Suharto's New Order: Development of Indonesia under Authoritarian Rule

Together these four sides were highly distrustful towards each other, culminating in the tragedies of the mid 1960s when a group of leftist officers, allegedly influenced by the communist PKI party, committed a pre-emptive coup against seven top army officers who, allegedly, wanted to topple president Soekarno. Suharto, a high officer who took control over the army during these chaotic days, blamed the coup on the PKI and in the following months hundreds of thousands of communists were slaughtered on Sumatra, Java and Bali. Although much of the facts will remain unknown, it became clear that General Suharto emerged as the strong power out of the chaos in the mid-1960s.

The Transfer of Power; the Old Order Becomes the New Order

On 11 March 1966 Indonesia was still in a state of total shock and chaos. On that particular day president Soekarno was pressured into signing a decree in which army officer Suharto received full power to guarantee security, calm and stability in the country. This decree became known as the Supersemar document and meant the effective transfer of executive power from Soekarno to Suharto. Suharto then quickly banned the communist PKI party, started cleansing the army from leftist elements and began to expand the political role of the army in Indonesian society.

Although still president, Soekarno's powers were reduced more and more until Suharto was formally named acting president in 1967 and inducted as Indonesia's second president in 1968. This marked the emergence of a new era which was called the 'New Order'. Policies quickly changed a rather rigorous course from the start of Suharto's New Order. Emphasis of the new government was put on economic development. Ties with the West, broken by Soekarno, were restored which enabled the flow of much needed foreign aid to reach Indonesia. Prudent fiscal management was introduced by the economic technocrats and the hostile and costly confrontation politics towards Malaysia were stopped. 

Suharto's next step was to depoliticize Indonesia. Cabinet ministers were not allowed to make their own policies but instead had to implement the policies that were formulated higher up. Golkar (acronym for Golongan Karya, or functional groups) was used as Suharto's powerful parliamentary vehicle. It contained several hundreds of smaller functional groups (such as labour unions, peasants and businesses) which made sure that the Indonesian people were no longer to be mobilized by political parties.

Golkar was developed into an electoral machinery to produce a majority for the government. It had a network up to the village districts and was financially sponsored to promote the central government. Civil servants were obliged to support Golkar while village heads received quotas of Golkar votes to fill. These policies resulted in a big victory for Golkar during the 1971 elections.

To extend his grip on politics even further, Suharto 'encouraged' the nine political parties that existed to merge into two. Firstly, the United Development Party (Partai Persatuan Pembangunan, abbreviated PPP) consisting of the Muslim parties and, secondly, the Indonesian Democratic Party (Partai Demokrasi Indonesia, abbreviated PDI) consisting of the nationalist and Christian parties. Political activities, however, were very much restricted to short campaign periods prior to national elections.

Intensifying Authoritarianism

From the early beginnings of the New Order, macroeconomic figures were impressive (a detailed account can be found in the New Order Miracle section). However, these economic policies also led to resentment by the Indonesian people as the government was considered to be too focused on attracting foreign investors. When big investment opportunities were given to Indonesians it were usually military officers or the small group of ethnic Chinese Indonesians who, although representing a small portion of the total population, were dominating the economy.

Fed up with corruption, collusion and nepotism, thousands of people went to demonstrate in 1974 when the Japanese prime minister paid a visit to Jakarta. This demonstration turned into massive violent riots which became known as the 'Malari-riots'. It was a frightening experience for the government because it proved unable to control the people. Concerned that one day there might be an uprising among the millions of urban and rural poor, new (more repressive) policies were implemented by the government. Twelve newspapers were closed and journalists detained without trial, thus stimulating self-censorship. Any dissent expressed by the public (such as demonstrations) were now quickly act upon. The economic side of this policy shift - much to the approval of the Indonesians - was the introduction of more restrictive measures on foreign investment and preferential policies favouring indigenous businessmen. 

In national politics Suharto managed to tighten his position in the 1970s. The oil booms made sure that money was abundant, which was used for financing progress with the development of the country's infrastructure as well as poverty alleviation programs. Internationally, however, Indonesia's standing was weakened by its invasion of East Timor. After decolonization from Portugal - and East Timor's subsequent declaration of independence in 1975 - the Indonesian army quickly invaded the country; an invasion marked by violence.

In 1984 all social-political organizations were decreed to declare the Pancasila (the five principles that form the foundation of the Indonesian state, introduced by Soekarno in the 1940s) as their sole ideology. Suharto could now use the Pancasila as a tool for repression because all organizations were under the continuous threat of being accused of anti-Pancasila activities.

