula at all levels are divided into general, vocational, technical, and agricultural subjects.

    In 1994-1995 over 29.7 million Indonesian children attended state primary schools. In 1993 more than 5.5 million students were enrolled in junior secondary schools, and 3.8 million in senior secondary and vocational schools, and higher training and sports’ teacher-training institutes.

    In 1993 Indonesia had 49 state and 1,122 private universities and technical institutes attended by nearly 2 million students per year. Institutions with the largest enrolments include the University of Indonesia (1950), in Jakarta; Padjadjaran State University (1957), in Bandung; and Gajah Mada University (1949), in Yogyakarta.

G  Culture

    Indonesian culture is an intermixture of many diverse civilizations. Hinduism and Buddhism, which arrived from India during the early first century ad, have exerted a profound and continuing influence on Indonesian life, and left a strong imprint on art, music, and dance, as well as the architecture and sculpture of the country—this last is seen most notably in the temple and palace complexes of Java and Bali. The Arabic influence in Indonesia has been felt since the 13th century, mainly through the teachings of Islam. The islands have also been affected by South East Asian and Polynesian cultures, as well as by the influx of Chinese and Dutch peoples (see also Batik; Borobudur; Indonesian Dance; Indonesian Music).

    Indonesia has about 20 major libraries, which are located primarily in the cities of Bandung, Bogor, Jakarta, and Yogyakarta. The National Archives and the Library of the National Museum (360,000 volumes) are in Jakarta, as is the National Library (750,000 volumes), which includes a number of special collections. The Bali Museum is in Denpasar.

IV  ECONOMY

    Indonesia is a rapidly industrializing country with a mixed economy in which the state plays an important role. Today, as in the past when it was the focus of the lucrative spice trade, Indonesia’s wealth is derived largely from exports of raw materials. Now, however, minerals—dominated by oil and natural gas—have replaced agricultural products as the main source of export income. Agricultural exports still include spices, but are otherwise the plantation products that came to sustain the economy under Dutch colonial rule, including rubber, coffee, tea, and quinine; timber production is also important.

    In the early 1960s, under the leadership of Sukarno, the government nationalized foreign-owned enterprises as part of moves to institute a planned economy. Sukarno’s aggressive anti-Western stance was reversed in the late 1960s by his successor, Suharto. Under Suharto’s New Order, a liberal market economy was introduced with an expanding private sector, supported by oil and natural gas revenues, large-scale foreign aid and investment, and state economic planning. The Indonesian economy had verged on bankruptcy in 1966, with annual inflation running at almost 700 per cent and foreign debts of almost US$2,500 million. In the years since 1970, however, it has shown remarkable recovery. Inflation is under 6 per cent, and real economic growth has averaged 7 per cent a year over the period—although the growth rate has slowed since 1980 due to the decline in world commodity prices. There has been major investment in education, infrastructure, agriculture, and manufacturing capacity. Since 1980 the priorities have been economic diversification, more jobs, higher food production, and more equitable income distribution. The emphasis on economic diversification has intensified in the 1990s to provide an alternative to oil export revenues, which look set to decline as a result of rapidly rising domestic energy demand.

    Indonesia’s hitherto steady growth was suddenly undermined by the Asian financial crisis of the late 1990s. The healthy economic growth rate of 7.5 per cent in 1996 slumped in 1997, as international investment was withdrawn from Indonesia. Investors became concerned over structural problems in the economy, while currency speculators attacked the Indonesian rupiah, forcing its value to drop dramatically. The International Monetary Fund (IMF) rescue plan set up to bolster the economy had stringent reform provisions attached, which the government sought repeatedly to renegotiate. By January the rupiah’s value had dropped dramatically and the Indonesian financial sector appeared ready to collapse. The economic crisis, and especially the withdrawal of subsidies on food prices in line with IMF terms, was the catalyst for the violence and political change of May 1998.

    The service sector—including financial services, social services, government departments, trade, and transport and communications—is the largest single sector, accounting for over 42 per cent of gross domestic product (GDP) and about 34 per cent of employment in 1993. Of this total, trade, hotels, and restaurants are the largest contributor, with 17 per cent of GDP.

    Notwithstanding the many positive changes since 1970, Indonesia continues to face a number of challenges. The majority of the population remains largely dependent on agriculture and average income levels are relatively low. According to statistics supplied by the World Bank, Indonesia is still grouped as a low-income country. In 1999 Indonesia’s gross national product (GNP) was estimated at US$125 billion (World Bank), giving an average income per head of about US$600. And, despite government aims to improve income distribution, economic development has largely been concentrated on the main islands focused around Java. Many of the more peripheral islands, such as Irian Jaya and northern Sumatra remain impoverished. Indonesia’s foreign debt, estimated at US$96,500 million in 1994, is also still a problem; repayments eat up almost one third of export revenues and are a heavy drain on the budget. By law, the Indonesian budget must balance, although in practice there is often a deficit; the revenue and expenditure for 1997-1998 were estimated at about US$41,500 million.

A  Agriculture, Forestry, and Fishing

    About 17 per cent of Indonesia is under cultivation. Intensive cultivation, especially of wetland rice, is largely restricted to Java, Bali, Lombok, and certain areas of Celebes and Sumatra. In most of Sumatra and the outlying islands cultivation is extensive and either for subsistence or plantation-based cash crops; almost 50 per cent of the plantation area is on Sumatra. Agriculture (including forestry and fishing) contributes about 19.5 per cent of GDP, and is the source of most non-mineral export earnings. About 45 per cent of the country’s labour force (1994 figures) is engaged in agriculture, either as small-scale farmers or as labourers on plantations. The small farms produce most of the subsistence crops, as well as a substantial proportion of the nation’s rubber and tobacco crops, and lesser amounts of other cash crops. Plantation estates produce rubber, tobacco, sugar, palm oil, coffee, tea, and cacao, mostly for export. Indonesia is one of the world’s largest producers of rubber, coffee, cacao, soya beans, and rice.

    Rice is the major staple food of the country. The output of rice, and other food crops, has risen dramatically since the 1970s, helped by the provision of subsidized fertilizers and insecticides. Annual rice production in 2000 was about 51 million tonnes. Most of the rice is grown on Java. Other important crops (2000 figures) are cassava (15.4 million tonnes), maize (9.17 million tonnes), sweet potatoes (2 million tonnes), coconuts (1994; 14.8 million tonnes), sugar cane (21.4 million tonnes), soya beans (1 million tonnes), peanuts (1,000,000 tonnes), tea (152,063 tonnes), tobacco (137,564 tonnes), and coffee (432,000 tonnes). About 1.3 million tonnes of rubber were produced in 1994. In 2000 the country had about 15.2 million goats, 12.2 million cattle, 8 million sheep, 3.15 million water buffalo, 10.1 million pigs, and 1,028 million poultry. Increases in production have also been encouraged by the development of farm cooperatives and agricultural banks. Large quantities of food, however, including rice, must still be imported, mainly because of Indonesia’s high population growth. High population growth is also causing problems in land ownership and the size of holdings. In the most densely populated islands, like Java, there is not enough land to go round, while the practice of dividing holdings among sons is creating sub-economic plots, incapable of sustaining a family.

