Guided Democracy in Indonesia - Acronyms and Economic Chaos

Acronyms and Economic Chaos

In his Independence Day address on 17 August 1957, Sukarno laid down the ideology of guided democracy, later renamed Manipol (Political manifesto). This was later expanded into the ideology known as USDEK — standing for the 1945 Constitution, Indonesian socialism, guided democracy, guided economy and Indonesian nationalism.

On 25 August 1959, the government implemented sweeping anti-inflationary measures, devaluing the currency by 75 percent and declaring that all Rp500 and Rp1000 notes would henceforth be worth one tenth of their face value. Meanwhile, anti-ethnic Chinese measures, including repatriations and forced transfer to cities, damaged economic confidence further. However, by 1960, inflation had reached 100 percent per annum.

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