Soeharto came to power in the wake of the 1965 coup attempt in which the top leadership of the Indonesian army was murdered. As the ranking army officer left alive, he gradually restored order, consolidated his position, and moved Sukarno off center stage. In March 1966 he was given authority to exercise the powers of the presidency and the following year he was elected acting president by the MPR. His rule was to last for 32 years, and he became increasingly oppressive with the passage of time.
At the outset of his administration, Soeharto set two priorities: achieving stability and promoting economic development. He brought into office a talented group of U.S.-trained economists and received political advice from various sources, including a Chinese-dominated think tank. Excellent progress was made in straightening out the economic mess inherited from Sukarno (inflation at 600 percent, per capita GDP of $70, and an unpayable foreign debt). Initially his administration was fairly open — certainly more so than that of Sukarno. But within a few years he became concerned that political party maneuvering, press criticism, and friction among various societal groups would interfere with the pace of economic growth.
Increasingly he cracked down on dissent and circled the wagons around an ever smaller group of family members and cronies, and his New Order government stifled expression and demanded uniformity in a society that is far from uniform. Ten parties had contested the 1971 parliamentary elections, the first held under Soeharto’s New Order. This included nine opposition parties left over from the Sukarno days and a new government party called Golkar (the governing party; see discussion below under The Party System). In 1973 Soeharto forced the nine opposition parties to merge into two groups. Four Islamic-based parties were fused into the United Development Party (PPP), and five secular parties were forced into PDI. Golkar remained the government party, and it produced majorities for Soeharto over the next 25 years ranging from 60 to nearly 75 percent. But in actual fact, political parties were largely irrelevant. Even Golkar was kept on a tight leash, and the other two were only symbolic with few real differences in party platforms.
Soeharto’s suppression of expression and dissent was accepted during most of the New Order in the face of impressive economic growth and improvements in living standards. But by the 1990s people were becoming disillusioned with Soeharto and tired of the state’s growing oppression. Such a role by the government may have been accepted by a largely rural, poorly educated population, but after 30 years of economic growth Indonesian society was more urban, better educated, and more sophisticated. According to the 1990 census, over 50 million people lived in urban areas. The growth of an educated professional class led to demands for more “openness,” and this became the buzzword in political discussion.
Indonesians became increasingly outspoken against concentration of power at the top and about the business activities of the Soeharto children, who, in the view of many, acted like members of an imperial family. And Soeharto himself gave evidence that he had changed–he no longer had his deft touch in dealing with real or imagined rivals. His brutal removal of Megawati as head of PDI in 1996 and granting one of his sons a monopoly in producing Indonesia’s “national car” (a car that was actually made in South Korea) turned off many more of those who had stuck with him up to that point because he produced results on the economic front. The 1997 financial crisis, which hit Indonesia harder than any other Asian country, sealed his fate, and he was forced by student agitation, popular pressure, and defections among his senior cabinet members to resign on May 21, 1998.