    About two thirds of Indonesia is covered with forest and woodland, most of which is concentrated in Borneo, Sumatra, and eastern Indonesia. Almost all forest land is owned by the state. Roundwood production totalled about 193 million cu m (6.82 billion cu ft) annually in 1999. Almost all the timber harvest is made up of hardwoods, around 80 per cent of which is used for fuel. In addition, valuable industrial woods are produced in significant quantities, including teak, ebony, bamboo, and rattan. Timber is now Indonesia’s largest single export, after oil and natural gas; the country is the world’s top exporter of plywood.

    Although about one third of the forest area has been scheduled for preservation for national parks and watersheds, there has been a rapid increase in the loss of forest cover since the 1970s. Commercial logging, often by foreign-owned firms is the main cause of this loss—particularly on Sumatra and Kalimantan, where the loss of all lowland forest by about 2010 has been predicted by conservationists. Large numbers of trees are also being cut down for fuelwood, and to clear land for agriculture and industrial and housing developments. In an attempt to counter the depletion, the government has initiated a reforestation programme.

    Fish is vital to the Indonesian diet, with much of the annual catch brought in by those who fish part-time at a subsistence level. In 1997, the sea fisheries catch was about 2.91 million tonnes; the total fish catch was about 4.40 million tonnes. The chief fish caught include carp, tuna, mackerel, scad, and sardines. Shrimp and prawns are also important to the fishing industry.

B  Mining

    Mining employs less than 1 per cent of the labour force, but contributes more than 10 per cent of GDP, and more than two thirds of export earnings. Oil, natural gas, tin, bauxite, nickel, copper, coal, manganese, and iron ore are Indonesia’s principal mineral resources. Oil has been exploited in Indonesia for some 30 years. Production increased dramatically after 1970 and today Indonesia is ranked among the world’s leading oil producers. Output in 1995 was about 586 million barrels; proven reserves were about 8,500 million barrels. Sumatra is the main oil-producing area of Indonesia; other fields are located on Kalimantan and offshore Java. The output of natural gas was approximately 66.3 billion cu m (2.34 trillion cu ft) in 1999. Production began in 1976 and Indonesia is now the world’s largest exporter of liquefied natural gas (LNG).

    Indonesia also remains, with Brazil, the largest producer of tin in the world, with production amounting to about 47,754 tonnes in 1999. The annual output of other economically important minerals in 1999 was: 1.12 million tonnes of bauxite, 64.6 million tonnes of coal, 2.5 million tonnes of nickel ore (1995), 739,685 tonnes of copper, and 310,000 tonnes of iron ore. Tin production is concentrated on Bangka, Belitung, and Singkap islands near Sumatra; nickel on Celebes, Irian Jaya, and in the Moluccas. Bauxite is mined in the Riau Islands, east of Sumatra, and in western Kalimantan. Coal is mined in southern and western Sumatra; copper in Irian Jaya.

C  Manufacturing

    Manufacturing in Indonesia contributed more than 25 per cent of GDP in 1999 and employed about 11 per cent of the population in 1993. Industrial expansion and diversification remain a major goal of government development programmes. The majority of enterprises are devoted to processing local raw materials, like the petroleum-refining, tobacco, plywood, and food-processing industries, or to import substitution. Industries in this latter category include textiles and clothing, chemicals and fertilizers, radios and television sets, and motor vehicles; almost all rely heavily on imported inputs. Manufacturing is concentrated on Java, and dominated by large, state-owned firms. However, the number of small- and medium-size privately owned companies is growing rapidly, and is responsible for a significant proportion of manufacturing.

D  Tourism

    Helped by heavy government investment in hotels and transport networks, tourism developed into one of Indonesia’s most important and fastest-growing economic sectors during the late 1980s. Between 1986 and 1995 the number of visitors increased by an average 24 per cent a year, to more than 4.3 million. Earnings from tourism brought in around US$5,200 million in 1995. About 30 per cent of visitors come from Singapore and 13 per cent from Japan; the most popular destinations are Java, Bali, and Sumatra.

E  Energy

    About 8.39 per cent of Indonesia’s electricity is generated in seven hydroelectric plants; virtually all the rest is produced in coal or oil-fired thermal installations. In 1993 Indonesia had an installed electricity generating capacity of about 9 million MW; and yearly output was about 45 billion kWh.

F  Currency and Banking

    The monetary unit of Indonesia is the rupiah of 100 sen (9,510.0 rupiah equal US$1; 2001). Severe currency depreciation reduced the rupiah’s value; previously 2,398 rupiah had equalled US$1 in 1997. The Bank Indonesia is the country’s central bank. About three dozen national and regional banks extend credit to commercial and manufacturing enterprises. The country also has 117 commercial banks, including foreign bank branches, dominated by seven state-owned banks that provide specialized services to small holders, plantations, industry, forestry, mining, and exporters. Seventy commercial banks are locally privately owned.

G  Commerce and Trade

    Since 1964 virtually all of Indonesia’s import and export trade has been conducted by state-owned trading companies. The leading exports include crude oil, refined petroleum and petroleum products, liquefied natural gas, plywood, and textiles. Other important exports are rubber, coffee, tin, palm oil, tobacco, tea, cloves, and pepper. Principal imports included machinery and transport equipment, electrical equipment, chemicals, rice, iron and steel, and pharmaceuticals. Indonesia’s principal trading partners are Japan, the United States, Singapore, Germany, Taiwan, and South Korea.

    Indonesia normally achieves a surplus on the balance of trade or visibles account of the balance of payments; in 1999 export earnings were about US$48,665 million, while import costs were around US$24,004 million. However, the invisibles account, which covers non-trade payments and receipts, has been in substantial deficit for decades, mainly because of the high cost of debt repayments. The deficit on invisibles is much larger than the surplus on visibles, so the current account of the balance of payments, which combines the two, is also in deficit. In 1995 the current account deficit was about US$7,000 million.

