Suharto

Suharto
2nd President of Indonesia
In office 12 March 1967 - 21 May 1998 Acting to 27 March 1968
Vice President	Hamengkubuwono IX Adam Malik Umar Wirahadikusumah Sudharmono Try Sutrisno B. J. Habibie
Preceded by	Sukarno
Succeeded by	B. J. Habibie
16th Secretary General of Non-Aligned Movement
In office 7 September 1992 – 20 October 1995
Preceded by	Dobrica Ćosić
Succeeded by	Ernesto Samper Pizano
4th Indonesian Armed Forces Commander
In office 1969–1973
Preceded by	Abdul Haris Nasution
Succeeded by	Maraden Panggabean
8th Indonesian Army Chief of Staff
In office 1965–1967
Preceded by	Pranoto Reksosamudra
Succeeded by	Maraden Panggabean
1st Armed Force and Strategic Reserve ( KOSTRAD) Commander
In office 1961–1965
Preceded by	Position created
Succeeded by	Umar Wirahadikusumah
Personal details
Born	(1921-06-08)8 June 1921 Kemusuk, Dutch East Indies
Died	27 January 2008(2008-01-27) (aged 86) Jakarta, Indonesia
Nationality	Indonesian
Political party	Golkar
Spouse(s)	Siti Hartinah (1947–1996)
Children	Siti Hardiyanti Hastuti Sigit Harjojudanto Bambang Trihatmodjo Siti Hediyati Hariyadi Hutomo Mandala Putra Siti Hutami Endang Adiningsih
Profession	Military
Religion	Islam
Signature

Suharto (8 June 1921 – 27 January 2008) was the second President of Indonesia, having held the office for 31 years from 1967 following Sukarno's removal until his resignation in 1998.

Suharto was born in a small village, Kemusuk, in the Godean area near Yogyakarta, during the Dutch colonial era. He grew up in humble circumstances. His Javanese Muslim parents divorced not long after his birth, and he was passed between foster parents for much of his childhood. During the Japanese occupation of Indonesia, Suharto served in Japanese-organised Indonesian security forces. Indonesia's independence struggle saw him joining the newly formed Indonesian army. Suharto rose to the rank of Major General following Indonesian independence. An attempted coup on 30 September 1965 was countered by Suharto-led troops and was blamed on the Indonesian Communist Party. The army subsequently led an anti-communist purge, and Suharto wrested power from Indonesia's founding president, Sukarno. He was appointed acting president in 1967 and President the following year. Support for Suharto's presidency was strong throughout the 1970s and 1980s but eroded following a severe financial crisis that led to widespread unrest and his resignation in May 1998. Suharto died in 2008.

The legacy of Suharto's 31-year rule is debated both in Indonesia and abroad. Under his " New Order" administration, Suharto constructed a strong, centralised and military-dominated government. An ability to maintain stability over a sprawling and diverse Indonesia and an avowedly anti-Communist stance won him the economic and diplomatic support of the West during the Cold War. For most of his presidency, Indonesia experienced significant economic growth and industrialisation, dramatically improving health, education and living standards. Indonesia's invasion and occupation of East Timor during Suharto's presidency resulted in at least 100,000 deaths. By the 1990s, the New Order's authoritarianism and widespread corruption were a source of discontent. In the years after his presidency, attempts to try him on charges of corruption and genocide failed because of his poor health and because of lack of support within Indonesia.

Early life

Suharto was born on 8 June 1921 during the Dutch East Indies era, in a plaited bamboo walled house in the hamlet of Kemusuk, a part of the larger village of Godean. The village is 15 kilometres (9.3 mi) west of Yogyakarta, the cultural heartland of the Javanese. Born to ethnic Javanese parents of peasant class, he was the only child of his father's second marriage. His father, Kertosudiro, had two children from his previous marriage, and was a village irrigation official. His mother, Sukirah, a local woman, was distantly related to Sultan Hamengkubuwono V by his first concubine.

Five weeks after Suharto's birth, his mother suffered a nervous breakdown and he was placed in the care of his paternal great-aunt, Kromodirjo. Kertosudiro and Sukirah divorced early in Suharto's life and both later remarried. At the age of three, Suharto was returned to his mother who had remarried a local farmer whom Suharto helped in the rice paddies. In 1929, Suharto's father took him to live with his sister who was married to an agricultural supervisor, Prawirowihardjo, in the town of Wuryantoro in a poor and low-yield farming area near Wonogiri. Over the following two years, he was taken back to his mother in Kemusuk by his stepfather and then back again to Wuryantoro by his father.

Prawirowihardjo took to raising the boy as his own, which provided Suharto a father-figure and a stable home in Wuryantoro. In 1931, he moved to town of Wonogiri to attend the primary school (schakelschool), living first with Prawirohardjo's son Sulardi, and later with his father's relative Hardjowijono. While living with Hardjowijono, Suharto became acquinted with Darjatmo, a dukun ("guru") of Javanese mystical arts and faith healing. The experience deeply affected him and later, as president, Suharto surrounded himself with powerful symbolic language. Difficulties in paying the fees for his education in Wonogiri resulted in another move back with his father in Kemusuk, where he continued studying at a lower-fee Muhammadiyah middle school in the city of Yogyakarta until 1939.

Like many Javanese, Suharto had only one name. In religious contexts in recent years he has sometimes been called “ Haji” or “el-Haj Mohammed Suharto” but these names were not part of his formal name or generally used. The spelling "Suharto" reflects modern Indonesian spelling although the general approach in Indonesia is to rely on the spelling preferred by the person concerned. At the time of his birth, the standard transcription was "Soeharto" and he preferred the original spelling. The international English-language press generally uses the spelling 'Suharto' while the Indonesian government and media use 'Soeharto'.

Suharto's upbringing contrasts with that of leading Indonesian nationalists such as Sukarno in that he is believed to have had little interest in anti-colonialism, or political concerns beyond his immediate surroundings. Unlike Sukarno and his circle, Suharto had little to no contact with European colonizers. Consequently, he did not learn to speak Dutch or other European languages in his youth. He learned to speak Dutch after his induction into the Dutch military in 1940.

Military career

World War II and Japanese occupation

Suharto finished middle school at the age of 18 and took a clerical job at a bank in Wuryantaro. He was forced to resign after a bicycle mishap tore his only working clothes. Following a spell of unemployment, he joined the Royal Netherlands East Indies Army (KNIL) in June 1940, and undertook basic training in Gombong near Yogyakarta. With the Netherlands under German occupation and the Japanese pressing for access to Indonesian oil supplies, the Dutch had opened up the KNIL to large intakes of previously excluded Javanese. Suharto was assigned to Battalion XIII at Rampal, graduated from short training at KNIL Kaderschool in Gombong to become sergeant, and was posted to KNIL reserve battalion in Cisarua.

