Indonesia

Indonesia is an archipelago in Southeast Asia consisting of 17,000 islands (6,000 inhabited) and straddling the equator. The largest islands are Sumatra, Java (the most populous), Bali, Kalimantan (Indonesia's part of Borneo), Sulawesi (Celebes), the Nusa Tenggara islands, the Moluccas Islands, and Irian Jaya (also called West Papua), the western part of New Guinea. Its neighbor to the north is Malaysia and to the east is Papua New Guinea.

Indonesia, part of the ?ring of fire,? has the largest number of active volcanoes in the world. Earthquakes are frequent. Wallace's line, a zoological demarcation between Asian and Australian flora and fauna, divides Indonesia.Government

The 17,000 islands that make up Indonesia were home to a diversity of cultures and indigenous beliefs when the islands came under the influence of Hindu priests and traders in the first and second centuries A.D. Muslim invasions began in the 13th century, and most of the archipelago had converted to Islam by the 15th century. Portuguese traders arrived early in the next century but were ousted by the Dutch around 1595. The Dutch United East India Company established posts on the island of Java, in an effort to control the spice trade.

After Napolon subjugated the Netherlands in 1811, the British seized the islands but returned them to the Dutch in 1816. In 1922, Indonesia was made an integral part of the Dutch kingdom. During World War II, Japan seized the islands. Tokyo was primarily interested in Indonesia's oil, which was vital to the war effort, and tolerated fledgling nationalists such as Sukarno and Mohammed Hatta. After Japan's surrender, Sukarno and Hatta proclaimed Indonesian independence on Aug. 17, 1945. Allied troops, mostly British Indian forces, fought nationalist militias to reassert the prewar status quo until the arrival of Dutch troops. Dutch Recognize Indonesia's Independence

In Nov. 1946, a draft agreement on forming a Netherlands-Indonesian Union was reached, but differences in interpretation resulted in more fighting between Dutch and nationalist forces. Following a bitter war for independence, leaders on both sides agreed to terms of a union on Nov. 2, 1949. The transfer of sovereignty took place in Amsterdam on Dec. 27, 1949. In Feb. 1956, Indonesia abrogated the union and began seizing Dutch property in the islands.

In 1963, Netherlands New Guinea (the Dutch portion of the island of New Guinea) was transferred to Indonesia and renamed West Irian, which became Irian Jaya in 1973 and West Papua in 2000. Hatta and Sukarno, the cofathers of Indonesian independence, split over Sukarno's concept of ?guided democracy,? and under Sukarno's rule the Indonesian Communist Party (PKI) steadily increased its influence.

Sukarno was named president for life in 1966. He enjoyed mass support for his policies, but a growing power struggle between the military and the PKI loomed over his government. After an attempted military coup was put down by army chief of staff, General Suharto, and officers loyal to him, Suharto's forces killed hundreds of thousands of suspected Communists in a massive purge aimed at undermining Sukarno's rule. Suharto Assumes Control and Brings a Measure of Stability

Suharto took over the reins of government and gradually eased Sukarno out of office, completing his consolidation of power in 1967. Under Suharto the military assumed an overarching role in national affairs, and relations with the West were enhanced. Indonesia's economy improved dramatically and national elections were permitted, although the opposition was so tightly controlled as to virtually choke off dissent.Indonesia Annexes East Timor

In 1975, Indonesia invaded the former Portuguese half of the island of Timor; it seized the territory in 1976. A separatist movement developed at once. Unlike the rest of Indonesia, which had been a Dutch colony, East Timor was governed by the Portuguese for 400 years, and while 90% of Indonesians are Muslim, the East Timorese are primarily Catholic. More than 200,000 Timorese are reported to have died from famine, disease, and fighting since the annexation. In 1996, two East Timorese resistance activists, Bishop Carlos Filipe Ximenes Belo and Jos Ramos-Horta, received the Nobel Peace Prize.