H  Labour

    Since the beginning of the Indonesian labour movement in 1908, trade unions have been active. Strikes are formally forbidden by law, but occur fairly frequently and workers have a constitutional right to organize. About 40 per cent of workers are unionized; the majority belong to unions affiliated to the All-Indonesia Union of Workers, which was founded in 1973 and is recognized by the government. The Setia Kawan (Solidarity) Free Trade Union was founded in 1990 by the Indonesian Institute for the Defence of Human Rights; it is not recognized by the government. The 40-hour working week has been established as the standard throughout Indonesia. Wages are regulated by arbitration. Legislation regulates and sets standards for child labour, women in industry, work conditions, hours of work, and holidays.

    In 1994, 76.7 million people were estimated to be in employment—around 45 per cent in agriculture, 11 per cent in manufacturing, and 34 per cent in the service sector, including transport and public services. Unemployment is a significant problem only on the most developed and urbanized islands like Java; elsewhere most people live a subsistence lifestyle and underemployment is the main problem. Even on densely populated Java, the effects of unemployment and job shortages are limited by the practice of job sharing—a number of people do a job that would normally take only one or two. This system encompasses virtually all sectors, from the civil service to university lecturers, artisans, and petty traders, and enables most people to earn a basic living.

I  Transport

    Well-maintained shipping services are vital to the economy of an island nation like Indonesia. The Dutch withdrew equipment and personnel at the start of the nationalization programme in 1958, badly damaging this crucial network. The rebuilding and development of shipping facilities progressed slowly at first, but has made significant strides since the 1980s. Indonesia has almost 400 ports, 4 of which have been designated entry ports for international trade. Located near Jakarta and Surabaya on Java, near Medan on Sumatra, and at Ujung Pandang on Celebes, these entry ports are supported by 15 collector ports located around Indonesia.

    Other transport facilities are not so well developed, particularly on the outlying islands, which has hampered their economic development. In 1998 Indonesia had about 346,863 km (215,531 mi) of roads, approximately 46 per cent of which were paved. The majority of paved roads and only adequate modern road networks are on Java, Bali, and Sumatra; many of the more remote outer islands rely on tracks and river canoe for internal communications. To improve road communications, trans-island highways are being built on Celebes and Kalimantan. In 1995 Indonesia had 1.89 million cars and 1.9 million larger vehicles, or 1 vehicle per 51 people.

    Indonesia has some 6,450 km (4,007 mi) of railways, all on Java, Madura, and Sumatra. The national air carrier is the state-owned Garuda Indonesian Airways; Mepati Nusantara Airways is Garuda’s domestic subsidiary. Several privately owned companies also provide domestic passenger and freight services. As part of efforts to increase tourism, the government has implemented a major airport upgrading programme since the mid-1980s. International airports now serve Jakarta and Surabaya (Java), Medan (Sumatra), Manado and Ujung Pandang (Celebes), Denpasar (Bali), Biak (Irian Jaya), and Batu Ampar (Batam).

J  Communications

    In 1997 more than 4.9 million telephones were in use in Indonesia. Radio Republic Indonesia, the state-owned system, operates 49 stations serving approximately 32 million receivers; there are also many commercial radio stations. The government-controlled television broadcasting system, Televisi Republika Indonesia, which began operations in 1962, reaches some 14 million receivers, including around 55,000 publicly financed village television sets. Private commercial television broadcasting began in 1989; by the late 1990s there were five private stations. The most important of Indonesia’s estimated 69 daily newspapers are published in Jakarta. Average circulation of the dailies is around 5 million. The papers with the largest circulations include Kompas, Pos Kota, and Berita Buana.

V  GOVERNMENT

    Indonesia is a constitutional republic. It proclaimed its independence from the Netherlands in 1945, and in 1949 the Netherlands recognized the sovereign Republic of the United States of Indonesia. The following year Indonesia’s federal system was abolished, and the country became a unitary republic.

    Three provisional constitutions defined the form of Indonesia’s government. The first one was proclaimed in 1945; the second one was issued in February 1950; and the third one was passed by the provisional House of Representatives in August 1950. In 1959 the constitution of 1945 was reinstated by presidential decree.

    Indonesia’s fragmented physical nature, its size, and ethnic diversity have made the creation and maintenance of national unity a government priority. To this end, the constitution establishes the concept of Pancasila, or the “Five Principles”, as Indonesia’s governing philosophy. The five principles, or sila, are: belief in one supreme God; just and civilized humanity; the unity of Indonesia; democracy, guided by the wisdom of unanimity rising from discussion (musjawarah) among elected representatives and mutual assistance (gotong royong); and social justice for all citizens, including equality of political rights and of citizenship, as well as social and cultural equality. Since 1985 all social and political organizations have been required to adopt the Pancasila principles as their basic platform.




A  Executive and Legislature

    Under the 1945 constitution the chief executive of Indonesia is a president, elected to a five-year term by the People’s Consultative Assembly, or Majellis Permusyawaratan Rakyat (MPR), which includes the parliament and is Indonesia’s highest state authority, according to the constitution. The president, who may serve any number of terms, has very wide powers and can govern by decree. The president can appoint members of the MPR, and appoints and presides over a Cabinet of ministers. Indonesia has had four presidents since independence—President Sukarno from 1945 until 1968, President Suharto from 1968 to 1998, Jusuf Habibie, the first-ever civilian president, from 1988 to 1999, and President Abdurrahman Wahid.

    Legislative power in Indonesia is vested in the House of Representatives, the Dewan Perwakilan Rakyat (DPR), which must approve all statutes and has the right to submit draft bills for ratification by the president. The DPR is made up of 400 members elected every five years and 100 members appointed by the president. The MPR is composed of all the members of the DPR plus 500 representatives of functional groups (such as farmers, the armed forces, business people, intellectuals, workers, students, and women) and the country’s regions. The main functions of the MPR are to elect the president and vice-president, and to determine the constitution and the broad lines of state and government policy. The constitution requires that the MPR meets at least every five years and that the DPR convenes once a year. The MPR operates by consensus, not voting along party or factional lines. Under the constitution it is the embodiment of the ancient Indonesian, and especially Javanese, traditions of musajawarah (discussion) and musfakat (agreement)—whereby personal, political, and policy differences are resolved by extended debate resulting in a unanimous decision.

B  Political Parties

    Between Indonesia’s first general election in 1955, and its second, in 1971, party politics in Indonesia were suspended and replaced by President Sukarno’s concept of “Guided Democracy”. Since the return of party politics, Indonesian political life has been dominated by Sekber Golkar, or the Joint Secretariat of Functional Groups. Founded in 1964 and in power since 1971, Golkar is not a political party in the traditional sense. Rather it is an alliance representing various interest groups, including the armed forces, farmers, fishers, the professions, and women. Since the 1970s the armed forces have been the dominant functional group within Golkar.