Following the Dutch surrender to the invading Japanese forces in March 1942, Suharto abandoned his KNIL uniform and went back to Wurjantoro. After months of unemployment, he then became one of thousands of Indonesians who took the opportunity to join Japanese-organised security forces by joining the Yogyakarta police force. On October 1943, Suharto was transferred from the police force to the newly formed Japanese-sponsored militia, the PETA (Defenders of the Fatherland) in which Indonesians served as officers. In his training to serve at the rank of shodancho (platoon commander) he encountered a localised version of the Japanese bushido, or "way of the warrior", used to indoctrinate troops. This training encouraged an anti-Dutch and pro-nationalist thought, although toward the aims of the Imperial Japanese militarists. The encounter with a nationalistic and militarist ideology is believed to have profoundly influenced Suharto's own way of thinking.

Suharto was posted at a PETA coastal defence battalion at Wates, south of Yogyakarta, until he was admitted for training for company commander (chudancho) in Bogor from April to August 1944. As company commander, he conducted training for new PETA recruits in Surakarta, Jakarta, and Madiun. The Japanese surrender and Proclamation of Indonesian Independence in August 1945 occurred when Suharto was posted at remote Brebeg area (on the slopes of Mount Wilis) to train new NCOs to replace those executed by the Japanese in the aftermath of failed PETA rebellion of February 1945 in Blitar, led by Supriyadi.

Indonesian National Revolution

Following the declaration of Indonesian independence, Suharto disbanded his regiment in accordance with orders from the Japanese command and returned to Yogyakarta. As republican groups rose to assert Indonesian independence, Suharto helped to establish a fighting unit together with a former PETA colleague, Umar Slamet. This unit was amalgamated into the newly formed Indonesian armed forces (TKR). His leadership skills in leading several attacks against Japanese soldiers in Yogyakarta area to seize their weapons led to Suharto's promotion to major. He was given command of newly formed Battalion X of Regiment I which by October 1945 had secured control of the Yogyakarta area by forcing the surrender of remaining Japanese soldiers.

Upon the arrival of Allied forces in Indonesia, Suharto's Battalion X fought to repel a British advance towards Yogyakarta from British-occupied port of Semarang. In a series of battles at Magelang and Ambarawa lasting from late-October to December 1945, Republican forces forced the British to retreat to the confines of Semarang. Suharto was promoted to lead the newly formed Regiment III of Division III (2,250 men) with the rank of lieutenant-colonel in early 1946. Suharto participated in a battle at Kendal where Division III successfully halted a southward advance by the Dutch T ("Tijger") Brigade from Semarang. In June 1946, Lieutenant-Colonel Sunarto Kusumodirdjo invited Suharto to draft the working guidelines for the Battle Leadership Headquarters (MPP), a body created to organise and unify the command structure of the Indonesian nationalist forces.

During the " 3 July Affair", Suharto assisted forces loyal to the government arrest his commanding officer Major-General Sudarsono and release the kidnapped Prime Minister, Sjahrir, thus protecting himself from the subsequent purge of Division III in the aftermath of the affair. The 3 July Affair led to further restructuring of Division III. By August 1946, Suharto was head of Yogyakarta-based 22nd Regiment, one of the six regiments of Division III (now named the " Diponegoro Division") which is responsible for the Central Java area. According to Dutch intelligence reports, by mid-1947, Suharto's regiment consisted of four battalions who were regularly rotated northwards to the frontlines surrounding Semarang to help contain the Dutch forces there. Dutch intelligence reported that Suharto was assisting smuggling syndicates in the transport of opium through the territory he controlled with the help of Chinese-Indonesian merchant Liem Sioe Liong to be bartered with weapons, clothes, food, and other supplies.

On 21 July 1947, the Dutch launched Operatie Product, a military invasion into Republican-held areas. In Central Java, the Dutch T-Brigade pushed the Republican forces from Semarang to Magelang before a United Nations-brokered ceasefire was announced on 4 August. Suharto led his troops in the defence against this assault, and later was regularly rotated as frontline commander responsible for guarding the ceasefire line ( Van Mook Line) north of Yogyakarta.

On 26 December 1947, Suharto married Siti Hartinah (known as Madam Tien), the daughter of a minor noble in the Mangkunegaran royal house of Solo. The arranged marriage was enduring and supportive, lasting until Tien's death in 1996. The couple had six children: Siti Hardiyanti Rukmana (Tutut, born 1949), Sigit Harjojudanto (born 1951), Bambang Trihatmodjo (born 1953), Siti Hediati (Titiek, born 1959), Hutomo Mandala Putra (Tommy, born 1962), and Siti Hutami Endang Adiningish (Mamiek, born 1964).

In September 1948, Suharto was sent to meet PKI ( Indonesian Communist Party) chairman Musso in an unsuccessful attempt to peacefully end the Madiun Uprising. By end-October, government forces had quashed the rebellion. The affair left strong religious and political hatreds against communists, which in turn were a major influence on the reaction of Suharto and his army colleagues to the 30 September Movement in 1965.

On 19 December 1948, the Dutch launched " Operatie Kraai" initiated with airborne assault on Yogyakarta, which resulted in the capture of Republican civilian leaders while forcing Republican forces to the countryside to wage guerilla warfare according the Republican commander Sudirman's Wehrkreise strategy. Suharto led the Wehrkreise III operating from Menoreh hills in Bantul area, which from January–February 1949 killed 44 Dutch soldiers from the T-Brigade. In dawn raids on 1 March 1949, Suharto's forces and local militia captured large parts of Yogyakarta, holding it until noon. Suharto's later accounts had him as the lone plotter, although other sources say Sultan Hamengkubuwono IX of Yogyakarta and Division III commander ordered the attack. However, General Nasution said that Suharto took great care in preparing the "General Offensive" (Serangan Umum). Civilians sympathetic to the Republican cause within the city had been galvanised by the show of force which proved that the Dutch had failed to win the guerrilla war. Internationally, the United Nations Security Council pressured the Dutch to cease the military offensive and to re-commence negotiations which led to release of Republican leaders on July 1949 and Dutch transfer of sovereignty to United States of Indonesia on 27 December 1949. Suharto was responsible for the take-over of Yogyakarta city from withdrawing Dutch on June 1949.

Post-Independence military career

By 1950, Suharto served as commander of Brigade X ("Garuda Mataram Brigade") of Diponegoro Division, consisting of four battalions of around 800 men each. From April to September 1950, Suharto his brigade to Makassar as part of expeditionary force to suppress a rebellion of former KNIL supporters of the Dutch-established State of East Indonesia led by Andi Azis ( Makassar Uprising). During his stay in Makassar, Suharto became acquainted with his neighbours the Habibie family, whose eldest son Bacharuddin Jusuf Habibie would later become Suharto's vice-president and went on to succeed him as president. Suharto's brigade later engaged in the difficult mission of disarming and integrating both former KNIL soldiers and former pro-Republican guerrillas into the army. His brigade defeated an unruly former guerrilla unit under Arief Rate (who was killed) and hostile former KNIL soldiers in heavy urban combat in Makassar city centre during June 1950, losing seventeen men killed in action.

On November 1951, Suharto was appointed to lead enlarged Pragola Brigade (consisting of nine battalions) based in Salatiga. On December 1951, one of Suharto's battalions (Battalion 426) which consisted of former Islamic militias, rebelled in support of ongoing Darul Islam insurgency in West Java. From late-December 1951 to late-January 1952, Suharto led "Operasi Merdeka Timur V" which successfully defeated the rebellious battalion in vicious fighting in Klaten area.

