What Brought the Downfall of Suharto and the New Order?

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Indonesia, Army & State: Indonesia Since 1945 (History 2105)

Cormac Griffin (A1177407)



Suharto, the President and the unconditional ruler of Indonesia since a military takeover in 1966, stepped down as President the 21st of May, 1998. His choice to hand power over to his Vice-President was the result of an extended period, of almost 2 years in duration, of extreme public and political insecurity and volatility within Indonesia. Political shifts and realignments in Indonesia have a history of being long drawn out issues; it has been suggested that "all the turmoil in Indonesia during this (20th) century have been due to the stubbornness and failure of those in control to recognize the collapse of their own mandates."� Suharto is an excellent illustration of this. In spite of universal denunciation he attempted to maintain his rule, seemingly oblivious or simply too stubborn to notice, or care about the escalating political demands for his removal. The key question to be examined is why Suharto and his New Order political values could fall apart with such swiftness. After all a mere two months prior to his removal Suharto was voted in for a seventh term, admittedly by many who owed their position to his rule. Within two months, political groups which had backed the dictator were now clamouring for his removal. A totalitarian, authoritarian political structure, one widely considered - not least by the Australian government - as secure and coherent simply dissipated. This essay examines the causes of Suharto's, and thus the New Order's, demise. It argues that while a number of internal factors, such as political resistance and opposition to Suharto's regime and extensive corruption, played an significant part in the ruin of the New Order, it was external factors beyond the regimes control, predominantly the economic crisis coupled with natural disasters and the growing infirmity of the President himself, that finally brought the 'strongman' of Indonesian politics to his knees. In short, the turbulence following the economic crisis and the unprecedented level of natural disasters that seemed to plague Suharto's New Order regime, were the key drivers of his downfall. He had previously faced, and prevailed over, internal opposition, however, he failed because external factors had so weakened his regime that it could not adequately respond to internal challenges.

Economic Crisis

In his 1996 book on the Indonesian economy, Hill quotes the argument of an economist writing thirty years prior, that Indonesia "must unquestionably be considered the key economic failure amongst the foremost underdeveloped nations."� Little had changed by the mid-1990s. Despite good economic growth, only inadequate welfare advances had taken place but came at the cost of an enormous increase of Indonesia's debts. Improvements for the poorest aspects of Indonesian society were embellished for political purposes but the duality of absolute poverty coupled with the vastness of wealth in the material rich outer island regions was both clear and undoubtedly politically dangerous. Education received a minute proportion of the total Gross Domestic Product (GDP) when compared with any other Southeast Asian nation. Corruption thrived and a tiny clique of Javanese based families, counting the President's own extensive family, were granted monopolies in industries such as tobacco, road transport and forestry. Indeed, by the time Suharto was forced out, the widespread use of the acronym KKN - Corruption, Collusion and Nepotism in Indonesian Bahasa - came to describe him and his puppet regime. In short, the structure and nature of Indonesia's New Order economy was essentially unsustainable.

The external push to this economic house of cards was the Asian financial crisis of 1997. By 1998, the average income of a...
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