History and Politics

In the 7^th and 8^th centuries, the Indian Gupta Dynasty was the dominant force, and introduced Buddhism and built Borobudur. In the 13^th century Buddhism was gradually replaced by Hinduism. By the end of the 16^th century Islam had become the principal religion. In 1511 the Portuguese seized Malacca. By 1610 the Dutch had acquired all of Portugal’s holdings, except East Timor. During the 18^th century, the Dutch East Indian Company controlled the region. In 1883 Krakatau erupted, claiming 50,000 lives. In 1927 Sukarno formed the Indonesian Nationalist Party (PNI). During World War II, the Japanese expelled the Dutch (1942) and occupied Indonesia. In August 1945, Sukarno proclaimed its independence; the Dutch forcibly resisted. In November 1949, Indonesia became a republic, with Sukarno as its first president. During the 1950s economic hardship and secessionist demand were met with authoritarian measures. In 1962, paratroopers seized Netherlands New Guinea and, in 1969, Netherlands New Guinea formally became part of Indonesia as Irian Jaya. In 1966, an anti-Communist campaign driven by Suharto, led to a climate of escalating violence which eventually claimed up to 750,000 lives. In 1968, Suharto was elected president. In 1975, Indonesian forces seized East Timor and declared it a province of Indonesia. Resistance to Indonesian rule since has killed over 200,000 East Timorese. The UN did not recognise the annexation. In 1997, Indonesia suffered from high levels of smog caused by forest fires. In 1997, Suharto’s government was destabilised by the economic crisis in Southeast Asia. Nationwide riots forced Suharto to resign on 21 May 1997. He was replaced by BJ. Habibie. Unrest continued however and the Habibie government did not survive long before a new leader was elected, Abdurrahman Wahid, (Gus Dur.) Eventually he too was forced to resign, this time amid accusations of ineffectual rule and corruption. Current President, Megawati Sukarnoputri has pledged to take action on corruption and to address the economic crises facing the nation.

Indonesia lies on the equator and is hot and humid throughout the year. Rainfall is generally heavy; only the Sunda Islands have a dry season.

Mangrove swamps line the coast. Tropical rainforest remains the major vegetation on less populated islands. Many of the larger islands have been cleared by logging and shifting cultivation.

Economy

Indonesia is a developing country (1995 GDP per capita is US$3,800). In 1997, the economy collapsed, and despite the IMF’s US$49.2 billion package, the value of the rupiah fell 300%. In 1998, inflation was running at 100%. Agriculture employs 56% of the workforce. Oil is the most valuable resource. Indonesia is the world’s second largest exporter of natural gas and rubber. Coffee and rice production are important.

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