    In 1972 nine small political parties amalgamated to form two parties—the Indonesian Democratic Party (PDI), formed by the merger of five nationalist and Christian parties; and the United Development Party (PPP), a merger of four Islamic parties. Since 1973 the PDI and PPP have been the only legal opposition parties; in practice they operate as junior “partners of government”, in line with the tradition of consensus. In 1991 following popular demands for more openness, the Democratic Forum and the League for Restoration of Democracy were formed to promote freedom of expression.

    As part of the concern to maintain national unity, the law requires that the membership of a political party must cover at least 25 per cent of Indonesia. However, the historical domination of Java within Indonesia has tended to carry through into contemporary politics; Javanese have been particularly prominent in the leadership of Golkar. Opposition to the domination of Java, to the centralist policies which have been a result of the preoccupation with national unity, and to the transmigration programme has led to the development of three political groups in conflict with the government. On New Guinea, the nationalist Free Papua Movement (OPM) has sought unification with Papua New Guinea since Irian Jaya was made part of Indonesia in 1969.

C  Judiciary

    Civil and criminal cases are tried by district courts situated throughout Indonesia. Appeals are heard by high courts located in 14 major cities; the final court of appeal is the Supreme Court in Jakarta. One codified criminal law applies to all Indonesia. In civil cases, however, Indonesians are tried under the uncodified customary law (Adat law). Muslims can choose to appear before a Shar’iah or secular court; westerners and Asians of foreign origin or ancestry are held to a system based on continental European civil codes.

D  Local Government

    Indonesia is divided into 26 provinces, 3 of which have the status of special territories—the capital, Jakarta; Yogyakarta on Java; and Aceh on Sumatra. Each province is administered by a governor and a provincial assembly, who elect the governor subject to presidential approval. Within the provinces are 246 districts and 55 municipalities, headed respectively by district heads and mayors. At still lower levels, there are 3,592 subdistricts, and 66,594 villages. Each local government level has its own legislative and administrative bodies.

    Supporting the modern administrative system is the traditional one of gotong royong, or mutual responsibility and cooperation, which focuses around village councils led by a headman. Like the MPR, the village councils work by consensus, implementing mutual aid and village improvement programmes, and operating as the grass roots channel for government policies.

E  Health and Welfare

    Poor diet, overcrowded housing, lack of sanitation, and impure water contribute to the serious health problems that face Indonesia. The government has instituted a variety of programmes for raising health standards, and remedying social problems like drug addiction. A prime concern has been reducing population growth, particularly on the main islands; an active family planning programme has contributed to a sharp decline in fertility in recent years. Life expectancy at birth in 2001 was 66 years for men and 71 years for women. Infant mortality has been halved in the years since 1965 to 41 per 1,000 live births in 2001. In 1992 Indonesia had about 25,135 doctors (1 per 7,402 people) and more than 120,000 hospital beds.

F  Defence

    The armed forces of Indonesia were unified in 1967 and placed under the administration of the Ministry of Defence and Security. The constitution enshrines the dual military and socio-economic role of the armed forces, and since the late 1960s they have exercised decisive political authority. From the late 1980s their influence was more indirect and low key, though they were instrumental in the end of the Suharto regime in 1998. The country’s army, navy, and air force have a total of 297,000 troops; 27,000 in the air force, 230,000 in the army, and 40,000 in the navy.

G  International Organizations

    Indonesia is a member of the UN, the Association of South East Asian Nations (ASEAN), the Organization of Petroleum Exporting Countries (OPEC), and the Asia-Pacific Economic Cooperation (APEC) forum.

VI  HISTORY

    Remains of one of the earliest forms of human life (Pithecanthropus erectus, or Homo erectus, known as Java Man and Solo Man) have been found in central Java. Only a few sites of human settlement from Palaeolithic and Mesolithic times (Old and Middle Stone ages) have been excavated; crude stone implements, such as the rectangular axe, and rock paintings in caves on the eastern islands are the main remains that have been found. The first of the many migrations that have created the mixture of more than 200 ethnic and linguistic divisions in the archipelago began about 40,000 years ago. During the Neolithic period, until about 1000 bc, Proto-Malay peoples arrived in the islands from the Asian mainland, and are considered to be the ancestors of much of Indonesia’s present population. There is a major cultural difference between the coastal peoples and the interior groups. Two thousand years ago some of the coastal peoples had already developed irrigated wet-rice (sawah) cultivation, but until recently many in the interior still depended on shifting, slash-and-burn agriculture (ladang). Indian chronicles mention Java as early as 600 bc. Bronze was introduced into the archipelago about 300 bc from northern Vietnam, Thailand, or China, and from that time on both bronze working and ironworking were practised. Before the penetration of Indian influences in the early centuries of the Christian era, many of the peoples of the islands lived in largely family-based small political groups. Such cultural traditions as the wayang (shadow puppet) theatre, the gamelan orchestra, and the textile design technique of batik may also pre-date Indian influences.

    The earliest written records of trade between the Bay of Bengal and Indonesia date from the 1st and 2nd centuries ad although contact may pre-date this period. Most historians now discount earlier theories of Indian military conquests or extensive migration into the region attributing the introduction of Hinduism to Brahmins invited to the courts of Indonesian feudal lords. Indian culture, however introduced, exerted a powerful influence on the political, cultural, social, and religious character of the states that developed in the archipelago—although much of this influence was limited to the ruling classes and coastal areas. Direct communication with China probably began about the 3rd century ad, with Indonesian exports of cloves, tree resins, and camphor. In the early 5th century Faxian (Fa-hsien), a Chinese Buddhist pilgrim, and the princely monk Gunavarman from Kashmir wrote of direct voyages between western Indonesia and China.

    Sanskrit inscriptions on Java and eastern Borneo, dating from the middle of either the 5th or 6th century, reveal that Hindu intellectuals were honoured in some royal courts. The Java inscriptions also show the existence of the extensive Javanese kingdom of Taruma (centred near present-day Jakarta) which observed Hindu religious rites and promoted irrigation works. Buddhist influences were also well established in some areas by the 7th century. By the beginning of the 7th century several important, mainly coastal, kingdoms existed on Java; the coastal Sri Vijaya Buddhist kingdom was also well established on the south-eastern coast of Sumatra.

A  Early Kingdoms

    By the 7th century two principal types of political units had emerged in the archipelago: the maritime trading states along the coasts of Sumatra, north Java, Borneo, Celebes, and some of the other eastern islands; and the rice-based inland kingdoms, particularly of east and central Java. The greatest maritime empire was Sri Vijaya, a Mahayana Tantric Buddhist kingdom centred on the city of Palembang on Sumatra’s south-eastern coast, which by the late 7th century was a centre of trade with India and China and for some 500 years more or less monopolized China’s trade with the western archipelago.

