Western evaluations of the prospects for economic development in Indonesia seem to have come full circle in the past twenty years. The initially positive appraisals of the immediate post-independence period, based on the extensiveness of untapped resources, the apparent commitment of Indonesian leaders to development within a framework of parliamentary institutions and “rational” planning, and the euphoric Zeitgeist produced by newly-won independence, were undermined first by the parliamentary instability of the mid-1950s and then by the continuing political instability and presumed economic irrationality of the Sukarno years. Deepening pessimism, having reached its nadir in 1963–65 when cracks in the Guided Democracy structure were most visible and the Indonesian Communist Party seemed to be moving inexorably toward full control of the polity, was gradually reversed after 1966, as the new army-backed regime of President Suharto began to consolidate itself and to declare its commitment to a Western-assisted process of economic development.

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