It is hard for a nation of 240 million, and one that is overwhelmingly Muslim and a democracy at that, to slip beneath the radar, but until recently that has been Indonesia’s fate. Like dozens of other less developed countries, it has rarely come to the world’s attention except when it suffered a coup or a particularly sensational natural disaster. In November, however, even as the nation’s perennially active Mount Merapi was dramatically erupting again, Indonesia was in the spotlight for another reason, as a visit by President Barack Obama signaled that the country he first saw as a small child has emerged from obscurity.

Obama’s decision to go to Indonesia certified a truth already recognized by informed observers. After more than a decade as an increasingly stable and genuinely free democracy, Indonesia is beginning to make its weight felt in the wider world. On Wall Street, where many have been impressed by the nation’s steady economic growth, there is talk of Indonesia adding its “I” to the BRICs, as the world’s largest emerging economies (Brazil, Russia, India, and China) are collectively known. With the human rights abuses that prevailed during the three-decade regime of President Suharto largely a thing of the past, there is a new warmth in relations with the United States. And even though China has become a major market for Indonesia’s products—especially minerals, timber, and fish—Jakarta has been rattled by China’s growing strength in Southeast Asia and its aggressive territorial claims in the South China Sea, and thus more appreciative of America’s countervailing power.

Indonesia’s upswing began in 1998, when B. J. Habibie, a protégé of Suharto since childhood, succeeded him as president. Habibie is a brilliant, German-educated engineer who rose to the top ranks of Germany’s aeronautical industry before Suharto brought him home in 1974 and eventually made him vice president. But Habibie remained an awkward technocrat with no apparent aptitude for politics, often ridiculed for promoting improbable schemes, such as his insistence at the end of the Cold War on purchasing dozens of ships of the defunct East German navy.

Yet in less than two years as president, in the midst of a financial and political meltdown triggered by the Asian financial crisis, Habibie, supported by a robust reform movement, terminated military rule, unchained the press, and ended Indonesia’s disastrous 24-year occupation of East Timor.

Most important, he inaugurated a radically decentralized democracy, transferring real power to some 470 districts and cities, instituting local elections all the way to the village level, and allocating a third of the national budget to support the new system. These were not cosmetic changes. Habibie and the reformers who supported him were convinced that a country as huge and diverse as Indonesia could not have genuine democracy without devolving real power from Jakarta. Seen in its totality, the democratic transformation Habibie authored in Indonesia, now more than a decade old, has had few rivals anywhere.

Indonesia has always been a difficult place to understand, and the surprising developments of the past dozen years have in a way made it an even more complex place. A nation strewn across thousands of islands, with dozens of major languages and innumerable ethnic groups, it is an improbable success story. 

 columnist Thomas Friedman once described Indonesia as “too big to fail, too messy to work,” and for a time its fledgling democracy made it even messier than before.

Indonesia is probably best understood in terms of dualities. Dualism Number One is embodied in the Indonesian term for “fatherland,” 

 which literally means land and sea. The sea divides the islands but it also unites them. Because the island interiors are mountainous, the people of the archipelago have always had to reach across the water to connect and trade with others.

Dualism Number Two juxtaposes the fertile island of Java, home to the majority of Indonesians, against all the rest. The others are collectively known as the Outer Islands, where soils are typically poor and hard to cultivate. They are big producers of oil, rubber, spices, timber (from rapidly vanishing tropical forests), gold, copper, and, perhaps most notably, coal.

The Outer Islands include California-sized Sumatra, with the fervently Islamic province of Aceh at its northern tip; Borneo, four times the size of Java but with only one-twelfth its population; and Sulawesi, the one that on a map looks like a Rorschach inkblot, with so many arms that early explorers thought it was more than one island and called it “the Celebes.”

Dualism Number Three, perhaps the most important, is Apparent Chaos vs. A Degree of Coherence. Apparent Chaos derives mainly from the sheer complexity of Indonesia’s diversity and the related messiness of its politics. Indonesia’s reputation for chaos also derives from its turbulent past, captured most famously in the 1982 film 

, which dramatized the spasm of anticommunist killings in 1965 and 1966 after Suharto took power. (Like many Javanese, he used only a single name.) Generally suave and polite individually, Indonesians historically have had a penchant for kris-wielding mob violence. The word “amuck” is of Malay/Indonesian origin, and anthropologists once used it to describe a peculiarly Southeast Asian form of hysterical mass attack.

The Degree of Coherence results from a shared past, especially a common nationalism forged in resistance to Dutch colonialism. Trade united the archipelago, and at times parts of it were under consolidated political rule. It was blessed by linguistic unity. Most of Indonesia’s languages belong to one great family, including the national language, Indonesian. (Papua, Indonesia’s half of the great island of New Guinea, is the only region with significantly different linguistic and historical roots, and it is no coincidence that it has a separatist movement.)

