Sukarno, Indonesia's founding president

For most of the colonial period, Dutch control over the archipelago was tenuous outside of coastal strongholds; only in the early 20th century did Dutch dominance extend to what was to become Indonesia's current boundaries.[34] Despite major internal political, social and sectarian divisions during the Indonesian National Revolution, Indonesians, on the whole, found unity in their fight for independence. Japanese occupation during World War II ended Dutch rule,[35][36] and encouraged the previously suppressed Indonesian independence movement.[37] A later UN report stated that four million people died in Indonesia as a result of the Japanese occupation.[38] Two days after the surrender of Japan in August 1945, Sukarno, an influential nationalist leader, declared independence and was appointed president.[39][40][41][42] The Netherlands tried to reestablish their rule, and the resulting conflict ended in December 1949, when in the face of international pressure, the Dutch formally recognized Indonesian independence[40][43] (with the exception of the Dutch territory of West New Guinea, which was incorporated into Indonesia following the 1962 New York Agreement, and the UN-mandated Act of Free Choice of 1969).[44]


Sukarno, Indonesia's founding president
Sukarno moved Indonesia from democracy towards authoritarianism, and maintained his power base by balancing the opposing forces of the military and the Communist Party of Indonesia (PKI).[45] An attempted coup on 30 September 1965 was countered by the army, who led a violent anti-communist purge, during which the PKI was blamed for the coup and effectively destroyed.[46][47][48] Around 500,000 people are estimated to have been killed.[49][50] The head of the military, General Suharto, outmaneuvered the politically weakened Sukarno, and was formally appointed president in March 1968. His New Order administration[51] was supported by the US government,[52][53][54] and encouraged foreign direct investment in Indonesia, which was a major factor in the subsequent three decades of substantial economic growth. However, the authoritarian "New Order" was widely accused of corruption and suppression of political opposition.[35][55][56]
Indonesia was the country hardest hit by the late 1990s Asian financial crisis.[57] This led to popular protest against the New Order which led to Suharto's resignation in May 1998.[58] In 1999, East Timor voted to secede from Indonesia, after a twenty-five-year military occupation that was marked by international condemnation of repression of the East Timorese.[59] Since Suharto's resignation, a strengthening of democratic processes has included a regional autonomy program, and the first direct presidential election in 2004. Political and economic instability, social unrest, corruption, and terrorism slowed progress, however, in the last five years the economy has performed strongly. Although relations among different religious and ethnic groups are largely harmonious, sectarian discontent and violence has occurred.[60] A political settlement to an armed separatist conflict in Aceh was achieved in 2005.

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