On March 1953, Suharto was appointed commander of Infantry Regiment III consisting of four battalions (3,704 men) based in Surakarta, organizing its participation in battling Darul Islam insurgents in northwestern Central Java and anti-bandit operations in Mount Merapi area. He also sought to stem pervasive leftist sympathies amongst his troops (one of his leftist-leaning subordinates in this period was Untung bin Sjamsuri who would later lead the 30 September Movement in 1965). His experience in this period left Suharto with deep distaste for both Islamic and communist radicalism which he believed could be countered only with material and financial sufficiency on the part of the people.

On 3 September 1956 Suharto was promoted to command the Diponegoro Division with the rank of colonel, based in Semarang and responsible for Central Java and Yogyakarta provinces. Upon a series of anti-Jakarta "regional coups" by military commanders in Sumatra and Sulawesi islands, and the subsequent declaration of martial law by President Sukarno on March 1957, Suharto became regional martial law administrator for the two provinces. With wide-ranging power over civilian affairs in his hands, Suharto used this new authority to establish charitable organizations ("jajasan") to raise money to supplement his troops’ wages. The charities would receive "donations" from enterprises operating in the provinces and levy "unofficial tax" on the provision of goods and services. Suharto also organized bartering of sugar and copra to Singapore in exchange for food supplies. By 1959, Suharto's charities had acquired capital of Rp 75,750,800.

The defeat of the PRRI-Permesta rebellions (in which Suharto's divisional soldiers were heavily involved) was followed by President Sukarno's decree of 5 July 1959 concentrating power at the president. In 1959, an army investigation found that while some of the proceeds from Suharto's jajasans were used for charitable purposes, most of the money raised could not be accounted for, and on 1 November 1959 Suharto was removed from his divisional command to attend army staff and command training (SSKAD) in Bandung.

While in Bandung, he was promoted to brigadier-general on January 1960. Suharto graduated from SSKAD on December 1960 with a thesis on greater military role in political, economic, and social development of Indonesia. He was then appointed as operational deputy to army chief-of-staff based in Jakarta. On March 1961, he was given an additional command, as head of the army's new general reserve force called Tjadangan Umum Angkatan Darat / TJADUAD (later renamed Komando Strategis Angkatan Darat / KOSTRAD), a ready-reaction air-mobile force. Additionally, he was appointed to lead the new army air-defence command (Komando Pertahanan Udara Angkatan Darat / KOHANUDAD) on October 1961.

In January 1962, Suharto was promoted to the rank of major-general and appointed to lead the Mandala Command, a Makassar-based joint army-navy-air force command of 42,000 soldiers formed to organize the military aspect of the campaign to win Netherlands New Guinea (dubbed "West Irian") from the Dutch who were preparing it for independence outside of Indonesia. Suharto organized the infiltration of around 3,000 Indonesian soldiers into the disputed territory by air and sea, although these infiltrators were mostly dropped deep in the jungle with no effect on Dutch control over population centers. With massive Soviet armaments and even manpower aid, Suharto formulated a highly risky plan to invade and capture Dutch military headquarters in Biak using 25,000 soldiers in an airborne and amphibious operation code-named Operasi Djajawidjaja set for 15 August 1962. However, the plan was aborted as on 15 August, the Dutch signed the New York Agreement whereby control over West Irian was relinquished to UNTEA (United National Temporary Executive Authority) on October 1962, who relinquished control to Indonesia on May 1963.

After the disbandment of Mandala Command on May 1963, Suharto returned to Jakarta to his post as KOSTRAD commander. He was appointed deputy head of an army advisory board on senior-level promotions (WANDJAKTI) in July 1963. Suharto used his KOSTRAD command to establish several jajasans which ostensibly functioned to raise funds to cover KOSTRAD's operational needs. On April 1964, Suharto established Jajasan Darma Putra, which over-time acquired shares in a range of businesses including transportation, banking, and manufacturing sectors (such as Mandala Airlines and Bank Windu Kentjana).

In May 1964, Sukarno declared Konfrontasi against the newly formed Malaysia, with the stated objective of establishing "State of North Kalimantan" under leadership of North Kalimantan Communist Party. Suharto was appointed KOLAGA (Komando Mandala Siaga) first deputy with authority over operational affairs. KOLAGA was a military command which organized infiltration of Indonesian soldiers and volunteers (as well as Malaysian communists) into Malaysia where they engaged in jungle warfare with British and Commonwealth soldiers deployed to protect the nascent Malaysia.

While publically supportive of Sukarno's Konfrontasi policy, the army leadership was reluctant to commit to the military confrontation against Malaysia, which they considered to benefit only the PKI at expense of the military. Unlike army chief, Ahmad Yani, who barely disguised his disapproval of Konfrontasi policy, Suharto maintained a public appearance as a supporter of Sukarno's anti-Malaysian policies. On August 1964, Suharto authorised KOSTRAD's intelligence officer Ali Murtopo to send several officers to spread secret peace-feelers to the Malaysian government. Suharto's position in KOLAGA also provided him with opportunities to organize the smuggling of rubber, timber, and other primary products from North Sumatra to Malaysia using ethnic-Chinese fishermen.

Overthrow of Sukarno (1965)

Background

Tensions between the military and communists increased in April 1965, when Sukarno endorsed the immediate implementation of the PKI’s proposal for a "fifth armed force" consisting of armed peasants and workers. However, this idea was rejected by the army’s leadership as being tantamount to the PKI establishing its own armed forces. In May, the " Gilchrist Document" aroused Sukarno's fear of a military plot to overthrow him, a fear which he mentioned repeatedly during the next few months. On his independence day speech in August, Sukarno declared his intention to commit Indonesia to an anti-imperialist alliance with China and other communist regimes, and warned the Army not to interfere.

While Sukarno devoted his energy for domestic and international politics, the economy of Indonesia deteriorated rapidly with worsening widespread poverty and hunger, while foreign debt obligations became unmanageable and infrastructure crumbled. Sukarno's Guided Democracy stood on fragile grounds due to the inherent conflict between its two underlying support pillars, the military and the communists. The military, nationalists, and the Islamic groups were shocked by the rapid growth of the communist party under Sukarno's protection. They feared immenent establishment of communist state in Indonesia. By 1965, the PKI had 3 million members, and were particularly strong in Central Java and Bali. PKI has become the strongest political party in Indonesia.

Abortive coup and anti-communist purge

Before dawn on 1 October 1965, six army generals were kidnapped and executed in Jakarta by soldiers from the Presidential Guard, Diponegoro Division, and Brawidjaja Division. Soldiers occupied Merdeka Square including the areas in front of the Presidential Palace, the national radio station, and telecommunications centre. At 7:10 am Untung bin Sjamsuri announced on radio that the " 30 September Movement" had forestalled a coup attempt on Sukarno by "CIA-backed power-mad generals", and that it was "an internal army affair". The 30 September Movement never made any attempt on Suharto's life. Suharto had been in Jakarta army hospital that evening with his three-year-old son Tommy who had a scalding injury. It was here that he was visited by Colonel Abdul Latief, a key member of 30 September Movement and close family friend of Suharto. According to Latief's later testimony, the conspirators assumed Suharto to be a Sukarno-loyalist, hence Latief went to inform him of the impending kidnapping plan to save Sukarno from treacherous generals, upon which Suharto seemed to offer his neutrality.

