Indonesia. In January, the government announced its
willingness to allow East Timor to become independent.
Freedom leader Jos谷 "Xanana" Gusmão was moved from prison to
house arrest, where he could in relative freedom receive
visitors and keep in touch with the outside world (see
further East Timor).
Severe unrest occurred in several places in the wake of
I's economic crisis. In the province of Aceh in northern
Sumatra, where the military has been working hard for a
separatist movement since the 1980s, soldiers carried out
several massacres on civilians. Bloody clashes also occurred
between the army and the guerrillas. In the Moluccan
archipelago, Muslims and Christians fought each other, and
in western Borneo, new settlers were attacked by locals.
Countryaah official website, parliamentary elections were held on June 7, the first
free election of 44 years. Winners became Indonesia's
Democratic Party for Struggle (Partai Demokrasi Indonesia
Perjuangan, PDIP), which received 154 seats, while the
Golkar government party got 120 seats. Three Muslim parties
passed the two percent block by a good margin, and 14 small
parties entered the parliament through a voting system. 38
seats were reserved for military.
In October, presidential elections were held in the
People's Advisory Assembly (MPR), consisting of Parliament's
500 members and 200 nominated representatives of the
provinces and civil organizations. Before the election, MPR
rejected President Jusuf Habibie's work, after which he did
not stand for re-election. A majority supported the moderate
Muslim leader Abdurrahman Wahid as new president. He
defeated PDIP President Megawati Sukarnoputri, the daughter
of I's first President Sukarno, by 373 votes to 313. She was
elected Vice President the following day.
Wahid formed a unity government with most of the major
groups represented: Muslims, military, moderate Golan
members, reformists, human rights activists and even two
representatives of the economically influential Chinese
minority. Wahid described decentralization of power as one
of the most important tasks. Decentralization was seen as a
necessity for I's cohesion, against the backdrop of
strengthened independence requirements in Aceh, where around
300 people had been killed during the year. Wahid suggested
that Aceh could get a referendum on independence, but under
pressure from government colleagues and the army, he later
said that a referendum could only apply to the introduction
of Islamic law.
I's economy recovered slowly after falling more than 13%
in 1998. GDP was expected to remain unchanged in order to
grow by a few percent in 2000.
The International Monetary Fund halted the payment of a $
4.6 billion loan after it was discovered that multimillion
amounts were transferred from Bank Bali to the Golkar circle
before the election. The loan negotiations were resumed
after the new government investigated the deal and confirmed
that at least $ 2.2 million went directly to Golkar's party
As one of its last measures, the outgoing government
closed the investigation into former President Suharto's
suspected misappropriation of state funds. However, the new
government said the investigation would resume.
On October 31, a 24-year occupation of East Timor was
terminated, when Indonesia officially resigned the area to UN