The Reform Order Government

Since the outset of the First
Five-Year Development Plan in 1969, Indonesia under the New Order
Government of President Soeharto had endeavored to achieve its
national devel-opment goals. Indonesia, indeed, had been able to
achieve substantial progress in various fields which had been
enjoyed by the majority of the Indonesian people. Indonesia had
gained success in the national development. Unfortunately, economic
crisis, which began with the monetary crisis, struck Indonesia as of
July 1997.


Since the middle of 1997, the
people's standard of living dropped considerably. The de-cline in
the people's standard of living was aggravated by various political
tensions arising from the 1997 general elections. The political
system which had been developed since 1966 turned out to be unable
to accommodate the dynamism of the aspirations and interests of the
community. This led to riots and disturbances. To a certain extend,
they reflected the malfunctioning of the political order and of the
government, finally causing this situation to develop into a
political crisis.

The accumulation of the economic
crisis and the political crisis became a triggered factor for crisis
in confidence. This applied not just to officials and state-running
institutions, but also began to touch on the system of values and
the legal foundations that underpin the state-running institutions.

A number of student demonstrations
ensued, including the occupation of the People's Consultative
Assembly/House of People's Representatives compound. They appealed
for political and economic reform; demanded President Soeharto to
step down and stamp out corruption, collusion and nepotism.
Critical moments prevailed in the capital, Jakarta, and other towns
from 12 to 21 May 1998.

On 12 May a tragedy happened in the
Trisakti University Campus, causing the death of four students. On
18 May the leadership of the House suggested the President resign.
The President's effort to accommodate the developing aspirations of
the people by forming a re-form cabinet and a reform committee never
materialized as there was no adequate support from various circles.

Finally, on 21 May 1998, President Soeharto, after a 32-year rule of the New Order Government resigned.
Pursuant to Article 8 of the 1945 Constitution and the People's
Consultative Assembly decree no VII/1973, he handed over the
country's leadership to Vice-President Bacharuddin Jusuf Habibie.
After the announcement. Habibie took his oath of office before Chief
Justice Sarwata to become Indonesia's third President. Earlier
President Soeharto disbanded the cabinet which he formed shortly
after his reelection for a seventh five-year presidential term in
March.

A day after his installment as the
third president, Habibie formed the Reform Development Cabinet. He
picked the ministers from the various political and social forces,
including three politicians from the two minority parties, the
United Development Party (PPP) and the Indonesian Democratic Party (PDI),
to provide the needed synergy.



President B.J. Habibie outlined
the agenda for reform during his presidency as follows:

rooting out corruption, collusion
and nepotism, and create a clean government.

reviewing the five political laws
upon which the current political system is bound. They are the
laws on mass organization, the House of Representatives (DPR),
the People's Consultative Assembly (MPR), political parties,
regional administrations and elections.

implementing sweeping reform in
all sectors, including in the political, economic, and legal
fields, to enable the government to satisfy mounting demands for
a strong and clean government.

boosting output from the
agriculture, agribusiness, export-oriented industry and tourism
sectors.

safeguarding the implementation of
the 1998/99 state budget.

accelerating the bank
restructuring program.

resolving the problem of corporate
foreign debts.

conducting a special session of
the People's Consultative Assembly (MPR) in November 1998,
followed by General Elections on May 1999.

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