Upon being told of the killings, Suharto went to KOSTRAD headquarters just before dawn from where he could see soldiers occupying Merdeka Square. He mobilized KOSTRAD and RPKAD (now Kopassus) special forces to seize control of the centre of Jakarta, capturing key strategic sites including the radio station without resistance. Suharto announced over the radio at 9:00 pm that six generals had been kidnapped by "counter-revolutionaries" and that the 30 September Movement actually intended to overthrow Sukarno. He said he was in control of the army, and that he would crush the 30 September Movement and safeguard Sukarno. Suharto issued an ultimatum to Halim Air Force Base, where the G30S had based themselves and where Sukarno, air force commander Omar Dhani and PKI chairman Dipa Nusantara Aidit had gathered, causing them to disperse before Suhartoist soldiers occupied the air base on 2 October after short fighting. With the failure of the poorly organised coup, and having secured authority from the president to restore order and security, Suharto's faction was firmly in control of the army by 2 October (he was officially appointed army commander on 14 October). On 5 October, Suharto led a dramatic public ceremony to bury the generals' bodies.

Complicated and partisan theories continue to this day over the identity of the attempted coup's organisers and their aims. The army's version, and subsequently that of the "New Order", was that the PKI was solely responsible. A propaganda campaign by the army as well as Islamic and Catholic student groups under the banner of Komando Aksi Pengganjangan G30S (KAP-Gestapu), the "Action Command for the Crushing of 30 September Movement", convinced both Indonesian and international audiences that it was a communist coup attempt, and that the killings were cowardly atrocities against Indonesian heroes. The army in alliance with religious civilian groups led a campaign to purge Indonesian society, government, and armed forces of the communist party and leftist organisations. The purge spread from Jakarta to much of the rest of the country. (see: Indonesian killings of 1965–1966). The most widely accepted estimates are that at least half a million were killed. As many as 1.5 million were imprisoned at one stage or another. As a result of the purge, one of Sukarno's three pillars of support, the Indonesian Communist Party, was effectively eliminated by the other two, the military and political Islam.

Power struggle

Sukarno continued to command loyalty from large sections of the armed forces as well as the general population, thus Suharto was careful not to be seen to be seizing power in his own coup. For eighteen months following the quashing of the 30 September Movement, there was a complicated process of political manoeuvres against Sukarno, including student agitation, stacking of parliament, media propaganda and military threats.

In January 1966, university students under the banner of KAMI, begin demonstrations against the Sukarno government voicing demands for the disbandment of PKI and control of hyperinflation. The students received support and protection with the army, with Suharto often engaging in coordination meetings with student leaders. Street fights broke out between the students and pro-Sukarno loyalists with the pro-Suharto students prevailing due to army protection.

In February 1966, Sukarno promoted Suharto to lieutenant-general (and to full general in July 1966). The killing of student Arief Rachman Hakim during demonstrations outside Merdeka Palace and Sukarno's order for disbandment of KAMI on February 1966 further galvanised public opinion against the president. On 11 March 1966, appearance of unidentified troops around Merdeka Palace during a cabinet meeting (which Suharto failed to attend) forced Sukarno to flee to Bogor Palace (60 km away) by helicopter. Three Suhartoist generals, Major-General Basuki Rahmat, Brigadier-General M Jusuf, and Brigadier-General Amirmachmud went to Bogor to meet Sukarno. There, they managed to secure a presidential decree giving Suharto authority to take any action necessary to maintain security. This document would later be known as "Decree of 11 March" (Surat Perintah Sebelas Maret / Supersemar).

Using the Supersemar letter, Suharto ordered the banning of PKI the following day, and proceeded to purge the parliament, the government and military from pro-Sukarno elements, accusing them as communist sympathisers. The army arrested 15 cabinet ministers and forced Sukarno to appoint a new cabinet consisting of Suharto supporters. The army arrested pro-Sukarno and pro-communist members of MPRS (parliament), and Suharto replaced chiefs of the navy, air force, and the police force with his supporters, who then began an extensive purge within each services.

In June 1966, the now-purged parliament passed 24 resolutions including the banning of Marxism-Leninism, ratifying the Supersemar, and stripping Sukarno of his title of president for life. Against the wishes of Sukarno, the government ended Konfrontasi with Malaysia and rejoined the United Nations (Sukarno had removed Indonesia from the UN in the previous year). Suharto did not seek Sukarno's outright removal at this MPRS session due to the remaining support for the president amongst elements of the armed forces (particularly the Marines, the navy, and some regional army divisions).

By January 1967, Suharto felt confident that he has removed all significant support for Sukarno within the armed forces, and MPRS decided to hold another session to impeach Sukarno. On 22 February 1967, Sukarno announced he will resign from the presidency, and on 12 March, the MPRS session stripped him of his remaining power and named Suharto acting president. Sukarno was placed under house arrest in Bogor Palace; little more was heard from him, and he died in June 1970. On 27 March 1968, the MPRS appointed Suharto for the first of his five-year terms as President.

The "New Order" (1967–1998)

Consolidation of power

Ideology

Suharto promoted his "New Order", as opposed to Sukarno's "Old Order", as a society based on the Pancasila ideology. Further, the Dwifungsi ("Dual Function") policy allowed the military to have an active role in all levels of Indonesian government, economy, and society. Pancasila, a rather vague and generalist set of principles originally formulated by Sukarno in 1945, was vigorously promoted as a sacrosanct national ideology which represents the ancient wisdom of Indonesian people even before the entry of foreign-based religions such as Hinduism or Islam. In a July 1982 speech which reflected his deep infatuation with Javanese beliefs, Suharto glorified Pancasila as a key to reach the perfect life (ilmu kasampurnaning hurip) of harmony with God and fellow mankind.

After initially being careful not to offend sensitivities of Islamic scholars who feared Pancasila might develop into a quasi-religious cult, Suharto eventually secured a parliamentary resolution in 1983 (Tap MPR No 11/1983) which obliged all organisations in Indonesia to adhere to Pancasila as basic principle. He also instituted Pancasila indoctrination program (Penataran P4) that must be regularly attended by all Indonesians, from primary school students to office workers. In practice, however, the vagueness of Pancasila was exploited by Suharto's government to justify their actions and to condemn their opponents as "anti-Pancasila".

Neutralization of internal dissent

Having been appointed president, Suharto still needed to share power with various elements including Indonesian generals who considered Suharto as mere primus inter pares and Islamic and student groups who participated in the anti-communist purge. Suharto, aided by his "Office of Personal Assistants" ( Aspri) clique of military officers from his days as commander of Diponegoro Division, particularly Ali Murtopo, began to systematically cement his hold on power by subtly sidelining potential rivals while rewarding loyalists with political position and monetary incentives.

