A country composed of hundreds of tropical islands in south-east Asia, in the region where the Pacific and the Indian Oceans meet.
Its east-west length is greater than the width of Australia or the USA, for among its larger islands are included parts of New Guinea (Irian Jaya) and Borneo (Kalimantan) and all of Sumatra, Java, and Sulawesi (once Celebes). Among its smaller islands are Bali, Timor, Flores, and the Moluccas. This vast area lies at the edge of the Eurasian plate. It contains over 70 volcanoes, some periodically active like Krakatoa; and it is subject to severe earthquakes. While many of the beaches are black with volcanic mud, others are coral, with very clear water.
Agriculture is important, principal exports being timber, coffee, rubber, shrimps, pepper, and palm oil, and Indonesia is the leading oil producer of the region. Other mining products include nickel, bauxite, copper, iron, and tin. Light industry and manufacturing are of growing importance.
The Hindu Srivijaya Empire, based on Palembang, flourished between the 7th and 13th centuries ad. Towards the end of the 12th century the Majapahit kingdom, which was based on Java began to dominate the area of present-day Indonesia. During the 16th century the area was occupied by the Portuguese, the British, and the Dutch. The Dutch East India Company had acquired control of most of the islands of Indonesia by the end of the 17th century, with headquarters in present-day Jakarta (then Batavia).
The islands were formed into the Netherlands-Indies in 1914. By the 1920s, indigenous political movements were demanding complete independence. Prominent here was Sukarno's Indonesian Nationalist Party (Partai Nasionalis Indonesia), banned by the Dutch in the 1930s. The Japanese occupation of 1942–45 strengthened nationalist sentiments, and, taking advantage of the Japanese defeat in 1945, Sukarno proclaimed Indonesian independence and set up a republican government. Dutch attempts to reassert control were met with popular opposition (the Indonesian Revolution), which resulted in the transfer of power in 1949. By 1957 parliamentary democracy had given way to the semi-dictatorship or ‘Guided Democracy’ of President Sukarno, a regime based on the original 1945 constitution, with a strong executive and special powers reserved for the army and bureaucracy. Sukarno's popularity began to wane after 1963, with the army and right-wing Muslim landlords becoming increasingly concerned about the influence of communists in government. Rampant inflation and peasant unrest brought the country to the brink of collapse in 1965–66 when the army under General Suharto (1921– ) took advantage of a bungled coup by leftist officers to carry out a bloody purge of the Communist Party (PKI) and depose Sukarno (1967). Despite his initial success in rebuilding the economy and restoring credit with its Western capitalist backers, Suharto's regime remained authoritarian and repressive, moving ruthlessly against domestic political opponents. His regime achieved a high growth rate in the economy, but there was growing international concern over the pace of deforestation, as well as over abuse of human rights. In 1976 Indonesia annexed the former Portuguese colony of East Timor (see Timor-Leste), causing thousands of civilian deaths. The United Nations (UN) disputed the action and conflict between the independence movement and government forces in East Timor continued. In 1999 a referendum, organized by the UN, showed overwhelming support for independence. Local militias then embarked on a violent campaign to kill the leading supporters of independence and thousands of people fled. A UN peacekeeping force was sent in and found that the capital, Dili, had been almost completely destroyed. East Timor finally became independent, as Timor-Leste, in 2002. Conflict also erupted in the province of Irian Jaya, part of the island of New Guinea, where a rebellion was staged in support of unification with Papua New Guinea. New border arrangements agreed between the two countries put a stop to fighting in 1979, but conflict broke out again in 1984, causing many refugees to flee from Irian Jaya to Papua New Guinea. Accords were signed by Indonesia and Papua New Guinea over security and trade issues in 1992, but further clashes between government troops and separatist rebels occurred in 1993. Although in 1988 legislation had affirmed the dual military and socio-economic role of the Indonesian Armed Forces (ABRI) in the government of Indonesia, there was growing demand for greater democracy in the country in the early 1990s. While Suharto did appear to accept these demands, the activities of new pro-democracy organizations were met with government repression. In 1990–91 a separatist rebellion in the province of Aceh (Sumatra) was crushed by government forces. In 1993 Suharto was re-elected to serve his sixth term as President, while Try Sustrino, an ABRI candidate, was elected Vice-President. In 1994 there was a government crackdown on the press, and the arrest of pro-democracy campaigners in 1996 resulting in demonstrations and civil unrest. In 1997 the country faced an economic crisis with the collapse of the rupiah, which led to food riots and civil disorder. The International Monetary Fund provided a financial rescue package on condition that Suharto implemented policies aimed at reversing the economic collapse. He was elected for a seventh term of office in 1998 but resigned in favour of his deputy, B. J. Habibie, following mass protests and rioting. In 1999 Indonesia's first free elections for 45 years were won by the opposition Democratic Party. Abdurrahman Wahid became President later the same year, but in 2001 was impeached for corruption and succeeded by the Vice-President, Megawati Sukarnoputri. In 2002 Kuta Beach, a holiday resort on Bali popular with Westerners, suffered a bomb attack thought to be connected to al-Qaida. In 2004 Sukarnoputri was defeated in Indonesia's first direct presidential elections by Susilo Bambang Yudhoyono. At the end of that year, the Indian Ocean tsunami killed over 160,000 people in Indonesia, mainly in northern Sumatra.