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Indonesia 2016 | Highlights | History

Heritage as a trading post shapes the dynamism and diversity of modern Indonesia 

The islands of Indonesia have been a hub of regional trade for more than 1,300 years, and this exchange of goods, culture and ideas has shaped the country into the vibrant market that is modern Indonesia. It was the islands’ spices that first brought traders here; now, international interest is focused on its young, well-educated people. Indonesians are both proud of their rich heritage and eager to embrace the latest ideas and technology from around the world.
Indonesia’s recent history has been volatile. World War Two brought to an end 200 years of Dutch colonial rule, with the first president, Sukarno, declaring independence and himself president in 1945. Martial law, a failed coup, years of corruption and economic crisis followed in the decades ahead, hampering growth and leading to Indonesia’s isolation within the region. When the country was battered by the Asian financial crisis of the late 1990s, popular protest erupted and forced then-president Suharto to resign after nearly 30 years at the helm. Since then, growth has been generally steady and strong.
Indonesia is now the fourth-most populous country in the world and the largest economy in Southeast Asia. It achieved GDP of US$400 billion in 2007, and managed to double that just four years later. Modern Indonesia is now largely peaceful, prosperous and, thanks to mobile and web technology – its people are among the most informed and connected in the world. 

A new path 

Legislative elections marked the beginning of a new era for a democratic Indonesia. The change in leadership also led the way for East Timor’s eventual independence, which came three years later.

President Wahid is dismissed by an increasingly restive parliament over corruption claims, with vice-president Megawati Sukarnoputri sworn in to replace him.
A change in the constitution means that from now on, Indonesians will directly elect their president. Terrorists strike the holiday island of Bali in October, killing 202 people, most of them tourists. This is the biggest in a series of attacks over the coming years both in Bali and in Jakarta.
The country’s first-ever direct elections for president deliver victory for former security minister Susilo Bambang Yudhoyono, of former president Suharto’s Golkar party. He wins a second term in 2009. A powerful underwater earthquake off the coast of Sumatra generates what has become known around the world as the Boxing Day Tsunami; Indonesia is the country worst affected by huge tidal waves, which are thought to have killed around 200,000 people and displaced many more.
The government signs a peace deal with separatists of the Free Aceh Movement, which leads to a withdrawal of government troops from Aceh by the end of the year and the disarmament of rebel soldiers. The first direct elections in Aceh follow a year later, and former rebel leader Irwandi Yusuf becomes governor of Aceh.
The net closes in on some of Indonesia’s most-wanted terrorists, with several high-profile arrests carried out and the police shooting several alleged terrorist group leaders who had been wanted in connection with the 2002 Bali bombing.
US President Barack Obama visits Jakarta, saying the world had ‘watched with hope and admiration’ Indonesia’s transition to democracy, its dynamic civil society, vibrant media and engaged citizens.
Violent protests erupt after parliament approves a major increase in the price of petrol and diesel with cuts to fuel subsidies.

Joko "Jokowi" Widodo becomes president in summer elections and is seen as one of a new breed of Indonesian politicians who is untainted by the corruption of the past. His background as a furniture maker has helped establish his image as a man of the people.
Islamic State media claim responsibility for coordinated attacks near popular shopping centre in central Jakarta. In July, the President launches a nine-month tax amnesty scheme to bring former tax evaders into the legitimate economy. The government estimates that US$76 billion is held in off-shore tax havens and it is hoped that if some of that is repatriated and declared, it can help fund infrastructure and social development.