Having successfully stood-down MPRS chairman General Nasution's 1968 attempt to introduce bill which will severely curtail presidential authority, Suharto had him removed from his position as MPRS chairman in 1969 and forced his early retirement from the military in 1972. In 1967, generals Hartono Rekso Dharsono, Kemal Idris, and Sarwo Edhie Wibowo (dubbed "New Order Radicals") opposed Suharto's decision to allow participation of existing political parties in elections in favour of a non-ideological two-party system similar to those found in many Western countries. Suharto then proceeded to send Dharsono overseas as ambassador, while Kemal Idris and Sarwo Edhie Wibowo were sent to distant North Sumatera and South Sulawesi as regional commanders.

Suharto's previously strong relationship with the student movement soured over the increasing authoritarianism and corruption of his regime. While many original leaders of the 1966 student movement (Angkatan '66) was successfully co-opted into the regime, Suharto was faced with large student demonstrations challenging the legitimacy of 1971 elections ("Golput" movement), the costly construction of Taman Mini Indonesia Indah theme park (1972), the domination of foreign capitalists ( Malari Incident of 1974), and lack of term limits of Suharto's presidency (1978). The regime responded by imprisoning many student activists (such as future national figures Dorodjatun Kuntjoro-Jakti, Adnan Buyung Nasution, Hariman Siregar, and Sjahrir) and even sending army units to occupy university campus of ITB ( Bandung Institute of Technology) from January–March 1978. On April 1978, Suharto moved decisively by issuing decree on "Normalization of Campus Life" (NKK) which prohibited political activities on-campus not related to academic pursuits.

On 15–16 January 1974, Suharto faced a significant challenge when violent riots broke-out in Jakarta during visit of Japanese prime minister Kakuei Tanaka. Students demonstrating against increasing dominance of Japanese investors was encouraged by General Sumitro, deputy commander of armed forces. Sumitro was an ambitious general who disliked the strong influence of Suharto's Aspri inner circle. It was reported to Suharto that the riots were engineered by Sumitro who wished to destabilize the regime utilizing the student unrest, resulting in Sumitro's dismissal and forced retirement. This incident is referred as Malari Incident (Malapetaka Lima Belas Januari / Disaster of 15 January). However, Suharto also disbanded Aspri to appease popular dissent.

In 1980, fifty prominent figures political figures signed the Petition of Fifty which criticised Suharto's use of Pancasila to silence his critics. Suharto refused to address the petitioners' concerns, and some of them were imprisoned with others having restrictions imposed on their movements.

Domestic politics and security

To placate demands from civilian politicians for the holding of elections, as manifested in MPRS resolutions of 1966 and 1967, Suharto government formulated a series of laws regarding elections as well as the structure and duties of parliament which were passed by MPRS on November 1969 after protracted negotiations. The law provided for a parliament (Madjelis Permusjawaratan Rakjat/MPR) with the power to elect presidents, consisting of a lower house ( Dewan Perwakilan Rakjat/DPR) and regional representatives. 100 of the 460 members of DPR will be directly appointed by the government, while the remaining seats were allocated to political parties based on results of general election. This mechanism ensures significant government control over legislative affairs, particularly the appointment of presidents.

To participate in the elections, Suharto realized the need to align himself with a political party. After initially considering alignment with Sukarno's old party the PNI, in 1969 Suharto decided to take-over control of an obscure military-run federation of NGOs called Golkar ("Functional Group") and transform it into his electoral vehicle under the coordination of his right-hand man Ali Murtopo. The first general election was held on 3 July 1971 with ten participants; consisting of Golkar, four Islamic parties, as well as five nationalist and Christian parties. Campaigning on a non-ideological platform of "development", and aided by official government support and subtle intimidation tactics, Golkar managed to secure 62.8% of the popular vote. The March 1973 general session of newly-elected MPR promptly appointed Suharto to second-term in office with Sultan Hamengkubuwono IX as vice-president.

On 5 January 1973, to allow better control, the government forced the four Islamic parties to merge into PPP (Partai Persatuan Pembangunan/United Development Party) while the five non-Islamic parties were fused into PDI (Partai Demokrasi Indonesia/Indonesian Democratic Party). The government ensured that these parties never developed effective opposition by controlling their leadership, while establishing the "re-call" system to remove any outspoken legislators from their positions. Using this system dubbed the " Pancasila Democracy", Suharto was re-elected unopposed by the MPR in 1978, 1983, 1988, 1993, and 1998. Golkar won landslide majorities in the MPR at every election, ensuring that Suharto would be able to pass his agenda with virtually no opposition. For all intents and purposes, he held all governing power in the nation.

Suharto proceeded with various social engineering projects designed to transform Indonesian society into a de-politicized "floating mass" supportive of the national mission of "development", a concept similar to corporatism. The government formed various civil society groups to unite the populace in support of government programs. For instance, the government created Korpri (Korps Pegawai Republik Indonesia) on November 1971 as union of civil servants to ensure their loyalty, organized the FBSI (Federasi Buruh Seluruh Indonesia) as the only legal labour union on February 1973, and established the MUI in 1975 to control Islamic clerics. In 1966 to 1967, to promote assimiliation of the influential Chinese-Indonesians, the Suharto government passed several laws as part of so-called "Basic Policy for the Solution of Chinese Problem", whereby only one Chinese-language publication (controlled by the army) was allowed to continue, all Chinese cultural and religious expressions (including display of Chinese characters) were prohibited from public space, Chinese schools were phased-out, and the ethnic-Chinese were encouraged to take-up Indonesian-sounding names. In 1968, Suharto commenced the very successful family-planning program (Keluarga Berentjana / KB) to stem the huge population growth rate and hence increasing per-capita income. A lasting legacy from this period is the spelling reform of Indonesian language decreed by Suharto on 17 August 1972.

Suharto relied on the military to ruthlessly maintain domestic security, organized by the Kopkamtib (Operation Command for the Restoration of Security and Order) and BAKIN (State Intelligence Coordination Agency). To maintain strict control over the country, Suharto expanded the army's territorial system down to village-level, while military officers were appointed as regional heads under the rubric of the Dwifungsi ("Dual Function") of the military. By 1969, 70% of Indonesia's provincial governors and more than half of its district chiefs were active military officers. Suharto authorized Operasi Trisula which destroyed PKI-remnants trying to organize a guerilla base in Blitar area in 1968, and ordered several military operations which ended the communist PGRS-Paraku insurgency in West Kalimantan (1967–1972). Attacks on oil workers by the first incarnation of Free Aceh Movement separatists under Hasan di Tiro in 1977 led to dispatch of small special forces detachments who quickly either killed or forced the movement's members to flee abroad. Notably, on March 1981, Suharto authorised a successful special forces mission to end hijacking of a Garuda Indonesia flight by Islamic extremists at Don Muang Airport in Bangkok.

To comply with New York Agreement of 1962 which required a plebiscite on integration of West Irian into Indonesia before end of 1969, the Suharto government begin organizing for a so-called " Act of Free Choice" scheduled on July–August 1969. The government sent RPKAD special forces under Sarwo Edhie Wibowo which secured the surrender of several bands of former Dutch-organized militia (Papoea Vrijwilligers Korps / PVK) at large in the jungles since the Indonesian takeover in 1963, while sending Catholic volunteers under Jusuf Wanandi to distribute consumer goods to promote pro-Indonesian sentiments. On March 1969, it was agreed that the plebiscite will be channeled via 1,025 tribal chiefs, citing the logistical challenge and political ignorance of the population. Using the above strategy, the plebiscite produced a unanimous decision for integration with Indonesia, which was duly noted by United Nations General Assembly on November 1969.

