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Social Fragmentation in Indonesia: A Crisis from Suharto's New Order

Abstract The Asian financial crisis in 1997 led to a crisis of legitimacy, causing President Suharto to resign on 21 May 1998. This resulted in widespread social fragmentation, which has taken the form of massive social unrest, riots, ethnic conflicts, separatist movements, as well as crime and interpersonal violence. Although the fragmentation was catalyzed by the financial crisis, it is actually more deeply rooted in the institutional dysfunctionality brought about by Suharto's “New Order.” The institutionalization of corruption by Suharto was of the magnitude of state capture. It is the root cause of Indonesia's prolonged chaos, as compared to other countries in Southeast Asia which have begun to recover from the financial crisis of 1997.