    Little archaeological evidence of the Sri Vijayan Empire remains on Sumatra although there is considerable written evidence, notably in the works of the 7th century Chinese Buddhist pilgrim Xuanzang (Hsuan-tsang). The Hindu-Buddhist kingdoms of central and eastern Java, however, left extensive temples, buildings, and inscriptions dating from the 8th and 9th centuries onwards as evidence of the extent of Indian cultural influences on their religion and state organization. All these Javanese kingdoms were based on wet-rice agriculture and had a complex hierarchical administrative organization headed by a god-king. Inscriptions reveal that under the Sanjaya family the Hindu kingdom of Mataram flourished on the Dieng Plateau in the early 8th century. In the second half of the century a Buddhist kingdom under the Sailendra dynasty developed in the nearby Kedu Plain. Although Saitendra influence was probably limited to central Java, the wealth generated by the kingdom’s agricultural surpluses was great enough to finance the construction of vast religious buildings. The monuments of the Kedu Plain are the most famous in Indonesia. Most impressive of all is the massive temple monument of Borobudur built between the late 8th and mid-9th centuries. By this time rulers claiming descent from King Sanjaya (reigned 732-778) of central Java had founded the kingdom of Mataram. In the early 10th century, for unknown reasons, inscriptions and monuments in central Java cease. The only evidence for developments on the island comes from the east. Under Sindok (reigned 929-947), and in about 1035 united with Bali under Airlangga, east Java evidenced growing interest in overseas trade. After a period of division, dominated by the Kediri Kingdom, the new kingdom of Singosari was founded on Java in 1222 by a commoner, Angrok (reigned 1222-1227). Under the Buddhist king Kertanagara (reigned 1268-1292) Java’s ascendancy was asserted over Sumatran areas formerly ruled by Sri Vijaya. Kertanagara’s successor, Vijaya (reigned 1293-1309), repelled a Mongol invasion of Java and founded Majapahit (see Majapahit, Kingdom of), the greatest Javanese empire, in 1293. Majapahit, under Hayam Wuruk (reigned 1350-1389), reached its zenith, claiming sovereignty over much of what is now Indonesia and parts of Malaya.

B  The Coming of Islam

    Indian and Arab Muslims had traded with Indonesia for many centuries, but substantial evidence of the arrival of Islam in the islands dates from the late 13th century. At this time the coastal northern Sumatran states were beginning to accept Islam; the earliest known Muslim ruler there was Sultan Malik al Saleh of Pasai. Propagated by merchants attracted by the gold and forest products of the Sumatran hinterland, and by spices from southern India and Gujarat, the new religion spread slowly until the rise of the sultanate of Malacca (Melaka, see Malacca, Kingdom of) on Malaya’s west coast gave it a powerful impetus. During the 15th century European demand for spices from the Moluccas, or Spice Islands, was growing, and by 1436 Malacca had become a major emporium on the trade route between the Moluccas and the West. In addition to its commercial and political power Malacca also became the major diffusion centre for Islam. In the previous centuries the Singosari and Majapahit Kingdoms had taken over the trade of Java’s north coast principalities, which exchanged Javanese rice for Moluccan spices. Coastal Javanese, particularly those from Tuban and Gresik, now developed close ties with Malacca, converted to Islam, and became an important element in Malacca’s population. Merchant princes from north Java came to run the trade between Malacca and the eastern archipelago, and their growing power exerted commercial and military pressure on Majapahit, contributing to its virtual disappearance by the early 16th century.

    In 1511, however, Malacca was captured by the Portuguese. Their intrusion changed the existing pattern of trade in the archipelago and led to the emergence of several strong competing Muslim states which provided alternative trade routes. Muslim Achin (modern Aceh) in northern Sumatra was Portuguese Malacca’s leading opponent during the 16th century, launching attacks against it, either alone or with neighbouring Muslim states. Under Sultan Iskandar Muda, Aceh controlled all of Sumatra’s pepper-trading ports, except in the extreme south, and its influence extended to parts of the Malay Peninsula. Two other important trading states of the period were Makassar (see Ujung Pandang), in south-western Celebes, which converted to Islam in 1603, and Bantam, the Muslim successor in west Java to the Hindu kingdom of Sunda, which controlled southern Sumatra (and thus the Sunda Strait). In the late 16th century a new Muslim kingdom of Mataram arose in central Java and began to absorb many of Java’s maritime principalities.

C  The Development of Dutch Influence

    The Dutch East India Company, or Vereenigde Oost-Indische Compagnie (VOC), was founded in 1602 just six years after the first visit by a Dutch ship. The VOC competed with the Portuguese and the English for the archipelago’s lucrative spice trade. Governor-General Jan Pieterszoon Coen established Batavia (now Jakarta) as the Dutch headquarters and attempted to take control of the spice trade by isolating the archipelago from the extensive international commerce in which it had participated—these efforts included the sinking of all vessels found in Indonesian waters. The Dutch Empire expanded both by direct force and through alliances with native rulers, and fortified trading posts, or factories, were opened throughout the archipelago. A brief clash with Mataram in 1629 was followed by a period of coexistence, but in 1678 Mataram was forced to cede the Preanger region of west Java to the VOC. In 1641 the Dutch captured Malacca, but this no longer ensured control of the spice trade to Europe. To impose a monopoly, the VOC restricted the cultivation of cloves to Ambon, and of nutmeg and mace to the Banda Islands, destroying the spice trees elsewhere.

    During the 18th century the VOC estabished the first plantations, and introduced coffee and other new crops to Java. A system of forced deliveries was instituted which relied heavily on the cooperation of amenable Javanese aristocrats, and on intermediaries from the growing local Chinese population—whose immigration the Dutch promoted. The VOC’s continuing interference in Mataram’s affairs culminated in the kingdom’s final collapse and division, in 1755, into the principalities of Surakarta and Yogyakarta—which survived the end of Dutch rule: Hamengkubuwono IX was sultan of Yogyakarta at independence in 1949. In the Moluccas and much of the rest of the eastern archipelago, Dutch trading rights were converted into political control but the VOC ruled indirectly for the most part. Local rulers retained their internal autonomy, collecting tribute for the company. Only gradually was this system converted into a formalized bureaucracy. As the century wore on, however, financial mismanagement and a decline in trade eventually led to the VOC’s bankruptcy and dissolution in 1799. The Dutch government then assumed direct control of its East Indian possessions.