Economy

To stabilize the economy and to ensure long-term support for the New Order, Suharto’s administration enlisted a group of mostly American-educated Indonesian economists, dubbed the " Berkeley Mafia", to formulate significant changes in economic policy. By cutting subsidies, decreasing government debt, and reforming the exchange rate mechanism, inflation was lowered from 660% in 1966 to 19% in 1969. The threat of famine was alleviated by influx of USAID rice aid shipments in 1967 to 1968.

With a lack of domestic capital that was required for economic growth, the New Order reversed Sukarno's economic self-sufficiency policies and opened selected economic sectors of the country to foreign investment. Suharto travelled to Western Europe and Japan to promote investment in Indonesia. The first foreign investors to re-enter Indonesia included mining companies Freeport Sulphur Company and International Nickel Company. From 1967, the government secured low-interest foreign aid from ten countries grouped under the Inter-Governmental Group on Indonesia (IGGI) to cover its budget deficit.

Following government regulatory frameworks, domestic entrepreneurs (mostly Chinese-Indonesians) emerged in the late 1960s and early 1970s in the import-substitution light-manufacturing sector such as Astra Group and Salim Group.

With the IGGI funds and the later the jump in oil export revenue from the 1973 oil crisis, the government invested in infrastructure under a series of five-year plans, dubbed REPLITA I to V from 1969 to 1994.

Suharto created a network of charitable organizations ("yayasan") run by the military and his family members, which extracted "donations" from domestic and foreign enterprises in exchange for necessary government support and permits. While some proceeds were used for charitable purposes, much of the money was re-cycled as slush fund to reward political allies and to maintain support for the New Order.

In 1975, the state-owned oil company, Pertamina, defaulted on its foreign loans as a result of mismanagement and corruption under the leadership of Suharto’s close ally, Ibnu Sutowo. The government bail-out of the company nearly doubled the national debt.

Foreign policy

Upon assuming power, Suharto government adopted policy of neutrality in the Cold War with quiet alignment with the Western bloc (including Japan and South Korea) with the objective of securing support for Indonesia's economic recovery. Western countries, impressed by Suharto's strong anti-communist credentials, were quick to offer their support. Diplomatic relations with China was suspended on October 1967 due to suspicion of Chinese involvement in 30 September Movement (diplomatic relations was only restored in 1990). Due to Suharto's destruction of PKI, Soviet Union embargoed military sales to Indonesia. However, from 1967 to 1970 foreign minister Adam Malik managed to secure several agreements to restructure massive debts incurred by Sukarno from Soviet Union and other Eastern European communist states. Regionally, having ended confrontation with Malaysia on August 1966, Indonesia became a founding member of Association of Southeast Asian Nations (ASEAN) on August 1967. This organization is designed to establish peaceful relationship between Southeast Asian countries free from conflicts such as ongoing Vietnam War.

In 1974, the neighbouring colony of Portuguese Timor descended into civil war after the withdrawal of Portuguese authority following the Carnation Revolution, whereby the leftist-leaning Fretilin (Frente Revolucionária de Timor-Leste Independente) emerged triumphant. With approval from Western countries (including from US president Gerald Ford and Australian prime minister Gough Whitlam during their visits to Indonesia), Suharto decided to intervene to prevent establishment of a communist state. After an unsuccessful attempt of covert support to Timorese anti-communist groups UDT and APODETI, Suharto authorized full-scale invasion of the colony on 7 December 1975 followed with its official annexation as Indonesia's 27th province of East Timor in July 1976. The "encirclement and annihilation" campaigns of 1977–1979 broke the back of Fretilin control over the hinterlands, although continuing guerilla resistance forced the government to maintain strong military presence in the half-island until 1999. An estimated minimum of 90,800 and maximum of 213,600 conflict-related deaths occurred in East Timor during Indonesian rule (1974–1999); namely, 17,600–19,600 killings and 73,200 to 194,000 'excess' deaths from hunger and illness, although Indonesian forces were responsible for only about 70% of the violent killings.

Apex of power

Socio-economic progress and growing corruption

Real socio-economic progress sustained support for Suharto's regime across three decades. By 1996, Indonesia's poverty rate has dropped to around 11% compared with 45% in 1970. From 1966 to 1997, Indonesia recorded real GDP growth of 5.03% pa, pushing real GDP per capita upwards from US$ 806 to US$ 4,114. In 1966, manufacturing sector made-up less than 10% of GDP (mostly industries related to oil and agriculture). By 1997, manufacturing had risen to 25% of GDP whereby 53% of exports consisted of manufactured products. The government invested into massive infrastructure development (notably the launching of series of Palapa telecommunication satellites), consequently Indonesian infrastructure in mid-1990s was considered at par with China. Suharto was keen to capitalize on such achievements to justify his regime, and an MPR resolution in 1983 granted him the title of "Father of Development".

Suharto government's health-care programs (such as the Puskesmas program) increased life expectancy from 47 years (1966) to 67 years (1997) while cutting infant mortality rate by more than 60%. The government's Inpres program launched in 1973 resulted in primary school enrollment ratio reaching 90% by 1983 while almost eliminating education gap between boys and girls. Sustained support for agriculture resulted in Indonesia reaching rice self-sufficiency by 1984, an unprecedented achievement which earns Suharto a gold medal from FAO on November 1985.

In early 1980s, Suharto government responded to fall in oil exports due to the 1980s oil glut by successfully shifting pillar of the economy into export-oriented labour intensive manufacturing, made globally competitive by Indonesia's low wages and a series of currency devaluations. Industrialization was mostly undertaken by ethnic-Chinese companies which evolved into immense conglomerates dominating the nation's economy. The largest conglomeracies are the Salim Group led by Liem Sioe Liong (Sudono Salim), Sinar Mas Group led by Oei Ek Tjong (Eka Tjipta Widjaja), Astra Group led by Tjia Han Poen (William Soeryadjaya), Barito Pacific Group led by Pang Djun Phen (Prajogo Pangestu), and Nusamba Group led by Bob Hasan. Suharto decided to support the growth of small number of Chinese-Indonesian conglomerates since they cannot pose political challenge due to their ethnic-minority status, but from his past experience he deemed them to possess the skills and capital needed to create real growth for the country. In exchange for Suharto's patronage, the conglomerates provided vital financing for his "regime maintenance" activities.

In late 1980s, Suharto government decided to de-regulate the banking sector to encourage savings and providing domestic source of financing required for growth. Suharto decreed the "October Package of 1988" (PAKTO 88) which eased requirements for establishing banks and extending credit; resulting in a 50% increase in number of banks from 1989–1991. To promote savings, the government introduced the TABANAS program to the populace. Jakarta Stock Exchange, re-opened in 1977, recorded bull-run due to spree of domestic IPOs and influx of foreign funds after deregulation in 1990. The sudden availability of credit fueled strong economic growth in the early 1990s, but the weak regulatory environment of the financial sector sowed the seeds of the catastrophic crisis in 1997 which eventually destroyed Suharto's regime.

