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.

1. President B.J. Habibie outlined the agenda for reform during his presidency as follows:
2. rooting out corruption, collusion and nepotism, and create a clean government.
3. 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.
4. 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.
5. boosting output from the agriculture, agribusiness, export-oriented industry and tourism sectors.
6. safeguarding the implementation of the 1998/99 state budget.
7. accelerating the bank restructuring program.
8. resolving the problem of corporate foreign debts.
9. conducting a special session of the People's Consultative Assembly (MPR) in November 1998, followed by General Elections on May 1999.