Dec 01, 2023 Last Updated 8:29 PM, Nov 27, 2023

How the New Order collapsed

Published: Sep 29, 2007


For three decades, Suharto stifled every attempt to organise opposition. In May his discredited regime, and Indonesia as a whole, reaped the terrible results.

Angry crowds spilled out into the streets burning and looting because there was simply no viable political organisation for people to turn to in order to vent their intense frustrations about the collapsing economy. On 21 May he handed over power to his vice-president, Habibie.

In Thailand and South Korea, the economic crisis saw old governments voted out and new reformist governments elected. This was impossible in Indonesia because Suharto, the last of the Cold War era dictators in Southeast Asia, built a political system which concentrated power almost completely in his own hands.

Monopolising political power enabled Suharto to stay in office longer than any president in the world, save Castro. It also created a prolonged period of political stability, which helped to facilitate steady economic growth for many years.

But the price of this stability was terror and the piecemeal destruction of democratic political life.

Liquidate the left

One of Suharto's first acts after his troops took power in 1965 was to order the liquidation of up to half a million of his enemies on the political left. Soon afterwards, tens of thousands of supporters of the former president, Sukarno, were purged from the ranks of government and the military.

Students and Muslims who had rallied behind the army against Sukarno were the next to be shown the door. The pluralism and optimism of the early days gradually gave way to a suffocating insistence on conformity. Those who were critical of the New Order and its program of 'accelerated development' found themselves accused of being disloyal, anti-Pancasila, even subversive. Suharto's ideologues insisted that the very concept of opposition was unacceptable.

In the early 1970s all non-government political parties were forcibly amalgamated into two tame and closely monitored parties, the Muslim PPP and the nationalist PDI. The role of the PPP and the PDI was to take part in Indonesia's highly ritualised five- yearly elections, referred to as 'festivals of democracy'. Neither was allowed to criticise the government party Golkar or to maintain mass memberships. Consequently few took them seriously.

The same was true of the 1,000-member People's Consultative Assembly (MPR), more than half of which consisted of government appointees, including many relatives of the president and his cabinet ministers. Only in March this year, amid widespread dissatisfaction, the MPR rubber-stamped Suharto's election for a seventh five year term of office.

Trade unions

With formal politics a dead-end road, many activists channelled their energies into non-government organisations promoting such issues as human rights and legal aid. Others attempted to set up independent trade unions or political parties, such as the People's Democracy Party (PRD), only to be thrown into prison and see their organisations outlawed.

Most Indonesians, however, had little choice but to put up with the lack of democratic freedoms. They had to accept the government's paternalistic assurances that this was the price the country had to pay in order to develop economically.

Development, though, created its own problems. The recession of the early 1980s saw oil export revenues plummet. It forced the government to switch to a program of rapid industrialisation and fiscal deregulation. This drew hundreds of thousands of young rural workers into industrial estates on the fringes of big cities, where their squalid living conditions contrasted sharply with the air-conditioned lifestyles of the elite.

The disparity generated enormous resentment against the rich, the powerful and the Chinese. Ethnic Chinese Indonesians dominate business and are widely seen - with the overt encouragement of some indigenous businesspeople - as having benefitted unfairly from the government's economic policies. The burgeoning middle classes were not happy either. They didn't like the untrammelled corruption. They didn't like the uncertainty of living under a government often arbitrary in its decision making. And they hated the way Suharto - and his children - brazenly snatched virtually every lucrative business opportunity to emerge in the past decade.

Currency crisis

Into this volatile mix of class, ethnic and political tensions came a bolt from the blue, the currency crisis.

For reasons that few could grasp, prices of everyday goods doubled. Some items rose 500%. Many people hovered on the edge of panic, desperately fearful for their future. Unlike political repression, the crash of the rupiah hit everyone, men and women, rich and poor, urban and rural.

Suharto recognised the gravity of the situation as early as last October. He called in the International Monetary Fund (IMF) for help. But the IMF, fuelled by neo-liberal zeal, was not in a forgiving mood. It demanded a series of radical reforms before it parted with the US$43 billion it had promised.

