Suharto Suharto ( ; 8 June 1921 – 27 January 2008 ) was the second President of Indonesia , having held the office for 31 years from 1967 following Sukarno ' s removal until his resignation in 1998 . Suharto was born in a small village , Kemusuk , in the Godean area near Yogyakarta , during the Dutch colonial era . He grew up in humble circumstances . His Javanese Muslim parents divorced not long after his birth , and he was passed between foster parents for much of his childhood . During the Japanese occupation of Indonesia , Suharto served in Japanese - organised Indonesian security forces . Indonesia ' s independence struggle saw him joining the newly formed Indonesian army . Suharto rose to the rank of Major General following Indonesian independence . An attempted coup on 30 September 1965 was countered by Suharto - led troops and was blamed on the Indonesian Communist Party . The army subsequently led an anti - communist purge , and Suharto wrested power from Indonesia ' s founding president , Sukarno . He was appointed acting president in 1967 and President the following year . Support for Suharto ' s presidency was strong throughout the 1970s and 1980s but eroded following a severe financial crisis that led to widespread unrest and his resignation in May 1998 . Suharto died in 2008 . The legacy of Suharto ' s 31 - year rule is debated both in Indonesia and abroad . Under his " New Order " administration , Suharto constructed a strong , centralised and military - dominated government . An ability to maintain stability over a sprawling and diverse Indonesia and an avowedly anti - Communist stance won him the economic and diplomatic support of the West during the Cold War . For most of his presidency , Indonesia experienced significant economic growth and industrialisation , dramatically improving health , education and living standards . Indonesia ' s invasion and occupation of East Timor during Suharto ' s presidency resulted in at least 100 , 000 deaths . By the 1990s , the New Order ' s authoritarianism and widespread corruption were a source of discontent . In the years after his presidency , attempts to try him on charges of corruption and genocide failed because of his poor health and because of lack of support within Indonesia . Early life . Suharto was born on 8 June 1921 during the Dutch East Indies era , in a plaited bamboo walled house in the hamlet of Kemusuk , a part of the larger village of Godean . The village is west of Yogyakarta , the cultural heartland of the Javanese . Born to ethnic Javanese parents of peasant class , he was the only child of his father ' s second marriage . His father , Kertosudiro , had two children from his previous marriage , and was a village irrigation official . His mother , Sukirah , a local woman , was distantly related to Sultan Hamengkubuwono V by his first concubine . Five weeks after Suharto ' s birth , his mother suffered a nervous breakdown and he was placed in the care of his paternal great - aunt , Kromodirjo . Kertosudiro and Sukirah divorced early in Suharto ' s life and both later remarried . At the age of three , Suharto was returned to his mother who had remarried a local farmer whom Suharto helped in the rice paddies . In 1929 , Suharto ' s father took him to live with his sister who was married to an agricultural supervisor , Prawirowihardjo , in the town of Wuryantoro in a poor and low - yield farming area near Wonogiri . Over the following two years , he was taken back to his mother in Kemusuk by his stepfather and then back again to Wuryantoro by his father . Prawirowihardjo took to raising the boy as his own , which provided Suharto a father - figure and a stable home in Wuryantoro . In 1931 , he moved to town of Wonogiri to attend the primary school ( " schakelschool " ) , living first with Prawirohardjo ' s son Sulardi , and later with his father ' s relative Hardjowijono . While living with Hardjowijono , Suharto became acquinted with Darjatmo , a " dukun " ( " guru " ) of Javanese mystical arts and faith healing . The experience deeply affected him and later , as president , Suharto surrounded himself with powerful symbolic language . Difficulties in paying the fees for his education in Wonogiri resulted in another move back with his father in Kemusuk , where he continued studying at a lower - fee Muhammadiyah middle school in the city of Yogyakarta until 1939 . Like many Javanese , Suharto had only one name . In religious contexts in recent years he has sometimes been called " Haji " or " el - Haj Mohammed Suharto " but these names were not part of his formal name or generally used . The spelling " Suharto " reflects modern Indonesian spelling although the general approach in Indonesia is to rely on the spelling preferred by the person concerned . At the time of his birth , the standard transcription was " Soeharto " and he preferred the original spelling . The international English - language press generally uses the spelling ' Suharto ' while the Indonesian government and media use ' Soeharto ' . Suharto ' s upbringing contrasts with that of leading Indonesian nationalists such as Sukarno in that he is believed to have had little interest in anti - colonialism , or political concerns beyond his immediate surroundings . Unlike Sukarno and his circle , Suharto had little to no contact with European colonizers . Consequently , he did not learn to speak Dutch or other European languages in his youth . He learned to speak Dutch after his induction into the Dutch military in 1940 . Military career . World War II and Japanese occupation . Suharto finished middle school at the age of 18 and took a clerical job at a bank in Wuryantaro . He was forced to resign after a bicycle mishap tore his only working clothes . Following a spell of unemployment , he joined the Royal Netherlands East Indies Army ( KNIL ) in June 1940 , and undertook basic training in Gombong near Yogyakarta . With the Netherlands under German occupation and the Japanese pressing for access to Indonesian oil supplies , the Dutch had opened up the KNIL to large intakes of previously excluded Javanese . Suharto was assigned to Battalion XIII at Rampal , graduated from short training at KNIL " Kaderschool " in Gombong to become sergeant , and was posted to KNIL reserve battalion in Cisarua . Following the Dutch surrender to the invading Japanese forces in March 1942 , Suharto abandoned his KNIL uniform and went back to Wurjantoro . After months of unemployment , he then became one of thousands of Indonesians who took the opportunity to join Japanese - organised security forces by joining the Yogyakarta police force . In October 1943 , Suharto was transferred from the police force to the newly formed Japanese - sponsored militia , the PETA ( Defenders of the Fatherland ) in which Indonesians served as officers . In his training to serve at the rank of " shodancho " ( platoon commander ) he encountered a localised version of the Japanese " bushido " , or " way of the warrior " , used to indoctrinate troops . This training encouraged an anti - Dutch and pro - nationalist thought , although toward the aims of the Imperial Japanese militarists . The encounter with a nationalistic and militarist ideology is believed to have profoundly influenced Suharto ' s own way of thinking . Suharto was posted at a PETA coastal defence battalion at Wates , south of Yogyakarta , until he was admitted for training for company commander ( " chudancho " ) in Bogor from April to August 1944 . As company commander , he conducted training for new PETA recruits in Surakarta , Jakarta , and Madiun . The Japanese surrender and Proclamation of Indonesian Independence in August 1945 occurred when Suharto was posted at remote Brebeg area ( on the slopes of Mount Wilis ) to train new NCOs to replace those executed by the Japanese in the aftermath of failed PETA rebellion of February 1945 in Blitar , led by Supriyadi . Indonesian National Revolution . Two days after the Japanese surrender in the Pacific , independence leaders Sukarno and Hatta declared Indonesian independence , and were appointed President and Vice - President respectively of the new Republic . Suharto disbanded his regiment in accordance with orders from the Japanese command and returned to Yogyakarta . As republican groups rose to assert Indonesian independence , Suharto joined a new unit of the newly formed Indonesian army . On the basis of his PETA experience , he was appointed deputy commander , and subsequently a battalion commander when the republican forces were formally organised in October 1945 . Suharto was involved in fighting against Allied troops around Magelang and Semarang , and was subsequently appointed head of a brigade as lieutenant - colonel , having earned respect as a field commander . In the early years of the War , he organised local armed forces into Battalion X of Regiment I ; Suharto was promoted to the rank of Major and became Battalion X ' s leader . The arrival of the Allies , under a mandate to return the situation to the " status quo ante bellum " , quickly led to clashes between Indonesian republicans and Allied forces , namely returning Dutch and assisting British forces . Suharto led his Division X troops to halt an advance by the Dutch T ( " Tiger " ) Brigade on 17 May 1946 . It earned him the respect of Lieutenant Colonel Sunarto Kusumodirjo , who invited him to draft the working guidelines for the Battle Leadership Headquarters ( MPP ) , a body created to organise and unify the command structure of the Indonesian Nationalist forces . The military forces of the still infant Republic of Indonesia were constantly restructuring . By August 1946 , Suharto was head of the 22nd Regiment of Division III ( the " Diponegoro Division " ) stationed in Yogyakarta . In late 1946 , the Diponegoro Division assumed responsibility for defence of the west and southwest of Yogyakarta from Dutch forces . Conditions at the time are reported in Dutch sources as miserable ; Suharto himself is reported as assisting smuggling syndicates in the transport of opium through the territory he controlled , to make income . On September 1948 , Suharto was dispatched to meet Musso , chairman of Indonesian Communist Party ( PKI ) in an unsuccessful attempt for peaceful reconciliation of the communist uprising in Madiun . In December 1948 , the Dutch launched " Operation Crow " , which resulted in the capture of Sukarno and Hatta and the capital Yogyakarta . Suharto was appointed to lead the " Wehrkreise III " , consisting of two battalions , which waged guerilla warfare against the Dutch from the hills south of Yogyakarta . In dawn raids on 1 March 1949 , Suharto ' s forces and local militia re - captured the city , holding it until noon . Suharto ' s later accounts had him as the lone plotter , although other sources say Sultan Hamengkubuwono IX of Yogyakarta , and the Panglima of the Third Division ordered the attack . However , General Nasution said that Suharto took great care in preparing the " General Offensive " ( Indonesian " Serangan Umum " ) . Civilians sympathetic to the Republican cause within the city had been galvanised by the show of force which proved that the Dutch had failed to win the guerrilla war . Internationally , the United Nations Security Council pressured the Dutch to cease the military offensive and to re - commence negotiations which eventually led to the Dutch withdrawal from Yogyakarta area on June 1949 and complete transfer of sovereignty on December 1949 . Suharto was responsible for the take - over of Yogyakarta city from withdrawing Dutch on June 1949 . During the Revolution , Suharto married Siti Hartinah ( known as Madam Tien ) , the daughter of a minor noble in the Mangkunegaran royal house of Solo . The arranged marriage was enduring and supportive , lasting until Tien ' s death in 1996 . The couple had six children : Siti Hardiyanti Rukmana ( Tutut , born 1949 ) , Sigit Harjojudanto ( born 1951 ) , Bambang Trihatmodjo ( born 1953 ) , Siti Hediati ( Titiek , born 1959 ) , Hutomo Mandala Putra ( Tommy , born 1962 ) , and Siti Hutami Endang Adiningish ( Mamiek , born 1964 ) . Within the Javanese upper class , it was considered acceptable if the wife pursued genteel commerce to supplement the family budget , allowing her husband to keep his dignity in his official role . The commercial dealings of Tien , her children and grandchildren became extensive and ultimately undermined Suharto ' s presidency . Post - Independence military career . In the years following Indonesian independence , Suharto served in the Indonesian National Army , primarily in Java . In 1950 , as a Colonel , he led the Garuda Brigade in suppressing Makassar Uprising , a rebellion of former colonial soldiers who supported the Dutch - established State of East Indonesia and its federal entity the United States of Indonesia . During his year in Makassar , Suharto became acquainted with his neighbours the Habibie family , whose eldest son BJ Habibie would later become Suharto ' s vice - president and went on to succeed him as President . In 1951 to 1952 , Suharto led his troops in defeating the Islamic - inspired rebellion of Battalion 426 in Klaten area of Central Java . Appointed to lead four battalions in early 1953 , he organised their participation in battling Darul Islam insurgents in northwestern Central Java and anti - bandit operations in Mount Merapi area . He also sought to stem leftist sympathies amongst his troops . His experience in this period left Suharto with deep distaste for both Islamic and communist radicalism . Between 1956 and 1959 , he served in the important position of commander of Diponegoro Division based in Semarang , responsible for Central Java and Yogyakarta provinces . His relationship with prominent businessmen Liem Sioe Liong and Bob Hasan , which extend throughout his presidency , began in Central Java where he was involved in series of " profit generating " enterprises conducted primarily to keep the poorly funded military unit functioning . Army anti - corruption investigations implicated Suharto in a 1959 smuggling scandal . Relieved of his position , he was transferred to the army ' s Staff and Command School ( " Seskoad " ) in the city of Bandung . While in Bandung , he was promoted to brigadier - general , and in late 1960 , promoted to army deputy chief - of - staff . In 1961 , he was given an additional command , as head of the army ' s new Strategic Reserve ( later KOSTRAD ) , a ready - reaction air - mobile force based in Jakarta . In January 1962 , Suharto was promoted to the rank of major general and appointed to lead Operation Mandala , a joint army - navy - air force command based in Makassar . This formed the military side of the campaign to win