The Republic of Indonesia is located in the Malay Archipelago, the world’s largest archipelago, between Indochina and Australia, between the Indian and Pacific Oceans. It is the most populous Muslim-majority nation in the world and the fourth most populous overall. It has had free elections since the 1998 Revolution which led to the resignation of President Suharto, who came to power in 1965.1
Under the influences of Hinduism and Buddhism, several kingdoms formed on the islands of Sumatra and Java from the 7th to 14th century. The arrival of Arabs trading in spices later brought Islam, which became the dominant religion in many parts of the archipelago after the collapse of Hindu and Buddhist kingdoms.
When the Portuguese came in the early 16th century, they found a multitude of small states. These states were vulnerable to the Portuguese, and later other Europeans, who were in pursuit of dominating the spice trade. In the 17th century, the Dutch emerged as the most powerful of the Europeans, ousting the Spanish and Portuguese (except for their colony of Portuguese Timor on the island of Timor). The Dutch influence started with trading by the Dutch East India Company (VOC), a chartered private enterprise constituting a state in all but name, complete with its own fleet and army, which gradually expanded its sphere of influence and its grip on political matters. Like the British, the Dutch would mainly rely on indirect rule, using traditional native elites as vassals, while imposing their will and extracting major income under supervision of their colonial officials. Following the dissolution of the VOC in 1799 by the Batavian Republic (Napaoleon’s Dutch satellite state), and the political instability from the Napoleonic Wars including partial British occupation, the East Indies were awarded to the United Kingdom of the Netherlands in 1815. From this time onward, the East Indies were officially ruled as the major colonies of the Dutch crown.
Under the nineteenth-century Cultivation System (Cultuurstelsel), large plantations and forced cultivation were established on Java, finally creating the profit for the Netherlands that the VOC had been unable to produce. In a more liberal period of colonial rule after 1870 the Cultivation System was abolished, and after 1901 the Dutch introduced the Ethical Policy, which included limited political reform and increased investment in the colony.
During World War II, with the Netherlands under German occupation, in December 1941 Japan began a five prong campaign towards Java and the vital fuel supplies of the Dutch East Indies. Though Japan captured Java by March 1942, it was initially unable to find any national leader willing to collaborate with the Japanese government against the Dutch. Eventually the Japanese commander ordered that Sukarno be released from his prison island, and in July 1942, Sukarno arrived in Jakarta. Sukarno and his colleagues collaborated with the Japanese occupiers. In 1945, with the war drawing to a close, Sukarno was made aware of an opportunity to declare independence. In response to lobbying, Japan agreed to allow Sukarno to establish a committee to plan for independence. Sukarno and Mohammad Hatta declared independence on 17 August.
Following the defeat of Japan in the World War, the Netherlands’ Army, at first backed by the Allies, attempted to reoccupy their former East Indies colonies. Indonesia’s war for independence lasted from 1945 until 27 December, 1949, when, under heavy international pressure, the Netherlands acknowledged the independence of Indonesia, as a Federation of autonomous states. This federation soon became a republic with Sukarno as the first president, and Mohammad Hatta as the first vice president. See Indonesian National Revolution. It was not until 16 august 2005 that the Dutch government recognized 1945 as the country’s year of independence and expressed its regrets over the Indonesian deaths caused by the Netherlands’ Army.
The 1950s and 1960s saw Sukarno’s government aligning itself first with the emerging non-aligned movement and later with the socialist bloc. The 1960s saw Indonesia in a military confrontation against neighboring Malaysia, and increasing frustration over domestic economic difficulties. Army general Suharto became president in 1967 on the pretext of securing the country against an alleged Communist coup attempt against a weakening Sukarno. In the aftermath of Suharto’s rise, hundreds of thousands people were killed or imprisoned by the military and religious groups in a backlash against alleged Communist supporters. Suharto’s administration is commonly called the New Order era. Suharto invited major foreign investment into the country, which produced substantial, if uneven, economic growth. However, Suharto enriched himself and his family through widespread corruption and he was forced to step down amid massive popular demonstrations and a faltering economy by the Indonesian Revolution of 1998.
In the period of 1998 to 2001, the country had three presidents: Bacharuddin Jusuf (BJ) Habibie, Abdurrahman Wahid and Megawati Sukarnoputri. In 2004 the largest one-day election in the world and Indonesia’s first direct Presidential election was held and was won by Susilo Bambang Yudhoyono. Parts of northern Sumatra, particularly Aceh, were devastated by a massive earthquake and tsunami on 26 December 2004.