Insular Southeast Asia - Dragons and Tigers: A Geography of South, East and Southeast Asia - page 471

this pleased the Dutch, who expelled or jailed many na-
tionalist leaders including Sukarno.

Pancasila

With the demise of the PKI, there arose a fear of the
power of Islam. The consensus political system has
embraced what is called Pancasila democracy . Pan-
casila is the five principles adopted by Sukarno in
1945 as the basis for Indonesian ideology and de-
velopment: belief in one God, national unity , hu-
manitarianism, democracy based on consensus and
representation, and social justice. Its vagueness al-
lows for many interpretations. All students, mem-
bers of the civil service, and the armed forces must
pass exams based on the principles of Pancasila.

THE JAPANESE AND INDEPENDENCE
The Japanese occupied Indonesia in March 1942 and
quickly alienated the Indonesians by requiring all males
to work for the war effort and treating people with dis-
dain and brutality . However, they removed the Dutch
from administrative functions and replaced them with
Japanese and Indonesians. Thousands of Dutch were
thrown into concentration camps where many perished
from torture, disease, and starvation.
Certain Japanese policies eventually served the
cause of freedom for Indonesia. The Japanese prohibited
the use of the Dutch language and encouraged the use of
Japanese and Indonesian. V arious military training pro-
grams were initiated for young people. Nationalist lead-
ers, including Sukarno, were freed from jail. As the
Japanese realized they were losing the war, they pro-
moted moves toward independence. The Republic of In-
donesia was declared on August 17, 1945, in Jakarta. The
Dutch rejected this notion and a four-year guerrilla and
diplomatic war ensued. An agreement was reached to
end Dutch colonial rule in 1949.

Despite its great mineral, timber, and agricultural
wealth, Indonesia remains a relatively poor country
with a GDP per capita of US$4,000 which ranks it
155th in the world. Eighteen percent of Indonesians
live below the official poverty line. An estimated 8 per-
cent of its workers were unemployed in 2009. Millions
are underemployed.
The mid-1997 financial crisis dealt the country a
devastating blow , with Indonesia' s currency falling in
value lower than in any other Asian country . This eco-
nomic crisis generated political turmoil that saw the fall
of General Suharto in 1998. This was followed by a pe-
riod of reformasi, “reform” that encouraged liberaliza-
tion. Elections were held in 1999 and a new and more
liberal government was put into place. Also exacerbated
by the economic turmoil were Indonesian-Chinese ten-
sions and criticisms regarding the country' s population
distribution and transmigration program. After 1997,
thousands of Chinese fled the country , taking more than
one billion dollars of investment with them. Peaceful
elections were held in 2004, with a new president—
Susilo Y udhoyono—defeating Sukarno' s daughter,
Megawati Sukarnoputri.
Indonesia has weathered the current global financial
crisis quite well because of its reliance on domestic con-
sumption as the driver of economic growth. The govern-
ment is using fiscal stimulus to counter the effects of the
crisis and delivers cash transfers to poor families. How-
ever, the country still struggles with poverty and unem-
ployment, inadequate infrastructure, corruption, a
complex regulatory environment, and unbalanced resource
distribution among regions.

AFTER THE REVOLUTION
The revolution witnessed the rise of a strong army intent
on taking the initiative in leading the country to national
unity and modernization. The army continues to play a
strong role in Indonesian politics to this day . It insists on
its dwifungsi , “dual function,” to defend the nation from
external threat and internal subversion and to promul-
gate economic development.
Despite the perceived power of the army , it did not
come into full power until after 1965. Numerous politi-
cal parties vied for control of Indonesia, and by 1960
competition was intense. Many were concerned about
the influence of the Indonesian Communist Party (PKI).
Moreover, in 1965, there were rumors that Sukarno was
terminally ill and that the PKI was preparing a coup. On
September 30, a group of army officers overthrew the
government and took power under the leadership of
General Suharto, who proclaimed a government of the
“New Order.”
Over the next six months, the army vigorously
sought out PKI members. At least 400,000 were killed,
mostly in Java and Bali. Many of the victims were Chi-
nese. The PKI was destroyed.