western New Guinea , from the Dutch who were preparing it for its own independence , separate from Indonesia . In 1965 , Suharto was assigned operational command of Sukarno ' s " Konfrontasi " , against the newly formed Malaysia . Fearful that " Konfrontasi " would leave Java thinly covered by the army , and hand control to the 2 - million strong Indonesian Communist Party ( PKI ) , he authorised a Kostrad intelligence officer , Ali Murtopo , to open secret contacts with the British and Malaysians . Overthrow of Sukarno ( 1965 ) . Background . Tensions between the military and communists increased in April 1965 , when Sukarno endorsed the immediate implementation of the PKI ’ s proposal for a " fifth armed force " consisting of armed peasants and workers . However , this idea was rejected by the army ’ s leadership as being tantamount to the PKI establishing its own armed forces . In May , the " Gilchrist Document " aroused Sukarno ' s fear of a military plot to overthrow him , a fear which he mentioned repeatedly during the next few months . On his independence day speech in August , Sukarno declared his intention to commit Indonesia to an anti - imperialist alliance with China and other communist regimes , and warned the Army not to interfere . While Sukarno devoted his energy for domestic and international politics , the economy of Indonesia deteriorated rapidly with worsening widespread poverty and hunger , while foreign debt obligations became unmanageable and infrastructure crumbled . Sukarno ' s Guided Democracy stood on fragile grounds due to the inherent conflict between its two underlying support pillars , the military and the communists . The military , nationalists , and the Islamic groups were shocked by the rapid growth of the communist party under Sukarno ' s protection . They feared immenent establishment of communist state in Indonesia . By 1965 , the PKI had 3 million members , and were particularly strong in Central Java and Bali . PKI has become the strongest political party in Indonesia . Abortive coup and anti - communist purge . Before dawn on 1 October 1965 , six army generals were kidnapped and executed in Jakarta by soldiers from the Presidential Guard , Diponegoro Division , and Brawidjaja Division . Soldiers occupied Merdeka Square including the areas in front of the Presidential Palace , the national radio station , and telecommunications centre . At 7 : 10 am Untung bin Sjamsuri announced on radio that the " 30 September Movement " had forestalled a coup attempt on Sukarno by " CIA - backed power - mad generals " , and that it was " an internal army affair " . The 30 September Movement never made any attempt on Suharto ' s life . Suharto had been in Jakarta army hospital that evening with his three - year - old son Tommy who had a scalding injury . It was here that he was visited by Colonel Abdul Latief , a key member of 30 September Movement and close family friend of Suharto . According to Latief ' s later testimony , the conspirators assumed Suharto to be a Sukarno - loyalist , hence Latief went to inform him of the impending kidnapping plan to save Sukarno from treacherous generals , upon which Suharto seemed to offer his neutrality . Upon being told of the killings , Suharto went to KOSTRAD headquarters just before dawn from where he could see soldiers occupying Merdeka Square . He mobilized KOSTRAD and RPKAD ( now Kopassus ) special forces to seize control of the centre of Jakarta , capturing key strategic sites including the radio station without resistance . Suharto announced over the radio at 9 : 00 pm that six generals had been kidnapped by " counter - revolutionaries " and that the 30 September Movement actually intended to overthrow Sukarno . He said he was in control of the army , and that he would crush the 30 September Movement and safeguard Sukarno . Suharto issued an ultimatum to Halim Air Force Base , where the G30S had based themselves and where Sukarno , air force commander Omar Dhani and PKI chairman Dipa Nusantara Aidit had gathered , causing them to disperse before Suhartoist soldiers occupied the air base on 2 October after short fighting . With the failure of the poorly organised coup , and having secured authority from the president to restore order and security , Suharto ' s faction was firmly in control of the army by 2 October ( he was officially appointed army commander on 14 October ) . On 5 October , Suharto led a dramatic public ceremony to bury the generals ' bodies . Complicated and partisan theories continue to this day over the identity of the attempted coup ' s organisers and their aims . The army ' s version , and subsequently that of the " New Order " , was that the PKI was solely responsible . A propaganda campaign by the army , and Islamic and Catholic student groups , convinced both Indonesian and international audiences that it was a communist coup attempt , and that the killings were cowardly atrocities against Indonesian heroes . The army in alliance with religious civilian groups led a campaign to purge Indonesian society , government , and armed forces of the communist party and leftist organisations . The purge spread from Jakarta to much of the rest of the country . ( see : Indonesian killings of 1965 – 1966 ) . The most widely accepted estimates are that at least half a million were killed . As many as 1 . 5 million were imprisoned at one stage or another . As a result of the purge , one of Sukarno ' s three pillars of support , the Indonesian Communist Party , was effectively eliminated by the other two , the military and political Islam . Power struggle . Sukarno continued to command loyalty from large sections of the armed forces as well as the general population , and Suharto was careful not to be seen to be seizing power in his own coup . For eighteen months following the quashing of the 30 September Movement , there was a complicated process of political manoeuvres against Sukarno , including student agitation , stacking of parliament , media propaganda and military threats . In January 1966 , university students under the banner of KAMI , begin demonstrations against the Sukarno government voicing demands for the disbandment of PKI and control of hyperinflation . The students received support and protection with the army , with Suharto often engaging in coordination meetings with student leaders . Street fights broke out between the students and pro - Sukarno loyalists with the pro - Suharto students prevailing due to army protection . In February 1966 , Sukarno promoted Suharto to lieutenant - general ( and to full general in July 1966 ) . The killing of a student demonstrator and Sukarno ' s order for the disbandment of KAMI in February 1966 further galvanised public opinion against the president . On 11 March 1966 , the appearance of unidentified troops around Merdeka Palace during a cabinet meeting ( which Suharto had not attended ) forced Sukarno to flee to Bogor Palace ( 60 km away ) by helicopter . Three Suhartoist generals , Major - General Basuki Rahmat , Brigadier - General M Jusuf , and Brigadier - General Amirmachmud went to Bogor to meet Sukarno . There , they secured a presidential decree ( see " Supersemar " ) that gave Suharto authority to take any action necessary to maintain security . Using the " Supersemar " letter , Suharto ordered the banning of PKI the following day , and proceeded