D  The Consolidation of Dutch Control

    During the Napoleonic Wars, under both the Dutch government and a British occupation force (1811-1816), attempts were made to centralize and reform the administration of Java. On reassuming power in 1816, the Dutch wavered between opening the area to individual enterprise and reverting to a monopoly system. The massive expenditure involved in suppressing local resistance to foreign rule, led by the Javanese prince Diponegoro from about 1825 to 1830, ended this indecision. The Dutch annexed large areas of the central Javanese principalities and in 1830 they introduced the infamous forced cultivation system, the so-called Culture System. Under the system, farmers had to devote a percentage of their land (officially one fifth, but usually far more) to cultivating government-designated export crops instead of rice. The system was extremely profitable for the Dutch; export earnings had increased by almost 500 per cent by 1840. The effects on the local population were disastrous, however; the reduction in the rice production led to widespread famine in parts of Java in the 1840s and 1850s.

    Deeper penetration of Javanese society by the Dutch was paralleled by the extension of their control to other regions. On Sumatra they had imposed direct rule over parts of the interior by 1837; the north-eastern coastal principalities were annexed in 1858. Colonial rule outside Java and parts of Sumatra was patchy and often remained indirect.

    A campaign by Dutch liberals against the Culture System had succeeded by the 1870s in removing some of its harshest aspects. The so-called Liberal Policy then introduced permitted more laissez-faire practices. Later oil, tin, and rubber began to replace coffee, sugar, and tobacco as the main exports to Europe. These products came largely from outside Java, as many new areas were taken over. The late 19th and early 20th centuries saw the Dutch government move to extend and consolidate its control over the whole of the Indonesian archipelago. After a 30-year war Aceh in northern Sumatra was subdued in 1908, and Bali in 1909, by which time Celebes, the Moluccas, the Lesser Sunda Islands, and most of Borneo had all been brought under direct Dutch control, and footholds had been established in parts of New Guinea. During this period communications, shipping, and railways in Java and Sumatra, were developed to serve the needs of the new plantation economy. By the 1920s, the Dutch owned and operated more than 2,400 estates divided equally between Java and the other islands.

E  The Growth of Nationalism

    At the beginning of the 20th century the Dutch introduced their Ethical Policy, under which agricultural services, and limited health and educational facilities were introduced, and the development of railways, roads, and inter-island shipping expanded. The policy helped create two new social elements—a western-educated Indonesian elite, and a smaller group of entrepreneurs who began to compete with the still dominant Chinese commercial class. These groups grew resentful of a colonial structure which treated all Indonesians as second-class citizens, which denied the educated few a role commensurate with their education or abilities and opportunities of any sort to the majority of Indonesians.

    The first important vehicle for the anti-Dutch nationalist movement was the Sarekat Islam (Islamic Union), established in 1912. Growing out of a protective association for indigenous Indonesian batik merchants, the Sarekat Islam by 1918 claimed a membership of more than 2 million throughout the archipelago. The Dutch response was initially conciliatory; at the end of World War I the Volksraad (People’s Council) was established through which selected representatives of major ethnic groups were able to deliberate and offer advice. Most nationalist leaders refused to accept seats, saying that resistance was the only route to an ending of Dutch rule. A hardening of Dutch attitudes was reinforced by revolts in Java in 1926 and western Sumatra in 1927, organized by the Indonesian Communist party (PKI), which had been founded in 1920. The government subsequently adopted a more repressive policy.

     Beginning in the 1920s the nationalist movement was headed by leaders who were not primarily Muslim, notably Sukarno, an advocate of complete independence, who founded the Indonesian Nationalist party (Partai Nasional Indonesia, or PNI) in 1927. Despite the arrests and exiles of Sukarno (1929-1931, 1933-1942), Muhammad Hatta (1934-1942), and other nationalist leaders, and the banning of the PNI and other non-cooperating parties, the nationalist movement maintained its momentum. However, only after Germany overran the Netherlands during World War II did the Dutch even hint at any post-war devolution of political authority. It was the Japanese occupation of Indonesia that first broke the continuity of Dutch rule, and also provided a completely new environment for nationalist activity.

F  The Japanese Occupation

     The Japanese invaded and occupied the islands in 1942. Anxious to mobilize Indonesian support behind their regime, they gave Sukarno and his associates political latitude and recruited him and Hatta to the military administration. Strategic concerns over access to resources, particularly oil, and the fear of Allied counter-attacks, however, soon led to repressive rule by the Japanese, who had initially been welcomed as liberators. Tens of thousands of conscripted labourers were forced to work as virtual slaves, but to retain the support of nationalist leaders, Suharto was allowed to establish the Putera organization in 1943 as a forum for Indonesian opinion.

     Beginning in September 1943, the Japanese established militias in Java, Bali, and Sumatra, which gave thousands of young men military training and formed the nucleus of the post-war independence army. Notwithstanding the establishment of Putera and of advisory councils, Indonesians were largely alienated by the harsh behaviour of the Japanese and by the growing economic hardships. To muster support against anticipated Allied attacks, the Japanese in October 1944 promised Indonesian independence, and subsequently took steps towards granting limited self-government.

G  The Post-War Struggle for Independence

    On August 17, 1945, two days after Japan’s surrender, Sukarno and Hatta proclaimed the independence of the Republic of Indonesia and were selected as its president and vice-president with another leading nationalist, Sutan Sjahrir, as the prime minister. When British troops began landing on the islands in late September, a functioning republican administration was already in existence in many parts of Java and Sumatra. Various incidents including the Battle of Surabaya, in which Indonesian fighters resisted British forces for almost a month, convinced the British administration that the republic had mass support in Java, and they made it responsible for law and order inland. The Dutch had expected to reassert control over their old colony without question, and although they were able to play on outer-island fears of the Java-based republic, they were forced to negotiate with the republic. Before the British withdrew in November 1946, they oversaw the signing of the Linggajati Agreement between the Dutch and the republic, which recognized the de facto authority of the republic in Java and Sumatra, and contained plans for the establishment of a federal Indonesia.

    In July 1947, however, charging violations of this agreement, the Dutch launched attacks against the republic, extending their control over about two thirds of Java, and large estates and oil fields in Sumatra. Protests in the UN led to the formation of a UN Good Offices Commission, which oversaw the signing of the Renville Agreement between the two sides. A Dutch blockade of republican territory caused intense economic hardship and increased popular dissatisfaction with the republic’s policy of negotiating with the Dutch rather than consistently confronting them militarily. This was one element in the unsuccessful PKI-led uprising against the republic’s leadership at Madiun in September 1948.

    In December 1948, following the election of an ultra-conservative government in the Netherlands and defying UN ceasefire lines, Dutch forces again attacked the republic, bombing and then capturing its capital of Yogyakarta. Most of the republic’s leaders, including Sukarno and Hatta, were arrested and exiled. Despite the apparent success of this initial attack, republican guerrilla resistance and pressure from the international community forced the Dutch towards accommodation. At a conference in 1949 in The Hague, the Netherlands agreed to transfer sovereignty over all its former Indonesian possessions, except West Irian (western New Guinea), to the federal Republic of the United States of Indonesia (RUSI) by the end of that year. Indonesian independence was finally achieved on December 27, 1949, with Sukarno as the country’s first president.

