Sophisticated kingdoms existed before the arrival of the Dutch, who consolidated their hold over two centuries, eventually uniting the archipelago in around 1900.

After Japan’s wartime occupation ended, independence was proclaimed in 1945 by Sukarno, the independence movement’s leader. The Dutch transferred sovereignty in 1949 after an armed struggle. Long-term leader General Suharto came to power in the wake of an abortive coup in 1965. He imposed authoritarian rule while allowing technocracts to run the economy with considerable success.

But his policy of allowing army involvement in all levels of government, down to village level, fostered corruption. His “transmigration” programmes – which moved large numbers of landless farmers from Java to other parts of the country – fanned ethnic conflict.

Suharto fell from power after riots in 1998 and escaped efforts to bring him to justice for decades of dictatorship. Post-Suharto Indonesia has made the transition to democracy. Power has been devolved away from the central government and the first direct presidential elections were held in 2004.

But the country faces demands for independence in several provinces, where secessionists have been encouraged by East Timor’s 1999 success in breaking away after a traumatic 25 years of occupation. Militant Islamic groups have flexed their muscles over the past few years. Some have been accused of having links with Osama Bin Laden’s al-Qaeda organisation, including the group blamed for the 2002 Bali bombings which killed 202 people.

Lying near the intersection of shifting tectonic plates, Indonesia is prone to earthquakes and volcanic eruptions. A powerful undersea quake in late 2004 sent massive waves crashing into coastal areas of Sumatra, and into coastal communities across south and east Asia. The disaster left more than 220,000 Indonesians dead or missing.

President: Susilo Bambang Yudhoyono

Former army general Susilo Bambang Yudhoyono won Indonesia’s first-ever direct presidential elections in September 2004, unseating the incumbent Megawati Sukarnoputri. The election was hailed as the first peaceful transition of power in Indonesia’s history.

Mr Yudhoyono, a former security minister in the Megawati government, promised to fight corruption, rejuvenate the economy and tackle separatist conflicts. On the campaign trail he sought to present himself as a man of integrity and as an effective leader in times of crisis. He said the 2004 Asian tsunami disaster had precipitated the most difficult period in Indonesia’s history.

The president identifies the fight against terrorism as a key challenge. As security minister he spearheaded operations to capture Islamic extremists blamed for the 2002 Bali nightclub bombings. His administration won international plaudits for signing a peace deal in 2005 with separatist rebels in Aceh province but on the economic front he has struggled to better the lot of many Indonesians.

Some observers say he has failed to tackle corruption within the country’s massive bureaucracy.

Mr Yudhoyono, a fluent English speaker, studied for his master’s degree in the US. Rising through the ranks under former President Suharto, he led his country’s peacekeeping contingent in Bosnia in the 1990s. Sometimes called ‘SBY’, after his initials, Mr Yudhoyono is praised by his supporters for balancing strength and compassion. Critics have said he is over-cautious. [BBC]

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