This chapter will provide an overview of national-level political developments from the chaotic conditions that accompanied the fall of President Soeharto to the attainment of a degree of normality under President Susilo Bambang Yudhoyono. Reform was launched after President Habibie had suddenly been catapulted into the presidency by the events of May 1998. Habibie had no reputation as a reformer but he quickly understood that the crisis demanded drastic reforms. His successors, Abdurrahman Wahid and Megawati Soekarnoputri, had been part of the growing moderate opposition to Soeharto but neither was able to form strong coherent governments committed to continuing reform. The “crisis-ridden” reforms forced on Habibie lost momentum after the worst of the crisis had passed. Facing fragmented legislatures — the DPR and MPR — formed after the free 1999 elections, Abdurrahman and Megawati were more concerned with maintaining legislative support than embarking on radical reform. Nevertheless, although Abdurrahman's failure to maintain that support eventually led to his dismissal, significant political reforms were adopted by the DPR and the constitution was overhauled by the MPR during Megawati's tenure. By the time Yudhoyono won the presidency in 2004, the authoritarian political structures of the New Order had been transformed into institutions that met international standards of formal democracy. But, while legislative institutions had been able to reform themselves, major obstacles stood in the way of further reform of the military and the judiciary. Although dubbed the Reformasi era, the achievements of the post-Soeharto governments were quite mixed.

THE NEW ORDER AND THE FALL OF SOEHARTO

When President Soeharto was forced from power in May 1998, he had ruled over one of the world's most durable authoritarian regimes for more than three decades. Backed by the military, Soeharto's New Order combined repression with co-optation to prevent the rise of organized political challenges. Blessed by an abundance of natural resources, particularly oil, the Indonesian economy had grown steadily until 1997. By the 1990s it was no longer the “basket case” that it had been in the mid-1960s but moving towards “newly-industrializing- country” status. Indonesian society had been transformed with the emergence of an educated middle class in an increasingly urbanized, although still predominantly non-urban, population.