The conclusion identifies key issues facing the country.
Indonesia is a Southeast Asian archipelago of over 12,000 islands, with a total population of 270 million, making it one of the largest Islamic nations in the world (CIA, 2007). A Dutch colony for over 350 years, it gained independence in 1945 under Sukarno, a nationalist leader who established a parliamentary government with him as its first President. By 1959, the government was struggling to contain three challenging threats: Islamism, communism, and militarisation. Sukarno established a "Guided Democracy" characterised by military-backed authoritarian rule, a non-aligned foreign policy, and socialist anti-modern economic policies, all of which proved chaotic and difficult to manage (Smith, 1999).
Due to growing threats to peace and stability, the army staged a coup d'etat in 1965 under the leadership of Army Minister Suharto, who justified it as the only way to protect the nation from communism. Sukarno was deposed and on house arrest until his death in 1970.
In 1967, Suharto was declared President and ruled Indonesia until his resignation in May 1998, succeeded by his hand-picked successor, B.J. Habibie, who initiated the period of reform in Indonesian politics. During his short term, he allowed parliamentary elections, granted independence to East Timor, and in October 1999 handed the Presidency to Abdurrahman Wahid, who in July 2001 stepped down on charges of corruption and handed power to Megawati, Sukarno's daughter. When her term ended in late 2004, Susilo Bambang Yudhoyono or SBY, a retired Army general who played a key role in 1998 became the country's first democratically elected President (Soesastro et al., 2003; McGibbon, 2006).
Pre-Reformasi Indonesia: 1945 to 1998
Indonesia's recent history could be divided into three periods: Revolusi or Revolution (1945 to 1966), Pembangunan or Development/New Order (1966 to 1998), and Reformasi or Reform (1998 to present). Sukarno's Revolution Period was marked by general instability and messy politics, as the nation struggled to establish itself as a sovereign democracy. During Suharto's New Order Period, Indonesia became an emerging nation and a key player in Southeast Asian politics. In July 1997, a financial crisis hit several Asian nations, and Indonesia had to be rescued by the International Monetary Fund (IMF). The humiliating image of the IMF Managing Director standing over a seated Suharto, bowed and looking weak as he signed the rescue agreement was seared into the imaginations of millions. The Indonesians asked Suharto to step down. His resignation marked the beginning of Reformasi.
The 1945 constitution gave the President strong powers according to Javanese traditional culture,