H  The Sukarno Regime

    By August 1950 a Unitary State of Indonesia had replaced the RUSI. The new government’s attempts to create a viable state out of Indonesia’s disparate peoples and cultures were complicated by sporadic uprisings of Muslim groups in west Java and Aceh, and by Dutch-led anti-republican movements in Celebes and the Moluccas. Nationwide elections in late 1955 were contested by more than 100 parties and resulted in a parliament in which none of the four main parties had a majority and only one, the Masyumi, had a significant following outside Java. Just as before the elections, parliamentary government was seen by its critics as faction-torn, corrupt, and ineffective, with few ties to the regions it was supposed to represent.

    In 1956 President Sukarno announced that Western parliamentary democracy was unsuitable for Indonesia, and inaugurated his policy of Guided Democracy based on indigenous traditions of consensus. Under this system the government was to be formed by the four main parties and a National Council of appointed representatives of Indonesia’s functional groups, who would reach a consensus on policy under the guidance of the president, who had greatly increased powers. The next two years were ones of almost continuous crisis. Outer-island resentment at the lack of funds allocated them for economic development, despite their being the major source of Indonesia’s export earnings, led to revolts in western Sumatra and northern Celebes in 1958, focused round demands for greater local autonomy. Army dissidents in Sumatra, supported by counterparts in Celebes and several top Masyumi leaders, proclaimed the Revolutionary Government of the Republic of Indonesia on February 15, 1958. Despite receiving covert aid from the United States and Taiwan, the rebels were soon defeated by central government forces, although guerrilla actions continued until 1961. In 1961, Indonesian demands that West Irian should be incorporated into the republic were brought to a head when Sukarno ordered troops to land on the Dutch-controlled territory. In 1962 the Dutch agreed that the Irianese should be allowed to vote on the issue in 1969. After a disputed consultative process, West Irian became part of Indonesia, as Irian Jaya, in August 1969.




    Under Sukarno Indonesia pursued an active and increasingly anti-Western foreign policy. The country left the UN in the early 1960s. To prevent Sabah and Sarawak, the British-controlled section of Borneo, joining the proposed Federation of Malaysia, he instituted an aggressive confrontationalist policy. Domestically, the economic decline continued exacerbated by nationalizations and the withdrawal of Dutch capital and expertise. Both the army and the PKI (Communists) increased their power, with tension growing between the two groups.

I  Suharto’s Rise to Power

    The situation culminated in a coup attempt on September 30, 1965, led by Lieutenant Colonel Untung of the palace guard, in which six top generals were murdered. General Suharto, head of the army’s strategic command, suppressed the coup, took control of the army, and manoeuvred Sukarno into handing over effective power to him in March 1966. Although the identity and motives of the prime instigators of the coup attempt remain a subject of controversy, the army alleged PKI responsibility. During late 1965, despite Sukarno’s efforts to moderate the situation, army units and some militant Muslim youth groups, particularly in the countryside, began massacring PKI members and their supporters. Estimates of the number killed range between 300,000 and 1 million. The PKI was banned on March 13, 1966, and the government arrested hundreds of thousands of people accused of involvement in the coup attempt. The last of these prisoners have yet to be released, and there have been periodic executions, the most recent in 1990. Of those arrested, only about 800 were ever brought to trial.

J  The New Order

    After the coup, a complete reversal of economic and political ideology took place. Assuming a basically pro-Western stance, Suharto’s New Order policies ended confrontation with Malaysia; Indonesia became a major promoter and participant in the regional Association of South East Asian Nations (ASEAN). Advised by Western-trained economists, the army-led government encouraged direct foreign investment and received substantial aid from the West.

    Elections held in 1971 were strictly controlled, and the army- and government-backed organization of functional groups, Golkar emerged as the dominant political grouping, securing most of the seats in the largely advisory parliament. Golkar has been in power ever since. In 1968, Suharto was formally elected president.

    In 1975 the state-owned oil enterprise, Pertamina, was unable to meet repayments of debts amounting to US$10.5 billion, precipitating a crisis which threatened Indonesia’s whole financial structure. Only through project cancellations, renegotiation of loans, and help from the United States and other Western governments was Jakarta able to salvage the situation by late 1977. The subsequent rise in world oil prices played a key part in financing Indonesia’s economic recovery; oil and natural gas production and exports increased steadily through the 1980s and early 1990s, although increasing domestic demand threatened to reduce oil exports significantly by the end of the century.

    Most opposition to Suharto has come from Muslim groups that do not accept the government’s attempt to control them, and from university students criticizing corruption and human-rights violations. Reacting to widespread student demonstrations in early 1978, the government tightened its control over the campuses and the press.

    A further crisis arose with Indonesia’s invasion in December 1975 of the former Portuguese colony of East Timor, which had first been granted independence. Indonesia subsequently annexed East Timor despite opposition from Portugal and condemnation by the UN. Opposition to Indonesian rule within East Timor has been led by the Marxist group Fretilin, which since 1975 has waged a spasmodic guerrilla campaign against the Indonesian army resulting in massive bloodshed. Fretilin’s leader, Xanana Gusanio was captured and imprisoned in 1993. In September 1994 there were reports of talks between senior Indonesian government figures and some Timorese resistance leaders; talks between Indonesia and Portugal, which is still considered by the UN to exercise sovereignty over East Timor, also resumed in early 1994. Riots broke out anew in East Timor in November 1994.

    The greatest long-term dangers to Suharto have been growing social and economic inequalities, particularly the increasing landlessness among the Javanese peasantry. These inequities have been exacerbated by Indonesia’s population growth rate, which has remained high despite a successful family-planning programme in Java. The army’s ageing “Generation of 1945”, having monopolized power under the New Order, have been reluctant to loosen their control of politics and government. Golkar again won an overwhelming majority in the parliamentary elections of May 1982. In 1983 and 1988 the parliament gave Suharto, who ran unopposed, a fourth and fifth term of office; in 1983 his presidential powers were broadened. In 1991 following demonstrations and popular demands for more openness and democracy, two new organizations promoting freedom of expression were allowed to form the Democratic Forum and the League for the Restoration of Democracy. The previous year, a new, independent trade union, Solidarity, had been formed. The military also began to lower its political profile, as a process of “civilianization” of Cabinet and other senior posts was initiated. In 1991 Golkar was returned to power, and the following year Suharto began his sixth term as the nation’s president. In mid-1994, Suharto indicated that he was considering not standing for a seventh term in 1998.

