Great Decisions 2012 Preview: Indonesia

The Great Decisions briefing book and television series on PBS take a closer look at Indonesia in 2012.  As President Obama attends this week's ASEAN summit on the island of Bali, here's what you need to know about this important ally.  For more in-depth analysis, order the 2012 briefing book and DVD.

Current Situation

Indonesia, the archipelago nation that spans more than 17,000 islands in South East Asia, has emerged from a forty-year military dictatorship to prosper as a secular democracy. Though home to world’s largest Muslim population, (greater than all the Arab nations combined), Indonesia embraces religious diversity and does not practice political Islam. Some have argued Indonesia is the only example of a Muslim democracy, and thus the true model for popular uprisings in the Middle East. While the simplification may be tempting, increasing communication between the Middle East and South East Asia has contributed to a radicalization of certain Islamist groups, and terrorist attacks remain prolific. Yet it does appear that Indonesia is emerging as a model- of what it is difficult to say. Economically, Indonesia’s growth has led one expert to call it a “second India,” with the potential to play an increasingly important role against the growth of China. From a history of autocratic rule, to economic prosperity, to a modern secular democracy and U.S. ally, what is the story of Indonesia? What is the potential for a future U.S.-Indonesian partnership, and how does the Indonesia fit in with the center of the Muslim world?


It was feared that the history of Indonesia since colonial independence would be dominated by the dictatorial rule of General Suharto. Though recent progress might change the narrative, Indonesia’s remarkable turnaround is all the more impressive due to its troubled past. President Soekarno, Indonesia’s first president, gradually secured an authoritarian regime: termed a “Guided Democracy”, he centralized power, weakened the parliamentary system, and significantly increased the military. Political unrest between the leading communist party (PKI) and members of the military led to an increase in violent rebellions across the country in the middle of the 20th century, until in 1967, the head of the armed forces, General Suharto, had secured enough power to usurp the presidency. Suharto’s “New Order” was a military autocracy, and ushered in not only a period of fear and oppression, but increased dissenting separatists group across Indonesia’s large territory. Ironically, Suharto’s foreign policy did not contain what the U.S. State Department considered “anti-American” rhetoric and practices (what had the potential to be the 3rd largest communist movement in the world). Unlike his predecessor, and despite his iron first, the U.S. retained positive (if not distant) relations with the dictator. Amidst popular protest, Suharto eventually stepped down in 1998. The following year, the UN aided in administering elections for the succession of East Timor- though the loss of the contested land instigated violence across the region. In 2004, Indonesia conducted its first free, direct elections, as per an amendment to the constitution. The elected General Susilo Bambang Yudhoyono began to administer sweeping reforms, including the 2005 signing of a peace accord with the Free Aceh separatists, who fought against the Indonesian military throughout the end of the 20th century. Most importantly, the president decentralized political authority, and helped put the country on a positive economic path, through a “pro-growth, pro-poor, pro-employment” economic program.



Indonesia currently faces the challenges of rapid development. One columnist aptly described the disparity between domestic consumption and a lagging infrastructure- evidenced by the image of thousands of new cars, without enough roads on which to drive them. Indonesia has been the target of several serious in-grown terrorist attacks, notably in Bali (2002 and 2005) and Jakarta (2003 and 2004). It continues to deal with separatist violence, including the Free Papua Movement. Indonesia also occupies a unique role in the larger Muslim community. While President Yudhoyono has taken steps to mediate in the Iraq War, he does not have an influential role among the Middle East's rulers, and Indonesia’s role as an Islamic nation remains unclear.    


President Obama’s personal ties to the nation- he lived in Jakarta for four years growing up- has had a clear effect on U.S. efforts to expand relations in the region. In a speech at the University of Jakarta, the President professed hope for overcoming differences and working together in “the steady pursuit of progress.” Strategically, Indonesia is in the position to be used as an important counter-weight to China’s growing influence. It controls key waterways, and is becoming a center for U.S. investment. Indonesia fared better than many nations in the aftermath of the global financial crisis. Its debt-to-GDP ratio has continued to decline, and leading credit agencies have begun to upgrade the country’s grading, now one notch below investment grade. Whether Indonesia is prime to become a “second India” will depend on many factors- but the impressive growth, economically, politically, and socially since the fall of Suharto has led many to turn an eye to this increasingly important nation.

Key Questions

  • What has marked the U.S.- Indonesian relationship over the past century?
  • How has Indonesia developed domestically since the fall of Suharto?
  • What role does Indonesia play in the wider Muslim community?
  • What potential does an increased U.S.-Indo relationship have? Should it be pursued?
  • What are the greatest challenges in Indonesia today? Economically, politically, religiously?
  • What is the role of Islam in the Indonesian government?

This Great Decisions 2012 Brief was written by Sarah Marion Shore

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