to purge pro - Sukarno elements from the parliament , the government and military , accusing them of being communist sympathisers . The army arrested 15 cabinet ministers and forced Sukarno to appoint a new cabinet consisting of Suharto supporters . The army arrested pro - Sukarno and pro - communist members of the MPRS ( parliament ) , and Suharto replaced chiefs of the navy , air force , and the police force with his supporters , who then began an extensive purge within each services . In June 1966 , the now - purged parliament passed 24 resolutions including the banning of Marxism - Leninism , ratifying the Supersemar , and stripping Sukarno of his title of President for Life . Against the wishes of Sukarno , the government ended Konfrontasi with Malaysia and rejoined the United Nations ( Sukarno had removed Indonesia from the UN in the previous year ) . Suharto did not seek Sukarno ' s outright removal at this MPRS session due to the remaining support for the president amongst elements of the armed forces . By January 1967 , Suharto felt confident that he has removed all significant support for Sukarno within the armed forces , and the MPRS decided to hold another session to impeach Sukarno . On 22 February 1967 , Sukarno announced he would resign from the presidency , and on 12 March , the MPRS session stripped him of his remaining power and named Suharto acting president . Sukarno was placed under house arrest in Bogor Palace ; little more was heard from him , and he died in June 1970 . On 27 March 1968 , the MPRS appointed Suharto for the first of his five - year terms as President . The " New Order " ( 1967 – 1998 ) . Ideology . Suharto promoted his " New Order " , as opposed to Sukarno ' s " Old Order " , as a society based on the Pancasila ideology . After initially being careful not to offend sensitivities of Islamic scholars who feared Pancasila might develop into a quasi - religious cult , Suharto secured a parliamentary resolution in 1983 which obliged all organisations in Indonesia to adhere to Pancasila as basic principle . He also instituted mandatory Pancasila training programs for all Indonesians , from primary school students to office workers . In practice , however , the vagueness of Pancasila was exploited by Suharto ' s government to justify their actions and to condemn their opponents as " anti - Pancasila " . The New Order also implemented the " Dwifungsi " ( " Dual Function " ) policy enabled the military to have an active role in all levels of Indonesian government , economy , and society . Consolidation of power . Having been appointed president , Suharto still needed to share power with various elements including Indonesian generals who considered Suharto as mere " primus inter pares " and Islamic and student groups who participated in the anti - communist purge . Suharto , aided by his " Office of Personal Assistants " ( " Aspri " ) clique of military officers from his days as commander of Diponegoro Division , particularly Ali Murtopo , began to systematically cement his hold on power by subtly sidelining potential rivals while rewarding loyalists with political position and monetary incentives . Having successfully stood - down MPRS chairman General Nasution ' s 1968 attempt to introduce bill which will severely curtail presidential authority , Suharto had him removed from his position as MPRS chairman in 1969 and forced his early retirement from the military in 1972 . In 1967 , generals Hartono Rekso Dharsono , Kemal Idris , and Sarwo Edhie Wibowo ( dubbed " New Order Radicals " ) opposed Suharto ' s decision to allow participation of existing political parties in elections in favour of a non - ideological two - party system similar to those found in many Western countries . Suharto then proceeded to send Dharsono overseas as ambassador , while Kemal Idris and Sarwo Edhie Wibowo were sent to distant North Sumatera and South Sulawesi as regional commanders . Suharto ' s previously strong relationship with the student movement soured over the increasing authoritarianism and corruption of his regime . While many original leaders of the 1966 student movement ( " Angkatan ' 66 " ) was successfully co - opted into the regime , Suharto was faced with large student demonstrations challenging the legitimacy of 1971 elections ( " " Golput " " movement ) , the costly construction of Taman Mini Indonesia Indah theme park ( 1972 ) , the domination of foreign capitalists ( Malari Incident of 1974 ) , and lack of term limits of Suharto ' s presidency ( 1978 ) . The regime responded by imprisoning many student activists ( such as future national figures Dorodjatun Kuntjoro - Jakti , Adnan Buyung Nasution , Hariman Siregar , and Sjahrir ) and even sending army units to occupy university campus of ITB ( Bandung Institute of Technology ) from January – March 1978 . In April 1978 , Suharto moved decisively by issuing decree on " Normalization of Campus Life " ( NKK ) which prohibited political activities on - campus not related to academic pursuits . On 15 – 16 January 1974 , Suharto faced a significant challenge when violent riots broke - out in Jakarta during visit of Japanese prime minister Kakuei Tanaka . Students demonstrating against increasing dominance of Japanese investors was encouraged by General Sumitro , deputy commander of armed forces . Sumitro was an ambitious general who disliked the strong influence of Suharto ' s Aspri inner circle . It was reported to Suharto that the riots were engineered by Sumitro who wished to destabilize the regime utilizing the student unrest , resulting in Sumitro ' s dismissal and forced retirement . This incident is referred as Malari Incident ( " Malapetaka Lima Belas Januari " / Disaster of 15 January ) . However , Suharto also disbanded Aspri to appease popular dissent . In 1980 , fifty prominent figures political figures signed the Petition of Fifty which criticised Suharto ' s use of Pancasila to silence his critics . Suharto refused to address the petitioners ' concerns , and some of them were imprisoned with others having restrictions imposed on their movements . Domestic politics and security . To placate demands from civilian politicians for the holding of elections , as manifested in MPRS resolutions of 1966 and 1967 , Suharto government formulated a series of laws regarding elections as well as the structure and duties of parliament which were passed by MPRS in November 1969 after protracted negotiations . The law provided for a parliament ( " Madjelis Permusjawaratan Rakjat " / MPR ) with the power to elect presidents , consisting of a lower house ( " Dewan Perwakilan Rakjat " / DPR ) and regional representatives . 100 of the 460 members of DPR will be directly appointed by the government , while the remaining seats were allocated to political parties based on results of general election . This mechanism ensures significant government control over legislative affairs , particularly the appointment of presidents . To participate in the elections , Suharto realized the need to align himself with a political party . After initially considering alignment with Sukarno ' s old party the PNI , in 1969 Suharto decided to take - over control of an obscure military - run federation of NGOs called Golkar ( " Functional Group " ) and transform it into his electoral vehicle under the coordination of his right - hand man Ali Murtopo . The first general election was held on 3 July 1971 with ten participants ; consisting of Golkar , four Islamic parties , as well as five nationalist and Christian parties . Campaigning on a non - ideological platform of " development " , and aided by official government support and subtle intimidation tactics , Golkar managed to secure 62 . 