During 1957–1959, Suharto commanded the Diponegoro Division in Central Java. In 1962 he went on to command the Mandala Campaign during the liberation of West Irian from the Dutch. By 1965, the army was split into two factions, the leftists, who were loyal to President Sukarno, and the rightists, who included Suharto. On 1 October 1965, Sukarno's guards murdered six right-wing generals during an alleged coup attempt by communist civilians. This galvanized the rightists, who purged the Sukarno faction from the army and began to take steps to oust the president. In the meantime, Suharto had begun to set his sights on seizing control of the government himself.
In keeping with Javanese propriety, Suharto moved cautiously in deposing Sukarno, first obtaining the Supersemar (Letter of Authority) transferring power to him on 11 March 1966 and then installing himself as provisional president one year later. On 21 March 1967, he arranged for his election as president by the People's Consultative Assembly. As Suharto consolidated his power, some half million suspected communists were killed, and Indonesia's Chinese minority was subjected to severe repression. Once his rule had been "legitimized" by the obviously rigged election, Suharto consolidated his power by manipulating the political system. He was reelected five consecutive times (1973, 1978, 1983, 1988, and 1993). Although he would provide unparalleled political stability and economic growth, the costs were steep.
Under Suharto's so-called New Order, parliament was purged of communists, labor organizations were liquidated, and freedom of the press was all but curtailed. Suharto strictly limited the number of political parties, and his Golkar Party established de facto one-party rule.
Suharto revamped Sukarno's state-oriented economic policies with the help of American-trained economists at the University of Indonesia. Suharto encouraged exports and foreign investments, received economic aid from the World Bank and the International Monetary Fund (IMF), stabilized the currency, and kept a tight lid on inflation. By the end of the 1960s, the economy was flourishing, and generally high growth rates were maintained until the 1997 Asian financial crisis, which decimated the Indonesian economic landscape.
Suharto's anticommunism was reflected in Indonesia's initially troubled relations with the Soviet Union and his severing of relations with the People's Republic of China (PRC). At the same time, he restored relations with Malaysia and encouraged regional cooperation that manifested itself in the formation of the Association of Southeast Asian Nations (ASEAN) in August 1967. During the 1970s, he turned increasingly to the West—especially the United States—for military and economic aid.
In 1975 Suharto ordered the invasion of East Timor, and in July 1976 Indonesia formally annexed that former Portuguese colony. In establishing control, Indonesian forces killed perhaps one-third of East Timor's population. As time went on, Suharto's human rights abuses became ever more appalling, and in 1997, during the Asian financial crisis, the World Bank accused Suharto of having embezzled as much as 30 percent of Indonesia's development funds over the years. The financial crisis ultimately brought Suharto down, as the economy spiraled downward and antigovernment protests increased. On 21 March 1998, he was forced from office. A year later, when his economic malfeasance became widely known, he was placed under house arrest. Some estimate that when he left office, he had enriched his family to the tune of $15 billion through embezzlement and a variety of state-run monopolies over which he exercised de facto control.
Paul G. Pierpaoli Jr.
Vatikiotis, Michael R. J. Indonesian Politics under Suharto. London: Routledge, 1993.