These included the abolition of a number of extremely lucrative monopolies run by Suharto's children and cronies. The IMF also demanded that the government cut many subsidies on basic consumer items such as fuel, electricity and food, claiming that Indonesia could no longer afford them.

Suharto was forced to agree to all the IMF's terms, even though he realised that implementing them would be political suicide. So he stalled, first floating the unrealistic idea of a currency board, then claiming that the IMF agreement contravened the 'communalistic' spirit of the Indonesian constitution.

Suharto had his chance to restore confidence in the rupiah by appointing a reformist cabinet in March this year. Instead, he appointed an almost unbelievably mediocre ministry. It included his eldest daughter 'Tutut', and his golfing buddy and business partner Bob Hasan. As vice president he chose Jusuf Habibie, an old friend who stands for everything the IMF condemns.

World currency traders freaked, sending the rupiah into a tailspin. Both inside the country and abroad it became obvious that Suharto had no idea how to set things right. Confidence in the government evaporated. The game was lost.

New alliances

But in the absence of an organised opposition or alternative political institutions of any kind, the transition was never going to be easy.

When the unthinkable finally happened and the centre began to give, a mad scramble got under way to forge new alliances, new institutions, new political structures. People lived under Suharto's shadow for so long they had all but forgotten what politics was.

It soon became clear that at least three rare qualities were required for success. First, one had to be untainted by collaboration with Suharto. Second, one had to have a reputation as incorrupt. Third, one had to know how to talk to the people. Not the people in cafe society but out in the real - but to many alien and frightening - world of the kampungs and villages.

The most prominent three figures to fulfill these criteria were Sukarno's daughter Megawati Sukarnoputri, Abdurrahman Wahid, head of the traditionalist Muslim body Nahdatul Ulama, and Amien Rais, head of the 28 million strong Muslim organisation Muhammadiyah.

Each are enormously popular, but it is Amien Rais who has shone as a politician. He was the first major figure to call openly on the president to stand down. He declared himself a presidential candidate several months ago, a move which won him considerable admiration. Since then he has worked tirelessly to stitch together a coalition and to rid himself of his image in some quarters as an intolerant fundamentalist.

Amien has been helped in his campaign by a fourth crucial quality: cross factional support from within the all-important army.

At the time of writing in mid-May it was still unclear how the split in the army between the commander of the armed forces, General Wiranto, and Suharto's ambitious son-in-law Lt-Gen Prabowo Subianto would play itself out. Nor was it possible to say what deals Amien Rais might cut with either group.

Whatever happens over the next few months will no doubt appear inevitable in hindsight, but from the mid-May perspective the picture was very unclear.

President Habibie is a civilian with some Islamic backing. But he appears to be dependent on General Wiranto for support. He lacks the generous leadership charisma that the whole nation so desperately wants at this time. Amien Rais immediately criticised him and the cabinet he announced as far less than the movement for reform had in mind. Many predict Habibie cannot last.

If Wiranto wins out, we are more likely to see reforms of party and election laws, and possibly retain a civilian president, albeit with the military holding veto power. If Amien Rais does come around to giving his support, it may create difficulties in the future, because Wiranto is known to be keen to maintain a strict separation of politics and religion.

Either way, Habibie, or his successor if he does not survive long, will not be nearly as strong as Suharto. He or she will have to make alliances and do deals with various groups in society in order to govern, especially in the alarming economic circumstances the country is in. The next decade will not be as stable as the last three, and nor should it be. If there is one lesson from the New Order, it is that too much order is ultimately a recipe for disaster.

On 22 May, the day after Suharto's resignation, Prabowo was removed from his post and exiled to a command at the staff college, where he had no control over troops.

Dr David Bourchier is a researcher at the Asia Research Centre, Murdoch University, Western Australia. A version of this article appeared in the Sun-Herald (Sydney).

Inside Indonesia 55: Jul-Sep 1998

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