While the unified state of Indonesia is a modern creation, the area comprising the nation has a long history and has seen the rise and fall of many states: Hindu, Buddhist, and Muslim. This collection of islands served for over 2000 years as the crossroads of trade between China, Southeast Asia, India and the Arabic states of Western Asia. Chinese, Arabic and Indian traders plied the waters of this island nation, and trading ports dotted the coastal states which existed and flourished because of their excellent harbors. The most important of these coastal states were on or near the Straits of Melaka (Malacca) on the East and South coasts of Sumatra and on the North Java coast, as trade between East and West passed through these straits. In addition to these coastal trading states, a number of inland states flourished based on the rich agricultural land which comprised Central and East Java and the neighboring island of Bali. These states produced the spices, foodstuffs, sandalwood and medicines that were main items of trade.
The islands of Indonesia have long been inhabited. In the 1890s, paleontologists discovered human fossil remains on the island of Java, known as "Java Man;" some of these remains were identified as pre-homo sapiens and it is believed that homo-sapiens migrated to the islands and intermarried with these groups creating the complexity found in modern Indonesian ethnography. These early fossil remains may date as far back as 2 million years ago. Although Indonesia is ethnically diverse with over 300 distinct ethnic groups identified, most Indonesians are culturally and linguistically part of the Indo-Malaysian world, which includes present day Malaya, Brunei, the Philippines, and other nearby islands. Between 500 B.C. and 500 A.D., the peoples of these islands interacted with South and East Asia, and metal and domesticated animals were introduced.
The earliest recorded kingdoms in the Indonesian archipelago were Hindu/Buddhist states whose ideas and practices came from India via the trade routes and were adopted by local rulers, who were fascinated by the religious ideas and the accompanying rituals and civilization. These states adopted and imitated many aspects of Indian civilization, including religious and philosophical ideas, writing and literature, court ritual and political systems. They controlled and dominated the economy of central Java and the coastal regions. These Hindu/Buddhist states were prosperous agrarian states, with hierarchical and bureaucratic practices. The vast agricultural surpluses supported large courts which promoted music, dance, and literature. The two great Indian epic poems, the Mahabharata and the Ramayana, were adapted by court musicians, dancers and puppeteers and used to transmit Javanese or Balinese ethics and cultural values. Writing systems were based on Indian Sanskrit. The center of these kingdoms was the present day city of Yogyakarta, which is the center of Javanese history, philosophy and culture. Within 30 miles of Yogyakarta are Indonesia's two greatest religious monuments: the Buddhist temple of Borobudur and the Hindu temple of Prambanan. Both were constructed between the 6th and 8th centuries as centerpieces of the evolving Hindu/Buddhist kingdoms of the area. They are evidence both of the prosperity of the kingdoms which fashioned them and the high level of engineering and artistic skills of their inhabitants. Both have undergone restoration in recent years and both are designated World Heritage Sites by the United Nations. The religion pages of this site provide a link to the site of Borobudur which is repeated here:
While Muslim traders were recorded in the Indonesian archipelago beginning in the 7th century, the process of converting the nation to Islam really got underway in the 13th century with the conversion of the ruler of Aceh, which is located at the northern tip of Sumatra. From this time on, other states gradually accepted Islam, some on their own, and others by conquest. The nature of Indonesian Islam varied greatly from state to state and these variations still exist today. Aceh was always more publicly Islamic and its members stricter adherents to the principles of the Qu'ran than most other states and today it is the hotbed of Indonesian fundamentalism. In other areas, Islam is more relaxed and still combined with many traditional pre-Islamic beliefs. The Island of Bali remains largely Hindu today.
Written records confirm that Islam in Indonesia first began on the island of Sumatra and that that area was the most heavily involved in the gradual Islamization of Indonesia. The Venetian traveler, Marco Polo, who landed in Sumatra in 1292 on his way home from China, records the existence of the Islamic state of Perlak, surrounded by non-Islamic neighbors. The Arab traveler, Ibn-Battuta visited the state of Samudra on Sumatra in 1345 and recorded that its ruler was a Sunni Muslim. By the late 14th century, inscriptions on Sumatra were written with Arabic letters rather than Sanskrit ones. During this period, Chinese traders and travelers were also frequent visitors to Indonesia and between 1405 and 1433, the great Chinese Muslim traveler, Zheng He, used Sumatra and Java as stopovers on his seven voyages to the Indian Ocean and beyond to the coast of Africa; his records provide much information about the Indonesian states.
