INDONESIA

From Independence to a Modern Nation (1945–Present)
Justin Ivan Jorianto · July 16, 2026

Contents

  1. Independence & National Revolution (1945–1949)
  2. Liberal Democracy Era (1950–1959)
  3. Guided Democracy Era (1959–1965)
  4. The 30 September Movement & Regime Change (1965)
  5. The New Order (1966–1998)
  6. Asian Financial Crisis & the Fall of Suharto (1997–1998)
  7. Reformasi Era (1998–Present)
  8. Discussion & Q&A

I. Independence & National Revolution

1945–1949

On August 17, 1945, following Japan's surrender, Indonesia proclaimed its independence. Sukarno became the first president and Mohammad Hatta the vice president. The Dutch, who had colonized Indonesia for three centuries, attempted to re-establish colonial rule after the Japanese occupation ended, leading to four years of armed conflict and diplomacy.

Diplomatic Struggle

Outcome: In December 1949, the Dutch formally recognized Indonesian sovereignty. Indonesia became the Republic of the United States of Indonesia (RIS), comprising 16 federal states. Dissatisfaction with the federal system led to the restoration of a unitary state (NKRI) in August 1950, with one central national government.

II. Liberal Democracy Era

1950–1959

From 1950, Indonesia adopted a parliamentary democracy, but it created numerous problems: frequent changes of prime ministers, weak coalition governments, and regional rebellions.

1955 Federal Election

Indonesia's first democratic election, considered free and fair. The four largest parties were PNI, Masyumi, NU, and PKI (Communist Party).

1955 Bandung Conference

Hosted Asian and African countries to discuss anti-colonial movements. It laid the foundation for the Non-Aligned Movement and elevated Indonesia's international standing.

III. Guided Democracy Era

1959–1965

Due to the problems of the liberal democracy period, President Sukarno dissolved parliament, restored the 1945 Constitution, and introduced Guided Democracy.

Core Ideology: Nasakom

A blend of Nationalism, Religion, and Communism, attempting to unite the military, religious groups, and the PKI under a single ideology.

Economic Situation

Hyperinflation, economic deterioration, and poor fiscal management.

Foreign Policy

Strongly anti-Western; closer relations with China and the Soviet Union. Indonesia considered Malaysia a British neo-colonial project and withdrew from the United Nations in 1965 after Malaysia became a Security Council member.

IV. The 30 September Movement & Regime Change

1965

September 30 – October 1, 1965, marks one of Indonesia's most significant turning points.

Official Indonesian Narrative

Seven senior army generals were kidnapped (six killed, one survived). The PKI was accused of orchestrating the kidnappings to overthrow President Sukarno and establish a communist state. The generals were portrayed as loyal officers protecting Sukarno, regarded as national heroes.

Alternative Interpretation (Based on Historical Research)

Several senior generals were planning to remove Sukarno and establish an anti-communist government. The PKI, as Sukarno's political ally, acted against those generals to protect his government. Some accounts suggest this scenario was orchestrated by the CIA, with General Suharto playing a key role in consolidating power to limit communism in Asia.

Consequences: General Suharto took military control. Mass anti-communist purges followed, with an estimated 500,000–1,000,000 deaths. The PKI was destroyed. In March 1966, Sukarno signed the March 11 Order (Supersem), transferring authority to General Suharto under armed intimidation. Suharto consolidated power and replaced Sukarno as president. Sukarno was placed under house arrest until his death in 1970.

V. The New Order

1966–1998

Suharto served for 32 years, making him Indonesia's longest-serving president. The government was highly centralized; the military played a major political role, and political opposition was heavily restricted.

Economic Policies & Achievements

Shift toward capitalism, foreign investment, and macroeconomic stability. The government worked closely with the "Berkeley Mafia" economists.

Serious Problems

$15–35B
Estimated personal corruption by Suharto
32 Years
Suharto's time in power

Corruption, nepotism, and crony capitalism were rampant. Suharto is widely cited as having the largest estimated personal corruption by a head of state in world history.

Foreign Policy & Controversies

VI. Asian Financial Crisis & the Fall of Suharto

1997–1998
2,500→17,000
Rupiah per USD collapse
32 Years
End of Suharto's rule

Economic Effects

The rupiah collapsed, banking crisis, massive unemployment, and inflation surged.

Social Effects

Nationwide riots and violence erupted. Many ethnic Chinese Indonesians became targets of violence. Activist kidnappings occurred, orchestrated by General Prabowo (the current president).

Result: On May 21, 1998, Suharto resigned after 32 years in power. Vice President Habibie became president.

VII. Reformasi Era

1998–Present
B. J. Habibie
1998–1999
Introduced press freedom, political party liberalization, and decentralization reforms. East Timor voted for independence in a 1999 referendum.
Abdurrahman Wahid
1999–2001
Expanded civil liberties, improved minority rights, and promoted religious pluralism. Faced numerous political conflicts and was impeached in 2001.
Megawati Sukarnoputri
2001–2004
Achieved political stabilization and continued democratic consolidation. Faced the terrorism threat; the 2002 Bali bombing was the most significant event.
Susilo Bambang Yudhoyono (SBY)
2004–2014
First directly elected president, served two terms. Achieved economic stability and growth, the 2005 Aceh Peace Agreement, and continued growth during the 2008 global financial crisis.

Joko Widodo (2014–2024)

First president not from a military or political elite background.

Key Achievements

  • Massive infrastructure investment: toll roads, ports, airports, MRT, high-speed rail, dams
  • Improved healthcare access and social assistance programs
  • Managed COVID-19 response and economic recovery
  • Downstream industrialization policy to reduce raw mineral exports
  • Capital relocation from Jakarta to Nusantara in East Kalimantan
  • Chaired the G20 in 2022

Key Problems

  • Democratic backsliding
  • Continued deforestation
  • Nepotism allegations
  • Corruption scandals

Prabowo Subianto (2024–Present)

The current president continues infrastructure and downstream industrialization policies, advances the development of Nusantara, and launched a nationwide free nutritious meals (MBG) program for students. He emphasizes food security, energy security, and national defense modernization. In foreign policy, he maintains the non-aligned "free and active" diplomacy, seeking stronger economic and defense cooperation with a wide range of partners including ASEAN, China, the U.S., Japan, Australia, and Europe.

Scandals of the Current Administration

Discussion & Q&A

Q: Who do you consider the most important president since independence, and what has been the biggest negative impact?

Justin considers Joko Widodo the most important president because he successfully built Indonesia into a more developed country, with infrastructure projects advancing rapidly and cooperation with many countries, especially China. Under his tenure, Indonesia's development pace surpassed that of previous presidents. Regarding negative impacts, Justin believes corruption cases are widespread across the country and have yet to be eliminated.