Background
Nationalist leader Sukarno had declared Indonesian independence in 1945 and was appointed president. Following an internal national revolution and struggle against the former Dutch colonial masters, Sukarno had managed to hold together the disparate country; however, his administration had not been able to provide a viable economic system to lift its citizens out of severe poverty. He stressed socialist policies domestically and an avidly anti-imperialist international policy, underpinned by an authoritarian style of rule dependent upon his charismatic personality. These policies led him to create alliances with the Soviet bloc, People's Republic of China, and to pioneer the creation of the Non-Aligned Movement of post-colonial states at the Bandung Conference. It also created a domestic political alliance with the Communist Party of Indonesia.
From the late 1950s, political conflict and economic deterioration worsened. By the mid-1960s, the cash-strapped government had to scrap critical public sector subsidies, estimates put annual inflation at 500-1,000%, export revenues were shrinking, infrastructure crumbling, and factories were operating at minimal capacity with negligible investment. Severe poverty and hunger were widespread, and Sukarno led his country in a military confrontation with Malaysia whilst stepping up revolutionary and anti-western rhetoric.
Described as the great dalang ("puppet master"), President Sukarno's position came to depend on balancing the opposing and increasingly hostile forces of the army and Communist Party of Indonesia (PKI). His anti-imperial ideology saw Indonesia increasingly dependent on the Soviet Union and China. By 1965 at the height of the Cold War, the PKI penetrated all levels of government extensively. With the support of Sukarno and the air force, the party gained increasing influence at the expense of the army, thus ensuring the army's enmity. By late 1965, the army was divided between a left-wing faction allied with the PKI, and a right-wing faction that was being courted by the United States.
Read more about this topic: Transition To The New Order
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