Indonesia is the world's largest archipelago. Its 13,677 islands stretch 5000 km (3100 miles) eastward from the Indian Ocean to New Guinea. Sumatra, Java, Kalimantan, Papua, and Sulawesi are mountainous, volcanic, and densely forested. Indonesia, formerly the Dutch East Indies, achieved independence in 1949. Politics was dominated by the military for over three decades, until the fall of the Suharto regime in 1998, when a partial "civilianization" began. In outlying regions, the forcibly suppressed demands for greater autonomy have flared up, bringing renewed violence. East Timor, which Indonesia invaded in 1975 and then annexed, voted for independence in 1999 and became a fully sovereign state in 2002

The basic Melanesian–Malay ethnic division disguises a diverse society. The national language, Bahasa Indonesia, coexists with at least 250 other spoken languages or dialects. Attempts by the Javanese political elite to suppress local cultures have been vigorously opposed especially by the East Timorese, the Aceh of northern Sumatra, and the Papuans of New Guinea.

Religious and interethnic hostility is increasing. Since 1998 there have been violent clashes between Muslims and Christians on Sulawesi, and in the Moluccas. Similar clashes occurred in Kalimantan in 1999 and 2001 between indigenous Dayaks and ethnic Madurese immigrants. Aceh introduced sharia (Islamic law) in 2000.

Discrimination against ethnic Chinese has encouraged vicious attacks on their businesses, as in Jakarta in 1998.

Gender equality is enshrined in law, and women are active in public life.

Strengths

Varied resources, especially oil. Signs of return to high growth. Debt successfully rescheduled. International credit rating improved.

Weaknesses

High level of bureaucracy. Endemic corruption. Huge wealth disparities. Regional insecurity deters investment. High underemployment.

Profile

Under Suharto the economy grew rapidly, fueled largely by oil, until its collapse in 1997–1998. State-owned corporations played a significant role, protected from foreign competition. Non-oil exports, especially manufactures, were diversified, but the debt burden used up a third of export earnings. Promised reform was delayed by conflict between advocates of deregulation and "technologists" who favored industrialization over profit for state concerns. Further reforms have been stymied by the PKB's poor parliamentary representation. Corruption remains rife, embroiling then president Wahid in 2001. Persistent weaknesses are likely to continue to hold back real growth. However, relations with the IMF and other international donors were sufficiently improved by 2002 for Indonesia's international credit rating to be upgraded.

General Suharto, autocratic ruler since 1968, was forced to resign in 1998 amid widespread protest over corruption, economic mismanagement, and denial of democratic rights. Abdurrahman Wahid, elected president in 1999, also became embroiled in corruption scandals, and was in turn ousted in 2001.

Profile

Under Suharto, the army was dominant. The main political organization was Golkar, an amalgam of various interest groups. After his fall, the mainly Muslim PDI–P, led by Megawati Sukarnoputri, daughter of the first president, won a majority in elections, but Wahid of the PKB was elected president, and Megawati became vice president. Disenchantment with Wahid pressurized him into devolving many of his duties to her in 2000, and increasingly vehement opposition in parliament culminated in his removal in July 2001 whereupoon Megawati became president herself.

The army's involvement in politics remains a serious problem. In early 2000, the influential Gen. Wiranto left the government, but the army refused to acquiesce in the reduction of its 38-seat entitlement in the legislature any earlier than 2009.

Separatist movements – the legacy of Suharto's centralist policies – and violence between Muslims and religious minorities threaten national unity. The separatist movements in Aceh (northern Sumatra) and Papua continue to gather momentum, with both granted greater autonomy in 2001.

Indonesia is rich in energy sources. The main export earners are oil and liquefied natural gas – the country is the world's largest LNG exporter. However, oil output has been falling. Combined with rapid growth in domestic energy demand, this could turn the country into an oil importer in the next decade. The government is therefore encouraging extending exploration into remote regions. It is also considering developing geothermal and nuclear energy sources. Indonesia's other main resources are coal, bauxite, and nickel, and agricultural products such as rubber and palm oil. With 75% of the land classified as forest, timber production is also significant.

An extensive network of clinics, down to village level, means that access to health care is reasonable. As a result, health indicators have improved significantly. The death rate declined from 2% in 1965 to 0.7% in 2000, while infant mortality more than halved. Malnutrition, particularly among children, remains a real problem, although chronic levels of Vitamin A deficiency have been largely eradicated. HIV infections among intravenous drug users, particularly in prisons, are rising.

Primary education is compulsory,subsidized by the state, and is often provided by Islamic schools. In contrast, good quality secondary education is hard to find in rural areas. University students come predominantly from the richer elites.

Since 1998 attempts have been made in the courts to tackle the issues of corruption and concentration of wealth in the hands of close associates and relatives of former President Suharto and his political successors. Large wealth disparities exist between the Javanese middle classes and the subsistence farmers and tribesmen of Papua and Kalimantan.

Hindu, Buddhist, and Islamic interest preceded European rivalries over valuable spices. The Dutch won control by the 17th century. Colonization began on Java. By 1910, the Dutch East Indies encompassed present-day Indonesia.

• 1927 Indonesian National Party formed under Dr. Sukarno.
• 1930s Dutch repress nationalists.
• 1942–1945 Japanese occupation. Autonomy within "Greater East Asia" state promised. Sukarno works with Japanese while promoting independence.
• 1945 Sukarno declares Indonesian independence. Dutch forces attempt to reassert control.
• 1945–1949 Nationalist guerrilla war.
• 1949 Dutch grant independence to federal-style United States of Indonesia under Sukarno as president.
• 1950 Union dissolved, Sukarno grows increasingly authoritatian.
• 1957–1959 Sukarno introduces authoritarian Guided Democracy.
• 1962 Dutch relinquish Western New Guinea.
• 1965 Communist PKI alliance with military ends. Army led by Gen. Suharto crushes abortive coup and acts to eliminate PKI; up to one million killed.
• 1966 Sukarno hands over power to Gen. Suharto.
• 1968 Suharto becomes president: introduces pro-Western liberal economic policies while concentrating power.
• 1971 First elections for 16 years. Government parties win landslide.
• 1975 Invasion of East Timor; its incorporation as 27th province in 1976 is not recognized by UN.
• 1984 Muslim protests in Jakarta trigger Islamic movement.
• 1985 Fretilin movement declares East Timor independent.
• 1989 Unrest in Java and Sumbawa.
• 1991 Indonesian troops massacre pro-independence demonstrators in East Timor.
• 1996 Antigovernment demonstrations in Jakarta.
• 1997 Economic recession. Smog across region from forest fires.
• 1998 Suharto resigns amid unrest.
• 1999 Election victory for opposition led by Megawati Sukarnoputri. East Timor referendum backing independence triggers violent backlash. Abdurrahman Wahid elected president, Megawati named vice president.
• 2000 Aceh becomes first province to introduce Islamic sharia law. Violence erupts again in Maluccas.
• 2001 Wahid removed, replaced by Megawati.
• 2002 January, autonomy officially granted to Papua. May, East Timor independent.