8 % of the popular vote . The March 1973 general session of newly elected MPR promptly appointed Suharto to second - term in office with Sultan Hamengkubuwono IX as vice - president . On 5 January 1973 , to allow better control , the government forced the four Islamic parties to merge into PPP ( " Partai Persatuan Pembangunan " / United Development Party ) while the five non - Islamic parties were fused into PDI ( " Partai Demokrasi Indonesia " / Indonesian Democratic Party ) . The government ensured that these parties never developed effective opposition by controlling their leadership , while establishing the " re - call " system to remove any outspoken legislators from their positions . Using this system dubbed the " Pancasila Democracy " , Suharto was re - elected unopposed by the MPR in 1978 , 1983 , 1988 , 1993 , and 1998 . Golkar won landslide majorities in the MPR at every election , ensuring that Suharto would be able to pass his agenda with virtually no opposition . For all intents and purposes , he held all governing power in the nation . Suharto proceeded with various social engineering projects designed to transform Indonesian society into a de - politicized " floating mass " supportive of the national mission of " development " , a concept similar to corporatism . The government formed various civil society groups to unite the populace in support of government programs . For instance , the government created Korpri ( " Korps Pegawai Republik Indonesia " ) in November 1971 as union of civil servants to ensure their loyalty , organized the FBSI ( " Federasi Buruh Seluruh Indonesia " ) as the only legal labour union in February 1973 , and established the MUI in 1975 to control Islamic clerics . In 1966 to 1967 , to promote assimiliation of the influential Chinese - Indonesians , the Suharto government passed several laws as part of so - called " Basic Policy for the Solution of Chinese Problem " , whereby only one Chinese - language publication ( controlled by the army ) was allowed to continue , all Chinese cultural and religious expressions ( including display of Chinese characters ) were prohibited from public space , Chinese schools were phased - out , and the ethnic - Chinese were encouraged to take - up Indonesian - sounding names . In 1968 , Suharto commenced the very successful family - planning program ( " Keluarga Berentjana / KB " ) to stem the huge population growth rate and hence increasing per - capita income . A lasting legacy from this period is the spelling reform of Indonesian language decreed by Suharto on 17 August 1972 . Suharto relied on the military to ruthlessly maintain domestic security , organized by the Kopkamtib ( Operation Command for the Restoration of Security and Order ) and BAKIN ( State Intelligence Coordination Agency ) . To maintain strict control over the country , Suharto expanded the army ' s territorial system down to village - level , while military officers were appointed as regional heads under the rubric of the " Dwifungsi " ( " Dual Function " ) of the military . By 1969 , 70 % of Indonesia ' s provincial governors and more than half of its district chiefs were active military officers . Suharto authorized " Operasi Trisula " which destroyed PKI - remnants trying to organize a guerilla base in Blitar area in 1968 , and ordered several military operations which ended the communist PGRS - Paraku insurgency in West Kalimantan ( 1967 – 1972 ) . Attacks on oil workers by the first incarnation of Free Aceh Movement separatists under Hasan di Tiro in 1977 led to dispatch of small special forces detachments who quickly either killed or forced the movement ' s members to flee abroad . Notably , in March 1981 , Suharto authorised a successful special forces mission to end hijacking of a Garuda Indonesia flight by Islamic extremists at Don Muang Airport in Bangkok . To comply with New York Agreement of 1962 which required a plebiscite on integration of West Irian into Indonesia before end of 1969 , the Suharto government begin organizing for a so - called " Act of Free Choice " scheduled for July – August 1969 . The government sent RPKAD special forces under Sarwo Edhie Wibowo which secured the surrender of several bands of former Dutch - organized militia ( " Papoea Vrijwilligers Korps / PVK " ) at large in the jungles since the Indonesian takeover in 1963 , while sending Catholic volunteers under Jusuf Wanandi to distribute consumer goods to promote pro - Indonesian sentiments . In March 1969 , it was agreed that the plebiscite will be channeled via 1 , 025 tribal chiefs , citing the logistical challenge and political ignorance of the population . Using the above strategy , the plebiscite produced a unanimous decision for integration with Indonesia , which was duly noted by United Nations General Assembly in November 1969 . Economy . To stabilize the economy and to ensure long - term support for the New Order , Suharto ’ s administration enlisted a group of mostly American - educated Indonesian economists , dubbed the " Berkeley Mafia " , to formulate significant changes in economic policy . By cutting subsidies , decreasing government debt , and reforming the exchange rate mechanism , inflation was lowered from 660 % in 1966 to 19 % in 1969 . The threat of famine was alleviated by influx of USAID rice aid shipments in 1967 to 1968 . With a lack of domestic capital that was required for economic growth , the New Order reversed Sukarno ' s economic self - sufficiency policies and opened selected economic sectors of the country to foreign investment though the 1967 Foreign Investment Law . Suharto travelled to Western Europe and Japan to promote investment in Indonesia . The first foreign investors to re - enter Indonesia included mining companies Freeport Sulphur Company and International Nickel Company . Following government regulatory frameworks , domestic entrepreneurs ( mostly Chinese - Indonesians ) emerged in the late 1960s and early 1970s in the import - substitution light - manufacturing sector such as Astra Group and Salim Group . From 1967 , the government secured low - interest foreign aid from ten countries grouped under the Inter - Governmental Group on Indonesia ( IGGI ) to cover its budget deficit . With the IGGI funds and the later the jump in oil export revenue from the 1973 oil crisis , the government invested in infrastructure under a series of five - year plans , dubbed REPELITA ( " Rencana Pembangunan Lima Tahun " ) I to VI from 1969 to 1998 . Outside the formal economy , Suharto created a network of charitable organizations ( " " yayasan " " ) run by the military and his family members , which extracted " donations " from domestic and foreign enterprises in exchange for necessary government support and permits . While some proceeds were used for charitable purposes , much of the money was re - cycled as slush fund to reward political allies and to maintain support for the New Order . In 1975 , the state - owned oil company , Pertamina , defaulted on its foreign loans as a