When the Europeans arrived in Southeast Asia in the 16th century, well established states existed across the region. These early European visitors marveled at the prosperity of Southeast Asia, the health of its peoples, and the sophistication of its cultures. The major Indonesian States at the time were Aceh on the northern tip of Sumatra, as well as kingdoms on the North coast and Central Java, and on Bali, the Malukas, and Sulawesi; these states competed with each other, and there was a constant flow of goods and peoples across the archipelago. The Portuguese were the first Europeans to acquire bases in Asia and in the 16th century they established trading posts in Goa in India, Malaka in Malaysia, Ambon and Timor in Indonesia and Macau in China. The Golden Age of Portuguese exploration, the 16th and the first half of the 17th century, saw the Portuguese in a struggle with the Islamic state for control of the spice trade and for the conversion of souls: Portugal's twin aims were trade and conversion. The Portuguese seized the state of Melaka on the mainland of Malaysia and used this as a base to seize Ambon and Timor; they were involved with repeated fights with the state of Aceh and states of the Javanese North coast. The Portuguese goal of Christianizing Asia was mostly unsuccessful although a small enclave in East Timor, which survived three centuries of Dutch colonialism, remained Roman Catholic when it was absorbed into Indonesia in 1976. The Portuguese empire was short lived and by the end of the 16th century, the Dutch entered the picture determined to wrest control of Indonesia (and the rest of Asia) from Portugal.
The Dutch East India Company, formed in 1602, and the British East India Company, formed in 1600, were rivals for control of Asia but, as Protestant nations, united in their attacks on Catholic Spain and Portugal. The Dutch East India Company soon ousted Portugal from most of Indonesia, establishing their headquarters in the major town of Jayakarta, in West Java, which they renamed Batavia. Batavia remained the capital of the Netherlands East Indies until the Indonesian declaration of independence in August 1945, when it was re-named, Jakarta, becoming the capital of the newly independent Indonesia in 1949.
The Dutch East India Company slowly extended its control throughout the Indonesian islands in the 17th and 18th centuries. At first, the Dutch acted like other Indonesian kingdoms, waging war on its enemies and trading throughout the archipelago. However, by the end of the 18th century, its superior firepower, strategic goal of controlling the entire region, and broad power base enabled it to defeat the local ruling elites. By 1756, the Company controlled the whole of Java only to become bankrupt in 1796 due to corruption. The Dutch government took over its assets; after a brief interlude of British control during the Napoleonic Wars, the Dutch government resumed control and gradually extended its colony to include Sumatra and Eastern Indonesia. In 1905, the Netherlands East Indies Government took over Bali and in 1911 completed its conquest with the subjugation of Aceh. Thus, by the beginning of the twentieth century, Dutch East Indies was a centralized state, with power concentrated in Batavia. The colony served to enhance the Dutch economy through the exploitation of Indonesia's rich natural resources. The cultivation of cash crops brought considerable riches to the Dutch state but at the same time, this "Cultivation System" created a cycle of poverty and overpopulation among Java's rural population. To bolster their state, the Dutch promoted a Western educated secular elite based on the families of the pre-colonial elites; at the same time, they tried to prevent any notion of an Islamic state and quashed religious leaders who appeared to be gaining political control.
The Dutch transformed the islands of Indonesia. They disrupted the long established regional trading networks, making external trade the exclusive preserve of the Dutch and making inter-regional trade the preserve of the Chinese. Agriculture was also transformed in the 19th century. The Dutch created the "Cultivation System", by which Javanese farmers were forced to produce such crops as sugar, indigo, coffee and tea for sale to the state at fixed prices. These were then sold to European markets. This system resulted in the transformation of the subsistence economy into a market economy, the gradual impoverishment of the farmers, and their conversion from landowners to tenants.
Sumatra was also transformed with huge tobacco and rubber plantations carved out of the virgin forest; the discovery of oil in the 1920s led to the creation of the Royal Dutch Shell Oil Company. Much of the labor which opened up Sumatra was Chinese and Dutch policies encouraged Chinese immigration into the area; as a result, although Chinese immigrants were not more than 3% of the total population, they came to control local trade and urban commerce. The economic transformation led to increasing urbanization, with its resulting mass migration from rural areas and the development of large pockets of urban poverty. Western education was introduced to provide the skilled labor needed by the Dutch; admittance to these schools was limited to the upper classes and, by the end of Dutch rule, literacy in Indonesia was lower than in that of any other European colony in Asia, except East Timor.
Geographically, Indonesia was a creation of the Dutch government; the current nation includes all the territories of the old Netherlands Indies, except for East Timor. However, culturally and politically, it was the creation of the 20th century nationalists who sought cultural, linguistic, and social bases for national unity. These early nationalists were young upper class men and women who had been educated in Western high schools and at universities in the Netherlands. Beginning in 1910, this movement to create an independent and unified state of Indonesia snowballed; political parties were created, newspapers distributed, and agitation and strikes for freedom accelerated. The Dutch responded by arresting and imprisoning thousands of Communist and revolutionary Indonesians. A turning point of this independence movement was the national Youth Congress, held in 1928 in Batavia, in which thousands of young people raised the red and white flag, recited a National Pledge and sang a newly composed national song. The most important of these pre-war nationalists was Sukarno, who envisioned a new republic that would reach beyond the Dutch East Indies and encompass Malaysia and northern Borneo.