It can be stated that during the 1980s Suharto was on the pinnacle of his power. Each election implied an easy victory. Moreover, he had succeeded in making the army powerless. Similar to the political parties and civil service, the army was there only to implement Suharto's policy. But this depoliticization of Indonesian society had one important side effect. It caused the revival of an Islamic consciousness, especially among the youth. As the political arena was closed territory, the Muslims saw Islam as a safe alternative. Complaints regarding the government were discussed in mosques and filled the sermons as it was too risky to speak out at demonstrations (which were curbed anyway). This Islamic revival would cause another policy shift in the early 1990s.

Shifting Focus to Islam

As Islamic forces have always been strong throughout Indonesia's modern history, Muslim leaders of organizations such as the Muhammadiyah and Nahdlatul Ulama (NU) have had more room than others to criticize Suharto. When Islam became a political alternative to express resentment, Suharto (himself a nominal Muslim) began to take a new approach towards the Islam in the early 1990s. This included his pilgrimage to Mecca in 1991, more 'Islam-friendly' officers in the top ranks of the army as well as the establishment of the Indonesian Association of Muslim Intellectuals (ICMI) in 1990. ICMI was set up as a sounding board for Muslim input into public policy rather than being a mass-based political vehicle. Among its membership were critical non-government Muslim leaders and cabinet members. All these measures combined did somewhat dilute criticism from the Muslim community.

Rising Opposition

During the course of the 1990s Suharto's New Order government began to run out of sync with an increasingly assertive Indonesian society. This was partly due to its own success: impressive economic development had resulted in more Indonesians being educated and this group was frustrated at not having any influence on the political course of the country, while indigenous businessmen were frustrated at being empty-handed when large investment opportunities went to family members or close friends of Suharto. Starting from 1993 street demonstrations and protests started to become more frequent and not without success: a state-sponsored lottery was forced to withdraw after demonstrations by students and certain Muslim groups. Moreover, some government-backed officials were defeated during provincial elections. This showed the public that Suharto's regime was not invincible.

Another issue that had a negative impact on the position of the government was its meddling with the internal party politics of the Indonesian Democratic Party (PDI). Megawati Soekarnoputri (daughter of Soekarno) was elected chairperson of the PDI in 1993 to replace Suryadi. The government, however, did not recognize this decision and ordered a new election. Again, Megawati was elected and this time it was ratified at the PDI congress. Megawati, increasingly critical of Suharto's regime, was seen as a real threat by the government due to the status of her father, the late Soekarno. The government therefore backed Suryadi in yet another congress in which Megawati was not invited to participate. It then resulted in Suryadi's re-election as chairman but Megawati, obviously, refused to acknowledge the result of this congress. It subsequently led to a schism within the PDI as well as violent clashes at its headquarters in Jakarta. Society at large was frustrated that Suharto meddled with the internal affairs of the PDI party, especially because it involved a daughter of Soekarno.

The Collapse of Suharto's New Order

The legitimacy of Suharto's authoritarian rule lay primarily in the economic development that took place during its reign. From big despair in the mid-1960s, rapid industrialization had turned Indonesia into a promising country. Influential international institutions (such as the World Bank) labelled Indonesia as an 'East Asian Miracle' in the early 1990s. Other phrases that were expressed by international institutions to describe Indonesia's economic performance were 'Asian Tiger' and 'High Performing Asian Economy' (HPAE). Of course, the international community was also aware about the fact that human rights were not always respected by the authorities in the country. But, ironically, its suppressive nature was also key in alleviating millions of people out of poverty because there was little room for dissent in policy-making and policy implementation. In the mid-1960s more than 50 percent of the population was classified as poor, while in 1993 this number had been reduced to 13.5 percent of the population. Other social indicators (such as school enrollment, infant mortality, life expectancy) showed similar positive results.

Suharto's style of rule was that of a political patronage system. In exchange for electoral (or financial) support, he would often buy off critics by providing them with good government positions or investment opportunities. But this preferential treatment was not confined to his critics only. During the last decade of Suharto's rule his children and close friends were able to set up huge business empires purely because of their closeness to Suharto. Although many Indonesians were frustrated at this high level of corruption, nepotism and collusion in government circles, the government could always point to its impressive economic progress while at the same time paying lip service to the people by claiming to take efforts to reduce corruption in the country.

But this economic pillar of legitimacy vanished when the Asian Financial Crisis erupted in 1997-1998 (for a detailed account visit the Asian Financial Crisis section). Indonesia was the country that would be hit hardest by this crisis, snowballing from an economic crisis to a social as well as a political one. Much of its economic and social achievements were undone and the Indonesian people became determined to keep pushing for a new (Suharto-less) government. Jakarta was turned into a battlefield in which violent riots destroyed thousands of buildings, while more than one thousand people were killed. Suharto was soon politically isolated and had no other option than to resign from the presidency. On 21 May 1998 vice president Bacharuddin Jusuf Habibie, a close ally of Suharto, became Indonesia's third president. He had no other option than to comply with the Indonesian people's wishes and usher in the Reformation era.

Click here to read an overview of Indonesia's Reformation era