result of mismanagement and corruption under the leadership of Suharto ’ s close ally , Ibnu Sutowo . The government bail - out of the company nearly doubled the national debt . Foreign policy . Upon assuming power , Suharto government adopted policy of neutrality in the Cold War with quiet alignment with the Western bloc ( including Japan and South Korea ) with the objective of securing support for Indonesia ' s economic recovery . Western countries , impressed by Suharto ' s strong anti - communist credentials , were quick to offer their support . Diplomatic relations with China was suspended in October 1967 due to suspicion of Chinese involvement in 30 September Movement ( diplomatic relations was only restored in 1990 ) . Due to Suharto ' s destruction of PKI , Soviet Union embargoed military sales to Indonesia . However , from 1967 to 1970 foreign minister Adam Malik managed to secure several agreements to restructure massive debts incurred by Sukarno from Soviet Union and other Eastern European communist states . Regionally , having ended confrontation with Malaysia in August 1966 , Indonesia became a founding member of Association of Southeast Asian Nations ( ASEAN ) in August 1967 . This organization is designed to establish peaceful relationship between Southeast Asian countries free from conflicts such as ongoing Vietnam War . In 1974 , the neighbouring colony of Portuguese Timor descended into civil war after the withdrawal of Portuguese authority following the Carnation Revolution , whereby the Catholic populist Fretilin ( " Frente Revolucionária de Timor - Leste Independente " ) emerged triumphant . With approval from Western countries ( including from US president Gerald Ford and Australian prime minister Gough Whitlam during their visits to Indonesia ) , Suharto decided to intervene claiming to prevent establishment of a communist state . But Fretilin , as a Catholic group , was already anti - Communist . After an unsuccessful attempt of covert support to Timorese groups UDT and APODETI , Suharto authorized full - scale invasion of the colony on 7 December 1975 followed with its official annexation as Indonesia ' s 27th province of East Timor in July 1976 . The " encirclement and annihilation " campaigns of 1977 – 1979 broke the back of Fretilin control over the hinterlands , although continuing guerilla resistance caused the government to maintain strong military force in the half - island until 1999 . An estimated minimum of 90 , 800 and maximum of 213 , 600 conflict - related deaths occurred in East Timor during Indonesian rule ( 1974 – 1999 ) ; namely , 17 , 600 – 19 , 600 killings and 73 , 200 to 194 , 000 ' excess ' deaths from hunger and illness , although Indonesian forces were responsible for about 70 % of the violent killings . Socio - economic progress and growing corruption . Real socio - economic progress sustained support for Suharto ' s regime across three decades . By 1996 , Indonesia ' s poverty rate has dropped to around 11 % compared with 45 % in 1970 . From 1966 to 1997 , Indonesia recorded real GDP growth of 5 . 03 % pa , pushing real GDP per capita upwards from US $ 806 to US $ 4 , 114 . In 1966 , manufacturing sector made - up less than 10 % of GDP ( mostly industries related to oil and agriculture ) . By 1997 , manufacturing had risen to 25 % of GDP whereby 53 % of exports consisted of manufactured products . The government invested into massive infrastructure development ( notably the launching of series of Palapa telecommunication satellites ) , consequently Indonesian infrastructure in mid - 1990s was considered at par with China . Suharto was keen to capitalize on such achievements to justify his regime , and an MPR resolution in 1983 granted him the title of " Father of Development " . Suharto government ' s health - care programs ( such as the " Puskesmas " program ) increased life expectancy from 47 years ( 1966 ) to 67 years ( 1997 ) while cutting infant mortality rate by more than 60 % . The government ' s " Inpres " program launched in 1973 resulted in primary school enrollment ratio reaching 90 % by 1983 while almost eliminating education gap between boys and girls . Sustained support for agriculture resulted in Indonesia reaching rice self - sufficiency by 1984 , an unprecedented achievement which earns Suharto a gold medal from FAO in November 1985 . In early 1980s , Suharto government responded to fall in oil exports due to the 1980s oil glut by successfully shifting pillar of the economy into export - oriented labour intensive manufacturing , made globally competitive by Indonesia ' s low wages and a series of currency devaluations . Industrialization was mostly undertaken by ethnic - Chinese companies which evolved into immense conglomerates dominating the nation ' s economy . The largest conglomeracies are the Salim Group led by Liem Sioe Liong ( Sudono Salim ) , Sinar Mas Group led by Oei Ek Tjong ( Eka Tjipta Widjaja ) , Astra Group led by Tjia Han Poen ( William Soeryadjaya ) , Lippo Group led by Lie Mo Tie ( Mochtar Riady ) , Barito Pacific Group led by Pang Djun Phen ( Prajogo Pangestu ) , and Nusamba Group led by Bob Hasan . Suharto decided to support the growth of small number of Chinese - Indonesian conglomerates since they cannot pose political challenge due to their ethnic - minority status , but from his past experience he deemed them to possess the skills and capital needed to create real growth for the country . In exchange for Suharto ' s patronage , the conglomerates provided vital financing for his " regime maintenance " activities . In late 1980s , Suharto government decided to de - regulate the banking sector to encourage savings and providing domestic source of financing required for growth . Suharto decreed the " October Package of 1988 " ( " PAKTO 88 " ) which eased requirements for establishing banks and extending credit ; resulting in a 50 % increase in number of banks from 1989 – 1991 . To promote savings , the government introduced the " TABANAS " program to the populace . Jakarta Stock Exchange , re - opened in 1977 , recorded bull - run due to spree of domestic IPO s and influx of foreign funds after deregulation in 1990 . The sudden availability of credit fueled strong economic growth in the early 1990s , but the weak regulatory environment of the financial sector sowed the seeds of the catastrophic crisis in 1997 which eventually destroyed Suharto ' s regime . The growth of the economy is coincided by rapid expansion in corruption , collusion , and nepotism ( " Korupsi , Kolusi , dan Nepotisme / KKN " ) . In the early 1980s , Suharto ' s children , particularly Siti Hardiyanti Rukmana ( " Tutut " ) , Hutomo Mandala Putra ( " Tommy " ) , and Bambang Trihatmodjo , had grown into greedy adults . Their companies were given lucrative government contracts and protected from market competition by monopolies . Examples include the toll - expressway market which was monopolized by Tutut , national car project monopolized by Bambang and Tommy , and even the cinema market monopolized by 21 Cineplex owned by Suharto ' s cousin Sudwikatmono . The family is said to control about 36 , 000 km² of real estate in Indonesia , including 100 , 000 m² of prime office space in Jakarta and nearly 40 % of the land in East Timor . Additionally , Suharto ' s family members received free shares in 1 , 251 of Indonesia ' s most lucrative