It was the Japanese occupation of Indonesia in the early 1940s that destroyed the Dutch regime and allowed these nationalists to participate in politics, administration and the military. Of course, Japan's goal was the exploitation of Indonesia's natural resources for its own war efforts; however, it tolerated Sukarno and the independence movement and aided him to announce Indonesia's independence on August 17, 1945, two days after Japan's surrender. The Dutch attempted to reassert control, resulting in a bitter war of independence, called the National Revolution, between 1945 and 1949. This resulted in the defeat of the Dutch and the creation of the Republic of the United States of Indonesia in 1950, headed by Sukarno. Sukarno enunciated 5 principles, the Pancasila, which are the guiding principles of the government. These rather vague principles are capable of many different interpretations and include: belief in one God, national unity, humanitarianism, democracy based on consensus and representation, and social justice. Sukarno's new government had to deal with ethnic, religious, and social divisions and a struggle between different groups for control of the state. Essentially, four groups emerged, each with a different vision of independent Indonesia: the parties supported either a multi-party democracy, a consensus parliamentary system, a Marxist state, or an Islamic state. In addition, the most powerful force was the army which had actually defeated the Dutch. The army was suspicious of all politicians, saw itself as the people's army and believed it could best manage the transformation of Indonesian society. Sukarno was an advocate of "democracy with leadership;" when parliamentary democracy faltered in the mid 1950s, having failed to bring prosperity to everyone, he gathered like minded forces, especially the military, and began a program of "guided democracy" which balanced the military and representation from groups such as peasants, workers, Muslim scholars, etc.
By 1965, the Indonesian economy was in chaos, inflation was rampant and much of the social infrastructure had collapsed; in addition, political instability was furthered with the rumors of Sukarno's illness and fears of a Communist coup. The result was a failed coup-d'etat on September 30 by a group of lower level army officers and a military takeover by the army under General Suharto, who put down the coup and arrested the leaders. This sparked a 6 month "witch-hunt" for members of the communist party, who were blamed for the failed coup and the accompanying murder of 6 generals. Over 400,000 people were killed and the communist party destroyed. General Suharto became President Suharto and restructured Indonesian politics, giving the military a prime role.
The government insisted that Pancasila remain the basis for Indonesian political and social organizations and saw revitalized Islam as a great threat to their control of the state along with Marxism and liberal democracy. The Islamic revival of the 1970s and 1980s, in part a reflection of events in Iran and the Arab world, has led to great diversity among Muslim thinkers, some desiring an Islamic state but the majority accepting the principles of Pancasila and working within this framework to develop political, social and economic policies which reflect their religious values. The government subjected the press and the television to controls, licensed magazine and book publishing and attempted to control the growth of political and religious parties. Economically, the new government was a great success initially, with Indonesia's move from reliance on oil to the development of export oriented manufacturing industries, such as textile, footwear and clothing. This economic growth helped fuel Indonesia's emergence as one of the "newly industrializing economies" of Asia. These economic policies also created rapid urbanization, a green revolution in the rural areas, and the rapid growth of a middle class, which is highly educated, internationally oriented and articulate. This has led to a demand for democratization and political participation.
However, Suharto used his Presidency to consolidate his power and wealth and by the mid 1990's opposition to his power and policies had coalesced around the parties of Megawati Sukarno, daughter of former President Sukarno, and Muslim leader, Amien Rais. The economy, heavily weighted towards monopolies led by cronies and family of Suharto, faltered in the mid-nineties, leading to a crisis in 1997 and 1998 as the International Monetary Fund refused to give emergency money to Indonesia after Suharto failed to restructure the economy to eliminate the monopolistic and corrupt practices as previously agreed upon. This resulted in riots, repression and the eventual overthrow of the Suharto government. Elections were held in 1999 and the surprise victor was Abdurrahman Wahid, who accepted nomination just days before the election and rallied the Islamic parties who were opposed to a woman, Megawati Sukarno, becoming president. However, Megawti became Vice President and after only 10 months in office, Wahid left the running of the government to her. In 2001, amidst cries of scandal and mismanagement, a majority of the MPs voted to remove Wahid from office and Megawati became President. The world's most populous Islamic state now had a woman as President.
For a good website on recent (since Independence) history, visit Indonesia-Pusaka: Gateway to Indonesia