The growth of the economy is coincided by rapid expansion in corruption, collusion, and nepotism (Korupsi, Kolusi, dan Nepotisme / KKN). In the early 1980s, Suharto's children, particularly Siti Hardiyanti Rukmana ("Tutut"), Hutomo Mandala Putra ("Tommy"), and Bambang Trihatmodjo, has grown into greedy adults. Their companies were given lucrative government contracts and protected from market competition by monopolies. Examples include the toll-expressway market which was monopolized by Tutut, national car project monopolized by Bambang and Tommy, and even the cinema market monopolized by 21 Cineplex owned by Suharto's cousin Sudwikatmono. The family is said to control about 36,000 km² of real estate in Indonesia, including 100,000 m² of prime office space in Jakarta and nearly 40% of the land in East Timor. Additionally, Suharto's family members received free shares in 1,251 of Indonesia's most lucrative domestic companies (mostly run by Suharto's ethnic-Chinese cronies), while foreign-owned companies were encouraged to establish "strategic partnerships" with Suharto family's companies. Meanwhile, the myriad of yayasans run by Suharto family grew even larger, levying millions of dollars in "donations" from the public and private sectors each year.

Grip on power

By the 1980s, Suharto's grip on power was maintained by the emasculation of civil society, engineered elections, and use of the military's coercive powers. Upon his retirement from the military in June 1976, Suharto undertook a re-organization of the armed forces that concentrated power away from commanders to the president. On March 1983, he appointed General Leonardus Benjamin Moerdani as head of the armed forces who adopted a hardline on elements who challenge the regime. As a Roman Catholic, he was not a political threat to Suharto.

From 1983 to 1985, army squads killed up to 10,000 suspected criminals in response to a spike in the crime rate (see " Petrus Killings"). Suharto's imposition of Pancasila as the sole ideology caused protests from conservative Islamic groups who considered the Islamic law to be above all other conceptions. The Tanjung Priok massacre saw the army kill up to 100 conservative Muslim protesters in September 1984. A retaliatory series of small bombings (notably the bombing of Borobudur Temple) led to arrests of hundreds of conservative Islamic activists, ranging from future parliamentary leader AM Fatwa to Abu Bakar Bashir (later leader of Jemaah Islamiyah). Attacks on police by a resurgent Free Aceh Movement in 1989 led to a military operation which killed 2,000 people and ended the insurgency by 1992. In 1984, the Suharto government sought increased control over the press by issuing a law requiring all media to possess a press operating licence (SIUPP) which could be revoked at any time by Ministry of Information.

In the international arena, Western concern over communism waned with end of Cold War, and Suharto's human rights record came under greater international scrutiny, particularly following the 1991 Santa Cruz Massacre in East Timor. Realizing this trend, Suharto sought wider alliances under the rubric of economic development, away from over-reliance on American support. Suharto was elected as head of the Non-Aligned Movement in 1992, while Indonesia became a founding member of APEC in 1989 and host to the Bogor APEC Summit in 1994.

Domestically, the growing raparaciousness of Suharto's family created discontent amongst the military who lost access to power and lucrative rent-seeking opportunities. The March 1988 MPR session, military legislators attempted to pressure Suharto by unsuccessfully seeking to block nomination of Sudharmono, a Suharto-loyalist, as vice-president. After General Moerdani voiced his objections on Suharto family's corruption, the president dismissed him from the position of military chief. Suharto proceeded to slowly "de-militarize" his regime; he dissolved the powerful Kopkamtib on September 1988 and ensured key military positions were held by loyalists.

In an attempt to diversify his power base away from the military, Suharto begin courting support from Islamic elements. He undertook a much-publicized hajj pilgrimage in 1991, took up the name of Haji Mohammad Suharto, and began promoting Islamic values, and promoted the careers of Islamic-oriented generals. To win support from the nascent Muslim business community who resented dominance of Chinese-Indonesian conglomerates, Suharto formed the ICMI (Indonesian Islamic Intellectuals' Association) on November 1990, which was led by his protege BJ Habibie, the Minister for Research and Technology since 1978. During this period, race riots against ethnic-Chinese begin to occur quite regularly, beginning with April 1994 riot in Medan.

By the 1990s, Suharto's government came to be dominated by civilian politicians such as Habibie, Harmoko, Ginandjar Kartasasmita, and Akbar Tanjung, who owed their position solely to Suharto. As sign of Habibie's growing clout, when several prominent Indonesian magazines criticized Habibie's purchase of almost the entire fleet of the disbanded East German Navy in 1993 (most of the vessels were of scrap-value), Suharto ordered the offending publications to be closed down on 21 June 1994.

By the 1990s, elements the growing Indonesian middle class created by Suharto's economic development, were becoming restless with his autocracy and corruption of his children, fueling demands for " Reformasi" (reform) of the 30-year-old New Order system. By 1996, Megawati Sukarnoputri, the daughter of Sukarno and chairwoman of the normally compliant PDI, was becoming a rallying point for this growing discontent. In response, Suharto backed a co-opted faction of PDI led by Suryadi, which removed Megawati from the chair. On 27 July 1996, an attack by soldiers and hired thugs led by Lieutenant-General Sutiyoso on demonstrating Megawati supporters in Jakarta resulted in fatal riots and looting. This incident was followed by the arrest of 200 democracy activists, 23 of whom were kidnapped, and some killed, by army squads led by Suharto's son-in-law, Major-General Prabowo Subianto.

Downfall

The 1997 Asian financial crisis beginning on July 1997 in Thailand spread into Indonesia as foreign speculative investors pulled-out their investments, sucking US dollar liquidity in Indonesia and causing severe depreciation of the Indonesian rupiah. In the private sector, many Indonesian corporations had been borrowing heavily in lower-interest US dollar denomination while their revenues were mostly in rupiah; their debt rapidly increased as the US dollar appreciates, leaving many companies virtually bankrupt. These companies desperately sold rupiah and buy US dollar in the market, causing rupiah's value to drop from Rp 2,600 per dollar in August 1997 to over Rp 14,800 per dollar by January 1998. Efforts by the central bank to defend its managed float regime by selling dollar had little impact and instead drained Indonesia's foreign exchange reserves, forcing the government to free-float the currency and seek liquidity aid from IMF (International Monetary Fund).

In exchange for US$ 43 billion in liquidity aid, Suharto was forced to sign three letters of intent from October 1997 to April 1998 with the IMF. The LoI promised reforms which includes closing banks owned by Suharto's family and cronies starting on November 1997. Plan to close unhealthy banks resulted in a bank run that drained liquidity; depositors knew of the poor regulations and risky related-party credit extensions of Indonesian banks. On January 1998, the government was forced to provide emergency liquidity assistance (BLBI), issue blanket guarantee for bank deposits, and set-up Indonesian Bank Restructuring Agency to take-over management of troubled banks to prevent collapse of the financial system. Based on IMF recommendation, the government increased interest rates to 70% pa on February 1998 to control spiralling inflation caused by higher price of imports, but this action killed availability of credit to the corporate sector. Suharto's foot-dragging in undertaking reforms demanded by IMF in relation to his children's business further weakened public confidence. According to American economist Steve Hanke, invited by Suharto on February 1998 to plan currency board system, President Bill Clinton and IMF managing director Michel Camdessus deliberately worsened the Indonesian crisis to force Suharto to resign.

