President Suharto:
As President, Suharto instituted what he called a "New Order." It was based on a new ideology for Indonesia called Pancasila ("five principles"), which included nationalism, justice, deliberative consensus or representative democracy, social welfare, and monotheism. Monotheism in this case was an inclusive term, meant to embrace both Christians andMuslims, while clearly excluding atheist communists.
Another facet of the New Order was Dwifungsi or "Dual Function," which authorized the army to "participate in every effort and activity of the people in the fields of ideology, politics, and economics." Under General Suharto, Indonesia would be a thoroughly militarized society, with military officers as city mayors, provincial governors, foreign ambassadors, judges in civilian courts, and even CEOs of state-owned corporations.
Suharto continued his long record of corruption while in office, and his wife and children amassed huge fortunes over his long reign. Suharto also removed all potential rivals from power, sending them to obscure foreign countries as ambassadors or appointing them to military commands in backwaters. He also turned on the student activists who had helped him gain power, imprisoning student activists and sending the army to occupy campuses during student protests. In April of 1978, he banned on-campus political activities entirely.
To jump-start the economy, Suharto ended Sukarno's policy of self-reliance and opened Indonesia to foreign aid and investment. A number of international extraction companies soon gained leases for oil exploration, mining, and timber harvesting, creating large profits for many of Suharto's close allies. Suharto also remained officially neutral in the Cold War, but his record of anti-communist purges stood him in good stead with the west.
His international reputation suffered in 1975, however, when he authorized an invasion and annexation of the former Portuguese colony of East Timor. The brutal war there lasted until 1999, leaving hundreds of thousands dead, but East Timor eventually gained full independence.
Suharto used rigged elections and military force to maintain his grip on power throughout the 1980s and 1990s. With the fall of the Soviet Union in 1991, his anti-communist credentials grew less important, and western countries began to focus instead on his human rights abuses, corruption, and the massacre of civilians in East Timor. Suharto and his vice president, B.J. Habibie, also quietly encouraged race riots by Islamist Indonesians against Chinese-Indonesians, who dominated many important businesses and were predominantlyBuddhist or Christian.
By 1998, Indonesia's economy was in free fall due to the world-wide economic down turn, and protests were mounting against President Suharto's corrupt, heavy-handed, and autocratic rule. The reform movement or Reformasi gained strength under the leadership of Megawati Sukarnoputri, the daughter of the country's first president, Sukarno. Suharto tried to hold on to power by cracking down on demonstrations, and hundreds were killed, but the reform movement would not be silenced. On May 21, 1998, Suharto announced his resignation. Vice President B.J. Habibie became the new president.