    In December 1995 Indonesia made a landmark agreement on security cooperation with Australia. Following the long-running talks on East Timor, Portugal offered in February 1996 to restore diplomatic ties with Indonesia—broken off after the 1975 annexation—if the government released the imprisoned Fretilin leader Xanana Gusanio. In April the Indonesian government restored voting rights to over 1 million former Communists ostensibly implicated in the 1965 disturbances.

K  The End of the Suharto Era

    With the death of Suharto’s wife in April 1996, speculation mounted over the future transition to a post-Suharto order, particularly in the context of Suharto’s continuing enrichment of his family. Serious rioting broke out in Jakarta in July 1996 when security forces stormed the headquarters of the opposition Indonesian Democratic Party (PDI), occupied since June by supporters of Megawati Sukarnoputri, Sukarno’s daughter, who had been ousted as head of the PDI in a government-engineered party congress that month. In October 1996 the Nobel Peace Prize was awarded to José Ramos-Horta, an East Timorese leader, and the Roman Catholic Bishop Carlos Felipe Ximenes Belo, Apostolic Administrator of Dili (capital of East Timor), for their work in aiding the East Timorese in the face of Indonesian oppression; the Indonesian government strongly criticized the award. Ethnic riots broke out in Java and Borneo in December 1996 and January 1997.

    Despite continuing ethnic unrest in Borneo, 1997 began fairly quietly for Indonesia. Golkar won its expected victory in the May 1997 general elections with an increased majority. However, from August 1997 the Indonesian rupiah was driven downwards by intense currency speculation as the effects of the Asian financial crisis spread to Indonesia, forcing the government to float the currency. In September severe forest fires broke out in several Indonesian islands, spreading damaging clouds of smoke across the entire region. In November 1997 the International Monetary Fund (IMF) approved a credit package to assist the ailing economy, with firm conditions attached, aimed at weakening commercial monopolies and improving competitiveness. The crisis worsened in December 1997 and January 1998, with Suharto repeatedly attempting to renegotiate, or delaying implementation of, the IMF conditions, especially those dealing with food and fuel price subsidies. Many commentators saw this as an attempt to protect his own family’s economic interests, and his own preferred plan for a currency board to restore financial confidence, unveiled in February 1998, met with little support.

    With food and fuel prices rising dramatically, riots broke out in February 1998, aimed chiefly at the prosperous Chinese community. In March, Suharto’s re-election as president for his seventh term was met with mass student demonstrations, while Suharto continued his dispute with the IMF. The student campaign continued through the following months, growing in momentum and organization. Fresh input of IMF funds in early May did little to stablize the situation, as further subsidy cuts immediately pushed up fuel prices. Further rioting and looting broke out, and by mid-May Jakarta was convulsed by mass protests, with students demanding political change while looters targeted businesses associated with Suharto’s ruling clique. When called out, the armed forces proved unready to do more than restore public order, leaving student demonstrators largely unmolested. Despite some shootings of demonstrators, most deaths occurred in burning buildings fired by looters, and crowds regularly fraternized with police and troops.

    Once the army had resumed control of Jakarta, there were a tense few days of largely peaceful confrontation between the military and protest forces before Suharto announced his resignation on May 21, 1998, handing over power to his deputy Jusuf Habibie. Habibie was widely seen as a transitional figure, and the new government still faced the same economic difficulties that had brought down the Suharto regime.

L  Indonesia after Suharto

    In June 1998 the new government of President Habibie confirmed forthcoming presidential and legislative elections, and over 40 new political parties were registered by July. Continuing economic difficulties caused the resumption of IMF aid. Parliamentary elections were held in June 1999, with the main opposition party, the Indonesian Democratic Party (of Struggle) (PDI-P), led by Megawati Sukarnoputri, emerging victorious. However, she was defeated in the presidential elections held in October, when the People's Consultative Assembly (MPR) unexpectedly elected Abdurrahman Wahid, a moderate Islamic leader, as the new president. He had not emerged as a serious presidential contender until Habibie withdrew from the race after the assembly voted to reject a speech in which he defended his 17-month tenure as president. Megawati, with the endorsement of Wahid's National Awakening Party, was subsequently elected as vice-president.

    In August 1998 Indonesia and Portugal agreed to negotiate the future autonomous status of East Timor. However, against a background of sectarian violence and other unrest across Indonesia, concern grew from early in 1999 over the growth of anti-separatist militias in the region, apparently backed by elements in the military and political establishment. In January 1999 the Indonesian government made the first explicit offer of independence to East Timor. In May, Portugal and Indonesia agreed an accord for a referendum, to be supervised by the UN, on a choice of autonomy or independence for the region, and in August voters in East Timor overwhelmingly endorsed independence. Following the vote, anti-independence militias went on a rampage, burning and looting homes and businesses, killing pro-independence activists, and forcing hundreds of thousands of people to flee East Timor. A UN-backed, Australian-led peacekeeping force was deployed to restore order in East Timor in September 1999. On October 20, Indonesia's national legislature ratified the results of the August referendum, settling the course for East Timor's formal handover to the UN. The UN officially assumed control of East Timor on October 26, 1999, with a mandate until January 31, 2001, to oversee the South East Asian island territory's transition to independence from Indonesia. The 8,500-strong UN Transitional Administration for East Timor (UNTAET) force, consisting mainly of Asian troops, arrived in Dili in February 2000, replacing the earlier Australian-led force.

    In early 1999, conflict intensified in the special region of Aceh amid growing calls for a referendum on independence similar to the vote in East Timor. The growing momentum of the secessionist movement in the strife-torn province in north-western Sumatra posed an immediate and urgent challenge to President Wahid’s new government. In June 2000 a ceasefire was signed between the government and the leaders of the separatist Free Aceh Movement (GAM). The truce, which represented the first official break in the violence in the province in more than two decades, was seen as the first step towards achieving peace and a permanent end to the fighting and the abuses of human rights witnessed in the area since the separatist movement began in the early 1980s.

    Elsewhere, in the province of Maluku, in the Moluccas, violence broke out between Christian and Muslim communities, as a result of increasing tensions caused by a recent influx of Muslim immigration to the area, seen by the Christians as a threat to their economic position. In early 2000 the sectarian unrest spread throughout Indonesia, with outbreaks of violence reported in Lombok, Sumbawa, and Celebes. The unrest continued to escalate in the Moluccas, and in June, President Wahid declared a state of civil emergency in the provinces of Maluku and North Maluku.

    Former President Suharto was placed under house arrest on May 29, 2000, to enable the attorney-general’s office to complete an investigation into corruption under Suharto’s presidency. In July 2000 it was announced that Suharto would be charged under a 1971 anti-corruption law. However, the corruption case against the former president collapsed in Jakarta on September 28, when a panel of independent court-appointed doctors decided that Suharto was unfit physically or mentally to stand trial.