Only 15 years ago, Indonesia was ruled by Soeharto, whose 32-year regime began with the orchestrated massacre of up to a million actual and suspected members of the Communist Party and ended following massive street demonstrations amid economic collapse. The Soeharto regime did reduce the poverty rate and roll out near-universal primary education. But there was tight censorship, suppression of dissent and a rigid, top-down system of administration.

Since then, Indonesia’s path has been not so much ‘two steps forward, one step back’, but rather resembles a drunk staggering irresolutely home. The current president, Bambang Susilo Yudhoyono, widely known as SBY, was a serving military officer in occupied East Timor under Soeharto, but he has been a strong advocate of the army staying out of politics.

He was initially perceived as a competent manager of the economy committed to reforms, including extending access to health and education and strengthening local government and community institutions. He has strongly supported PNPM, the national poverty-reduction and community-empowerment programme, which offers microcredit to poor people and block grants to local communities for developing village infrastructure.

Despite these successes, his government has become increasingly unpopular, being widely perceived as weak, indecisive and lacking the will to implement the full range of promised reforms. This is partly a product of its devolution of power, which has involved unfortunate compromises and has undermined attempts to implement meaningful reform in, for example, environmental management, minority rights and eradicating corruption.

No-one ever thought the last of these would be easy: in 2012, 170 of Indonesia’s 550 district heads were facing criminal investigations into corruption involving sums of more than $100,000 in each case. The President’s Democratic Party has itself been racked by numerous corruption and bribery scandals, with SBY often seeming to drag his feet in cases involving party members and senior military figures.

This perceived weakness has left the electorate increasingly disillusioned with political and economic reforms, and disturbingly nostalgic for the ‘good old days’ of the Soeharto regime. With presidential elections scheduled for 2014, one of the most popular emerging candidates is General Prabowo Subianto, Soeharto’s stridently anti-Chinese former son-in-law, who has been trying, with some success, to sweep under the carpet memories of his involvement in the kidnapping, imprisonment and torture of democracy activists.

Indonesia remains a troubled country. Almost half the country’s population still lives on less than two dollars per day. In rural areas, particularly in the eastern provinces, there are high rates of malnutrition and child and maternal mortality. By contrast, the major cities have seen rampant, barely controlled private-sector development, with building glittering shopping malls and ritzy apartment blocks taking precedence over flood controls, roads, and public parks. Jakarta’s clogged canals and dysfunctional dykes mean that, in the rainy season, the city experiences serious floods and electricity blackouts that bring it to a virtual standstill for days at a time. Despite such conditions, rural migrants continue to pour into the city in search of work and better living conditions, with many living in illegal settlements on the fringes or by the canals.

Indonesia’s economic fundamentals remain strong. It has a smart, engaged middle class and its poorer citizens are becoming increasingly empowered to demand basic services. The big question is: will its progress be undermined by vested interests? The story is still being written, with the country passing through yet another ‘decade of living dangerously’.

Fact file

Leader	President Bambang Susilo Yudhoyono
Economy	GNI per capita $2,940 (Malaysia $8,770, Australia $49,130). Since 2004, the economy has expanded by more than 6% per year and Indonesia is now classified as a ‘middle-income country’. But around half the people live on under two dollars a day, with many unemployed or underemployed.
Monetary unit	Indonesian rupiah
Main exports	Gas, plywood, textiles and rubber. Indonesia is the world’s largest tin producer
People	239.9 million – the world’s fourth most populous country. Some 58% live on the island of Java. With an effective family planning programme, the rate of growth is fairly low (and declining), at 1.04%.
Health	Infant mortality rate 27 per 1,000 live births (Malaysia 5, Australia 4). Lifetime risk of maternal death 1 in 190 (Australia 1 in 7,400). The HIV prevalence rate in Papua and West Papua is around 2.4%, more than 10 times the national average and over the WHO threshold defining an epidemic. Indonesia is introducing a universal social health insurance system.
Environment	Large areas of forest are being cleared by transnational pulp and palm-oil companies, to be replaced by plantations. As a result, huge areas of Kalimantan have been hit by bush fires, causing massive smogs over the entire region. Regional autonomy has made it harder for central government to protect the environment.
Culture	Highly diverse, with hundreds of different ethnic groups in the different islands.
Religion	87% Muslim, 7% Protestant, 3% Catholic, 2% Hindu, and 1% Buddhist (2010 census). The syncretic form of Islam practised by many Javanese has Hindu and animist elements.
Language	Bahasa Indonesia (official) is spoken to some degree by almost all citizens. But there are around 500 local languages spoken throughout the archipelago.
Human Development Index	0.629 – 121st of 187 countries (Malaysia 0.769, Australia 0.938)

Country ratings in detail

Income distribution	Large and growing gaps between rural and urban areas and between the poor eastern provinces and the richer western provinces. The Gini index has risen from 0.31 in 1999 to 0.41 in 2011 (0.4 is a danger point for social instability/unrest)
Literacy	92%. Rates are lowest in the eastern provinces, although still fair.
Life expectancy	69 years (Malaysia 74, Australia 82)
Freedom	The rights to free expression, worship, and assembly are generally upheld, though vigilantes have attacked religious minorities and threatened journalists. The record is worse the further away one travels from Jakarta and is close to appalling in West Papua, where there are frequent allegations of torture of activists.
Position of women	Women earn less than men, face discrimination in law, and often marry very young, particularly in rural areas. But women traders often control their own businesses, as many girls as boys attend school and there is a strong women’s movement.
Sexual minorities	The national criminal code does not prohibit homosexuality. There is a large gay scene in Jakarta and the big cities, with numerous support/advocacy groups. But some regions have a modified sharia law that punishes homosexual acts with fines or imprisonment.
New Internationalist assessment	Indonesia has made a partially successful transition from an authoritarian dictatorship to a parliamentary democracy, with the devolution of authority for many basic services to elected district governments. National, regional and district elections are more or less free, fair and democratic. But corruption at high levels is still rife and there are some disturbing signs of regression to authoritarianism, particularly among the emerging presidential contenders for the 2014 election. Indonesians are increasingly disenchanted with the process of reform.