domestic companies ( mostly run by Suharto ' s ethnic - Chinese cronies ) , while foreign - owned companies were encouraged to establish " strategic partnerships " with Suharto family ' s companies . Meanwhile , the myriad of " yayasan " s run by Suharto family grew even larger , levying millions of dollars in " donations " from the public and private sectors each year . The New Order in the 1980s and 1990s . By the 1980s , Suharto ' s grip on power was maintained by the emasculation of civil society , engineered elections , and use of the military ' s coercive powers . Upon his retirement from the military in June 1976 , Suharto undertook a re - organisation of the armed forces that concentrated power away from commanders to the president . In March 1983 , he appointed General Leonardus Benjamin Moerdani as head of the armed forces who adopted a hardline on elements who challenged the administration . As a Roman Catholic , he was not a political threat to Suharto . From 1983 to 1985 , army squads killed up to 10 , 000 suspected criminals in response to a spike in the crime rate ( see " Petrus Killings " ) . Suharto ' s imposition of Pancasila as the sole ideology caused protests from conservative Islamic groups who considered Islamic law to be above all other conceptions . The Tanjung Priok massacre saw the army kill up to 100 conservative Muslim protesters in September 1984 . A retaliatory series of small bombings , including the bombing of Borobudur , led to arrests of hundreds of conservative Islamic activists , including future parliamentary leader AM Fatwa and Abu Bakar Bashir ( later leader of Jemaah Islamiyah ) . Attacks on police by a resurgent Free Aceh Movement in 1989 led to a military operation which killed 2 , 000 people and ended the insurgency by 1992 . In 1984 , the Suharto government sought increased control over the press by issuing a law requiring all media to possess a press operating license ( " SIUPP " ) which could be revoked at any time by Ministry of Information . Western concern over communism waned with end of Cold War , and Suharto ' s human rights record came under greater international scrutiny , particularly following the 1991 Santa Cruz Massacre in East Timor . Suharto was elected as head of the Non - Aligned Movement in 1992 , while Indonesia became a founding member of APEC in 1989 and host to the Bogor APEC Summit in 1994 . Domestically , the business dealings of Suharto ' s family created discontent amongst the military who lost access to power and lucrative rent - seeking opportunities . The March 1988 MPR session , military legislators attempted to pressure Suharto by unsuccessfully seeking to block the nomination of Sudharmono , a Suharto - loyalist , as vice - president . Moerdani ’ s criticism of the Suharto family ' s corruption saw the President dismiss him from the position of military chief . Suharto proceeded to slowly " de - militarize " his regime ; he dissolved the powerful Kopkamtib on September 1988 and ensured key military positions were held by loyalists . In an attempt to diversify his power base away from the military , Suharto begin courting support from Islamic elements . He undertook a much - publicised hajj pilgrimage in 1991 , took up the name of Haji Mohammad Suharto , and promoted Islamic values and the careers of Islamic - oriented generals . To win support from the nascent Muslim business community who resented dominance of Chinese - Indonesian conglomerates , Suharto formed the ICMI ( Indonesian Islamic Intellectuals ' Association ) in November 1990 , which was led by his protégé BJ Habibie , the Minister for Research and Technology since 1978 . During this period , race riots against ethnic - Chinese begin to occur quite regularly , beginning with April 1994 riot in Medan . By the 1990s , Suharto ' s government came to be dominated by civilian politicians such as Habibie , Harmoko , Ginandjar Kartasasmita , and Akbar Tanjung , who owed their position solely to Suharto . As sign of Habibie ' s growing clout , when several prominent Indonesian magazines criticised Habibie ' s purchase of almost the entire fleet of the disbanded East German Navy in 1993 ( most of the vessels were of scrap - value ) , Suharto ordered the offending publications be closed down on 21 June 1994 . In the 1990s , elements within the growing Indonesian middle class created by Suharto ' s economic development , were becoming restless with his autocracy and corruption of his children , fueling demands for " Reformasi " ( reform ) of the almost 30 - year - old New Order government . By 1996 , Megawati Sukarnoputri , the daughter of Sukarno and chairwoman of the normally compliant PDI , was becoming a rallying point for this growing discontent . In response , Suharto backed a co - opted faction of PDI led by Suryadi , which removed Megawati from the chair . On 27 July 1996 , an attack by soldiers and hired thugs led by Lieutenant - General Sutiyoso on demonstrating Megawati supporters in Jakarta resulted in fatal riots and looting . This incident was followed by the arrest of 200 democracy activists , 23 of whom were kidnapped , and some killed , by army squads led by Suharto ' s son - in - law , Major - General Prabowo Subianto . Economic crisis and resignation . Indonesia was the country hardest hit by the Asian financial crisis of 1997 – 98 . From mid - 1997 there were large capital outflows and against the US dollar , the Indonesian Rupiah dropped from a pre - crisis level of Rp . 2 , 600 to a low point in early 1998 of around Rp . 17 , 000 . Many companies were bankrupted and the economy shrank by 13 . 7 % leading to sharp increases in unemployment and poverty across the country . In exchange for US $ 43 billion in liquidity aid , between October 1997 and the following April , Suharto signed three letters of intent with the International Monetary Fund ( IMF ) for an economic reform process . In December 1997 , Suharto for the first time did not attend an ASEAN presidents ' summit , which was later revealed to be due to a minor stroke , creating speculation about his health and the immediate future of his presidency . In mid - December , as the crisis swept through Indonesia and an estimated $ 150 billion of capital was being withdrawn from the country , he appeared at a press conference to re - assert his authority and to urge people to trust the government and the collapsing Rupiah . However , his attempts to re - instill confidence had little effect . Evidence suggested that his family and associates were being spared the toughest requirements of the IMF reform process , further undermining confidence in the economy and his leadership . The economic meltdown was accompanied by increasing political tension . Anti - Chinese riots occurred in Situbondo ( 1996 ) , Tasikmalaya ( 1996 ) , Banjarmasin ( 1997 ) , and Makassar ( 1997 ) ; while violent ethnic clashes broke - out between the Dayak and Madurese settlers in Central Kalimantan in 1997 . Golkar won the rigged 1997 MPR elections and in March 1998 , Suharto was voted unanimously to another five - year term . He appointed his protégé BJ Habibie as vice - president while stacking the cabinet with his own family and business associates ( his daughter Tutut became Minister of Social Affairs ) . The appointments and the government ' s unreaslistic 1998 budget created further currency instability , and rumours and panic led to a run on stores and pushed up prices . The Government ' s May 1998 increase in fuel prices by 70 % triggered riots in Medan . With Suharto increasingly seen as the source of the country ' s mounting economic and political crises , prominent political figures , including Muslim politician Amien Rais , spoke out against his presidency , and in January 1998 university students began organising nation - wide demonstrations . The crisis climaxed in May 1998 when security forces killed four demonstrators from Jakarta ' s Trisakti University . Rioting and looting across Jakarta and other cities over the following days destroyed thousands of buildings and killed over 1 , 000 people . Ethnic Chinese and their businesses were particular targets in the violence . Theories on the origin of the violence include rivalry between military chief General Wiranto and Prabowo , and the suggestion of deliberate provocation by Suharto to divert blame for the crisis to the ethnic - Chinese and discredit the student movement . On 16 May , tens of thousands of university students demanding Suharto ’ s resignation , occupied the grounds and roof of the parliament building . Upon Suharto ' s return to Jakarta , he offered to resign in 2003 and to reshuffle his cabinet . These efforts failed when his political allies deserted him by refusing to join the proposed new cabinet . According to Wiranto , on 18 May , Suharto issued a decree which provided authority to him to take any measures to restore security ; however , Wiranto decided not to enforce the decree to prevent conflict with the population . On 21 May , Suharto announced his resignation , upon which vice - president Habibie assumed the presidency in accordance with the constitution . Post - presidency . After resigning from the presidency , Suharto reclused himself in his family compound in the Menteng area of Jakarta , protected by soldiers and rarely making public appearances . Suharto ' s family spend much of their time fending - off corruption investigations . However , Suharto himself was protected from serious prosecution by politicians who owed their positions to the former president , as indicated in the leaked telephone conversation between President Habibie and attorney - general Andi Muhammad Ghalib in February 1999 . In May 1999 , " Time Asia " estimated Suharto ' s family fortune at US $ 15 billion in cash , shares , corporate assets , real estate , jewelry and fine art . Suharto sued magazine seeking more than $ US 27 billion in damages for libel over the article . On 10 September 2007 , Indonesia ' s Supreme Court awarded Suharto damages against " Time Asia " magazine , ordering it to pay him one trillion rupiah ( $ 128 . 59 million ) . The High Court reversed the judgment of an appellate court and Central Jakarta district court ( made in 2000 and 2001 ) . Suharto was placed highest on Transparency International ' s list of corrupt leaders with an alleged misappropriation of between US $ 15 – 35 billion during his 32 - year presidency . On 29 May 2000 , Suharto was placed under house arrest when Indonesian authorities began to investigate the corruption during his presidency . In July 2000 , it was announced that he was to be accused of embezzling US $ 571 million of government donations to one of a number of foundations under his control and then using the money to finance family investments . But in September court - appointed doctors announced that he could not stand trial because of his declining health . State prosecutors tried again in 2002 but then doctors cited an unspecified brain disease . On 26 March 2008 , a civil court judge acquitted Suharto of corruption but ordered his charitable foundation , Supersemar , to pay US $ 110 m ( £55 m ) . In 2002 , Suharto ' s son Tommy , was sentenced to 15 years ' jail . He had been convicted of ordering the killing of a judge who had sentenced him to 18 months jail for corruption and illegal weapons possession . In 2006 , he was freed on " conditional release . " In 2003 , Suharto ' s half - brother Probosutedjo was tried and convicted for corruption and the loss of $ 10 million from the Indonesian state . He was sentenced to four years in jail . He later won a reduction of his sentence to two years , initiating a probe by the Indonesian Corruption Eradication Commission into the alleged scandal of the " judicial mafia " which uncovered offers of $ 600 , 000 to various judges . Probosutedjo confessed to the scheme in October 2005 , leading to the arrest of his lawyers . His full four - year term was reinstated . After a brief standoff at a hospital , in which he was reportedly protected by a group of police officers , he was arrested on 30 November 2005 . On 9 July 2007 , Indonesian prosecutors filed a civil lawsuit against former President Suharto , to recover state funds ( $ 440 m or £219 m , which allegedly disappeared from a scholarship fund , and a further $ 1 . 1 billion in damages ) . Health crises . After resigning from the presidency , Suharto was hospitalised repeatedly for stroke , heart , and intestinal problems . His declining health hindered attempts to prosecute him as his lawyers successfully claimed that his condition rendered him unfit for trial . Moreover , there was little support within Indonesia for any attempts to prosecute him . In 2006 , Attorney General Abdurrahman announced that a team of twenty doctors would be asked to evaluate Suharto ' s health and fitness for trial . One physician , Brigadier - General Dr Marjo Subiandono , stated his doubts about by noting that " [ Suharto ] has two permanent cerebral defects . " In a later Financial Times report , Attorney General Abdurrahman discussed the re - examination , and called it part of a " last opportunity " to prosecute Suharto criminally . Attorney General Abdurrahman left open the possibility of filing suit against the Suharto estate . " Death . On 4 January 2008 , Suharto was taken to the Pertamina hospital , Jakarta with complications arising from a weak heart , swelling of limbs and stomach , and partial renal failure . His health fluctuated for several weeks but progressively worsened with anaemia and low blood pressure due to heart and kidney complications , internal bleeding , fluid on his lungs , and blood in his feces and urine which caused a haemoglobin drop . On 23 January , Suharto ' s health worsened further , as a sepsis infection spread through his body . His family consented to the removal of life support machines , and he died on 27 January at 1 : 10 pm Suharto ' s body was taken from Jakarta to the Giri Bangun mausoleum complex near the Central Java city of Solo . He was buried alongside his late wife in a state military funeral with full honours , with the Kopassus elite forces and KOSTRAD commandos as the honour guard and pallbearers and Commander of Group II Kopassus Surakarta Lt . Colonel Asep Subarkah . In attendance were the incumbent president , Susilo Bambang Yudhoyono as " Ceremony Inspector " , and vice - president , government ministers , and armed forces chiefs of staff . Tens of thousands of people lined the streets to see the convoy . Condolences were offered by many regional heads of state , and Indonesia ' s President Susilo Bambang Yudhoyono declared a week of official mourning . During this tenure , all flags of Indonesia were flown at half - mast .