In the summer of 1997, Indonesia suffered a major economic setback, along with most other Asian economies. Banks failed and the value of Indonesia's currency, the rupiah, plummeted. Antigovernment demonstrations and riots broke out, directed mainly at the country's prosperous ethnic Chinese. As the economic crisis deepened, student demonstrators occupied the national parliament, demanding Suharto's ouster. On May 21, 1998, Suharto stepped down, ending 32 years of rule, and handed over power to Vice President B. J. Habibie.

June 7, 1999, marked Indonesia's first free parliamentary election since 1955. The ruling Golkar Party took a backseat to the Indonesian Democratic Party-Struggle (PDI-P), led by Megawati Sukarnoputri, the daughter of Sukarno, Indonesia's first president.East Timor Gains Independence

The ethnic, religious, and political tensions kept in check during Suharto's 32 years of authoritarian rule erupted in the months following his downfall. Rioting and violence shook the provinces of Aceh, Ambon (in the Moluccas), Borneo, and Irian Jaya. But nowhere was the violence more brutal and unjust than in East Timor. Habibie unexpectedly ended 25 years of Indonesian intransigence by announcing in Feb. 1999 that he was willing to hold a referendum on East Timorese independence. Twice rescheduled because of violence, a UN-organized referendum took place on Aug. 30, 1999, with 78.5% of the population voting to secede from Indonesia. In the days following the election, pro-Indonesian militias and Indonesian soldiers massacred civilians and forced a third of the population out of the region. After enormous international pressure, the government, which was either unwilling or unable to stop the violent rampage, finally agreed to allow UN forces into East Timor on Sept. 12, 1999. East Timor achieved independence on May 20, 2002.Unrest Plagues Wahid's Tenure as President

On Oct. 20, 1999, in a surprising upset, the Indonesian parliament elected Abdurrahman Wahid as the new president of Indonesia, defeating Megawati Sukarnoputri, the popular leader of the Indonesian Democratic Party-Struggle. Wahid was a Sufi cleric as well as an adept politician with a reputation for honesty and moderation.

Rioting, bombing, and growing unrest continued to plague Indonesia in 2000. On June 4, 2000, separatists declared Irian Jaya (also called West Papua) an independent state. Wahid flatly opposed independence for the province, which contains sizable copper and gold mines. Unlike East Timor, there is little international support for an independent Irian Jaya.

In fall 2000, Suharto failed twice to show up in court to face corruption charges of embezzling $570 million in state funds, but his lawyers insisted he was too ill to stand trial. In July 2007, prosecutors filed a civil suit against Suharto, seeking $440 million that he had embezzled and $1.1 billion in damages.

In the fall of 2000 and winter of 2001, President Wahid came under increasing criticism for corruption and incompetence. He was blamed for not stopping ethnic clashes and killings in Aceh, Irian Jaya, the Moluccas Islands, and especially in Borneo, where the Dayak people turned against Madurese immigrants, slaughtering hundreds. Wahid was forced from power in July 2001, and Vice President Megawati Sukarnoputri assumed the helm.Terrorists Attack Bali Nightclub

A terrorist bombing on Oct. 12, 2002, at a nightclub in Bali killed more than 200 people, mostly tourists. In 2003, Amrozi bin Nurhasyim and Imam Samudra, members of Jemaah Islamiyah, an Islamic terrorist group linked to al-Qaeda, were sentenced to death for their roles in the bombing. But the radical Muslim cleric Abu Bakar Bashir, believed to be the head of Jemaah Islamiyah, was only given a light three-year sentence on lesser charges, causing some in the international community to question Indonesia's commitment to fighting terrorism. Authorities arrested Bashir in April 2004?on the same day he was set to be released from prison?claiming they had new evidence that proved he is in fact the leader of Jemaah Islamiyah and that he approved the Bali bombing. In March 2005, he was found not guilty of terrorism charges in the bombings of Jakarta's Marriott Hotel in 2003 and the Bali nightclub. He was, however, convicted of a lesser charge?criminal conspiracy. That charge was overturned in Dec. 2006.