Indonesia's Crisis: Implications for the Region

What began as a currency crisis in Indonesia in the third quarter of 1997 rapidly turned into a deep financial crisis with wide-ranging economic and social impacts, and finally became a serious political crisis that exploded in May 1998, forcing President Soeharto to resign. Soeharto's departure, however, did not resolve the crisis. He left behind an economy in shambles, a serious political vacuum and a highly polarised society. The issues to be dealt with are wide-ranging, including the loss of Indonesia's position in the international system, the domination of industry by foreign capital and the imposition by the IMF of a certain model of economic development. Regional and international aspects of the crisis have not become an issue in the public debate and policy discourse in Indonesia. This article looks at these implications.