Quick questions on The Asian Financial Crisis and Fall of Suharto May 1998: HSC Modern History

The crisis began outside Indonesia. Thailand floated the baht on 2 July 1997 after defending it had exhausted foreign reserves. Speculative attacks spread along the region's pegged currencies. Indonesia widened the rupiah trading band on 11 July 1997 and abandoned the peg entirely on 14 August 1997.

Indonesia signed an IMF Letter of Intent on 31 October 1997 securing a $43 billion package (with World Bank and bilateral additions). The Camdessus programme demanded subsidy reductions, banking reform, and the dismantling of the family monopolies, including the clove monopoly (BPPC, run by Tommy Suharto) and the Timor national car project (also Tommy's).

GDP contracted by 13.1 per cent in 1998 (the largest annual fall in any peacetime modern economy). Poverty headcount more than doubled from around 11 per cent in 1996 to around 23 per cent at the trough. Inflation reached around 78 per cent in 1998. Around six million Indonesians lost jobs.

University students had organised since early 1998. From March onwards, campus rallies at the University of Indonesia (UI), Gadjah Mada (UGM), and Trisakti University demanded reformasi: free elections, end of dwifungsi, prosecution of Suharto family corruption (KKN, "Korupsi Kolusi Nepotisme").

Jakarta and other cities erupted on 13 and 14 May 1998. Shopping malls were attacked and looted. Around 1,000 people died, the great majority killed when malls (notably Yogya Plaza in Klender) were locked and burned. The Tim Gabungan Pencari Fakta (TGPF, Joint Fact-Finding Team) reported in October 1998 that the riots had been organised in significant part, with Kopassus Team Mawar units (associated with Lieutenant General Prabowo Subianto, Suharto's son-in-law) implicated in coordinating violence.

The army split. General Wiranto, Armed Forces Commander, sided with Vice-President Habibie. Lieutenant General Prabowo Subianto, Kostrad commander and Suharto's son-in-law, was sidelined; he was reassigned on 22 May 1998 to the staff college and discharged from active duty in August 1998 over Kopassus kidnappings.

On 21 May 1998 at 9 a.m. in the State Palace, Suharto announced his resignation. Vice-President Habibie was sworn in by Chief Justice Sarwata on national television within minutes. Suharto returned to his private home on Jalan Cendana.

Adam Schwarz (A Nation in Waiting, 1999 2nd edn) is the standard contemporary Western account, with extensive interviews with regime insiders.

Students were necessary but not sufficient. Elite defection (cabinet, army, Harmoko) was decisive.

12 May 1998. The riots followed on 13 to 14 May.

Wiranto was Armed Forces Commander, sided with Habibie. Prabowo was Kostrad commander, Suharto's son-in-law, and was sidelined.

Habibie's 27 January 1999 offer of a referendum, which became possible only because of the New Order's collapse, is part of the same political opening.