Economic meltdown was accompanied by increasing political tension. Anti-Chinese riots occurred in Situbondo (1996), Tasikmalaya (1996), Banjarmasin (1997), and Makassar (1997); while bloody ethnic clashes broke-out between the Dayak and Madurese settlers in Central Kalimantan in 1997. After violent campaign season, Golkar won the heavily-rigged May 1997 MPR elections. The new MPR voted unanimously to re-elect Suharto to another five-year term in office on March 1998, upon which he proceeded to appoint his protege BJ Habibie as vice-president while stacking the cabinet with his own family and business associates (his daughter Tutut became Minister of Social Affairs). Government's increase of fuel prices by 70% of 4 May triggered anti-Chinese rioting in Medan. With Suharto increasingly seen as the source of the country's mounting economic and political crises, prominent political figures spoke out against his presidency (notably Muslim politician Amien Rais), and on January 1998 university students began organizing nation-wide demonstrations.

The crisis climaxed when Suharto was on state visit to Egypt on May 1998. Security forces killed four student demonstrators from Jakarta's Trisakti University on 12 May 1998, which was followed by anti-Chinese rioting and looting across Jakarta and some other cities on 13–15 May that destroyed thousands of buildings and killed over 1,000 people. Various theories exist on the origins of the racial pogrom against the ethnic-Chinese. One theory suggested rivalry between military chief General Wiranto and Prabowo, while another theory suggested deliberate provocation by Suharto to divert blame for the crisis to the ethnic-Chinese and discredit the student movement.

On 16 May, tens of thousands of university students occupied parliament building, demanding Suharto's resignation. Upon Suharto's return to Jakarta, he tried to defend his presidency by offering to resign in 2003 and to reshuffle his cabinet. These efforts failed when his political allies deserted him by refusing to join the proposed new cabinet. According to military chief Wiranto, on 18 May, Suharto issued a decree which provided authority to him to take any measures to restore security (similar to the 1966 Supersemar), however Wiranto decided not to enforce the decree to prevent conflict with the population. On 21 May 1998, Suharto announced his resignation, upon which vice-president Habibie assumed the presidency in accordance with the constitution.

Post-presidency

After resigning from the presidency, Suharto reclused himself in his family compound in the Menteng area of Jakarta, protected by soldiers and rarely making public appearances. Suharto's family spend much of their time fending-off corruption investigations. However, Suharto himself was protected from serious prosecution by politicians who owed their positions to the former president, as indicated in the leaked telephone conversation between President Habibie and attorney-general Andi Muhammad Ghalib on February 1999.

In May 1999, Time Asia estimated Suharto's family fortune at US$15 billion in cash, shares, corporate assets, real estate, jewelry and fine art. Suharto sued magazine seeking more than $US 27 billion in damages for libel over the article. On 10 September 2007, Indonesia's Supreme Court awarded Suharto damages against Time Asia magazine, ordering it to pay him one trillion rupiah ($128.59 million). The High Court reversed the judgment of an appellate court and Central Jakarta district court (made in 2000 and 2001).

Suharto was placed highest on Transparency International's list of corrupt leaders with an alleged misappropriation of between US $15–35 billion during his 32-year presidency.

On 29 May 2000, Suharto was placed under house arrest when Indonesian authorities began to investigate the corruption during his presidency. In July 2000, it was announced that he was to be accused of embezzling US$571 million of government donations to one of a number of foundations under his control and then using the money to finance family investments. But in September court-appointed doctors announced that he could not stand trial because of his declining health. State prosecutors tried again in 2002 but then doctors cited an unspecified brain disease. On 26 March 2008, a civil court judge acquitted Suharto of corruption but ordered his charitable foundation, Supersemar, to pay US$110 m (£55 m).

In 2002, Suharto's son Tommy, was sentenced to 15 years jail. He had been convicted of ordering the killing of a judge who had sentenced him to 18 months jail for corruption and illegal weapons possession. In 2006, he was freed on "conditional release."

In 2003, Suharto's half-brother Probosutedjo was tried and convicted for corruption and the loss of $10 million from the Indonesian state. He was sentenced to four years in jail. He later won a reduction of his sentence to two years, initiating a probe by the Indonesian Corruption Eradication Commission into the alleged scandal of the "judicial mafia" which uncovered offers of $600,000 to various judges. Probosutedjo confessed to the scheme in October 2005, leading to the arrest of his lawyers. His full four-year term was reinstated. After a brief standoff at a hospital, in which he was reportedly protected by a group of police officers, he was arrested on 30 November 2005.

On 9 July 2007, Indonesian prosecutors filed a civil lawsuit against former President Suharto, to recover state funds ($440 m or £219 m, which allegedly disappeared from a scholarship fund, and a further $1.1 billion in damages).

Health crises

After resigning from the presidency, Suharto was hospitalised repeatedly for stroke, heart, and intestinal problems. His declining health hindered attempts to prosecute him as his lawyers successfully claimed that his condition rendered him unfit for trial. Moreover, there was little support within Indonesia for any attempts to prosecute him. In 2006, Attorney General Abdurrahman announced that a team of twenty doctors would be asked to evaluate Suharto's health and fitness for trial. One physician, Brigadier-General Dr Marjo Subiandono, stated his doubts about by noting that "[Suharto] has two permanent cerebral defects." In a later Financial Times report, Attorney General Abdurrahman discussed the re-examination, and called it part of a "last opportunity" to prosecute Suharto criminally. Attorney General Abdurrahman left open the possibility of filing suit against the Suharto estate."

Death

On 4 January 2008, Suharto was taken to the Pertamina hospital, Jakarta with complications arising from a weak heart, swelling of limbs and stomach, and partial renal failure. His health fluctuated for several weeks but progressively worsened with anaemia and low blood pressure due to heart and kidney complications, internal bleeding, fluid on his lungs, and blood in his feces and urine which caused a haemoglobin drop. On 23 January, Suharto's health worsened further, as a sepsis infection spread through his body. His family consented to the removal of life support machines, and he died on 27 January at 1:10 pm

Suharto's body was taken from Jakarta to the Giri Bangun mausoleum complex near the Central Java city of Solo. He was buried alongside his late wife in a state military funeral with full honours, with the Kopassus elite forces and KOSTRAD commandos as the honour guard and pallbearers and Commander of Group II Kopassus Surakarta Lt. Colonel Asep Subarkah. In attendance were the incumbent president, Susilo Bambang Yudhoyono as "Ceremony Inspector", and vice-president, government ministers, and armed forces chiefs of staff. Tens of thousands of people lined the streets to see the convoy. Condolences were offered by many regional heads of state, and Indonesia's President Susilo Bambang Yudhoyono declared a week of official mourning.