After more than a decade as an increasingly stable and genuinely free democracy, Indonesia is beginning to make its weight felt in the wider world. On Wall Street there is talk of Indonesia adding its “I” to the BRICs, as the world’s largest emerging economies.

Indonesian is a modern version of Malay, a traditional language of regional trade. The Dutch, who began to colonize Indonesia in the 17th century, made Malay into an official administrative language in order to avoid teaching the natives Dutch, which they feared might encourage dangerous notions of equality. When Indonesian nationalists emerged early in the 20th century, they realized they had been handed a national language on a silver platter, and thus avoided the plague of multiple tongues that would afflict so many other nation-builders in the developing world. Today Indonesian is spoken by the overwhelming majority of the population, but usually as a second language.

Dozens of local languages and major cultural variations remain, scattered through Indonesia’s fragmented ethnic landscape, but the country’s religions are layered, having arrived one on top of another. Most Indonesians were animists and ancestor worshipers until around the fifth century AD, when Indian traders and holy men introduced Hinduism and Buddhism, together with the concept of divinely endorsed monarchy. These new influences gave birth to the long-lived kingdom of Srivijaya in the seventh century and Majapahit in the late 13th century as well as some of the world’s greatest “Indian” art, such as the monumental Borobudur Buddhist temple in central Java.

Islam arrived a millennium later, brought by Muslim Indians who traded in cloves and nutmeg with the people of the Spice Islands in what is now eastern Indonesia. Although Islam gradually became Indonesia’s majority religion, the archipelago was never completely Islamized. Hinduism survived on the island of Bali, and important pockets of animism remained elsewhere. The Dutch introduced Christianity, which took root among animists and the economically important Chinese minority that began arriving on the heels of the Europeans.

Indonesian Islam soon began to display another dualism. In order to achieve widespread conversion of the local people, especially in Java, it was important for Islam to tolerate or incorporate powerful Hindu and animist traditions, much as the Prophet had done when he made the Kaabah, an ancient shrine in Mecca, the central holy place of Islam. But debate about precisely where the line between tradition and Islam should be drawn began early and has continued. By the 19th century, an uneven polarization had developed between those favoring doctrinal strictness—fundamentalism, if you will—and those leaning toward tolerance.

During the Japanese occupation of Indonesia in World War II, an enduring division emerged between those who wanted an Islamic state that required adherence to sharia law by all Muslims, and nationalists led by Sukarno (most of them also Muslims). The nationalists, mindful of Indonesia’s diversity and bent on national unity above all else, preferred a pluralistic state, requiring only belief in One God. He was assumed by many to be Allah, but this was not enough for those who felt that Indonesia’s majority religion deserved a more specific role.

When Sukarno declared independence in 1945, he enshrined his pluralistic credo in the Indonesian constitution. Advocates of Islamic statehood remain a force, but today the great majority of Indonesia’s Muslims are moderates, both doctrinally and politically. Many of them belong to one of two Muslim mass organizations, Nahdlatul Ulama (NU) and Muhammadiyah, with a combined membership estimated at 60 million.

While the two organizations are internally diverse, they reflect the polarity that developed before the colonial era. NU represents a primarily Javanese tradition of relative tolerance, with strong ties to the more mystical Sufi branch of Islam, while Muhammadiyah has been more influenced by fundamentalism.

In order to achieve widespread conversion of the local people, especially in Java, it was important for Islam to tolerate or incorporate powerful Hindu and animist traditions, much as the Prophet had done when he made the Kaabah, an ancient shrine in Mecca, the central holy place of Islam. But debate about precisely where the line between tradition and Islam should be drawn began early and has continued.

In contrast to most Islamic organizations in the Middle East, both NU and Muhammadiyah have strongly supported democracy and government development programs. Both operate schools, hospitals, and other affiliates. Neither participates directly in politics, but most members of Islamic political parties in Indonesia—there are about half a dozen major ones, as well as multireligious parties—have ties to one or the other. In line with NU’s tradition of relative tolerance, some of its leaders have taken a liberal line on issues such as women’s rights, helping the organization to develop a new constituency among Indonesia’s burgeoning middle class. Abdurrahman Wahid, a product of NU who succeeded Habibie as president in 1999, even advocated closer ties with Israel.

Yet there is also a darker strand in Indonesian Islam. During the Suharto era, Saudi-financed religious schools promoted Wahhabi-style fundamentalism. The Saudi teachings were not explicitly violent, but they strengthened the intellectual basis for violent extremism, which had already taken root in Indonesian soil. In 1948, a Muslim extremist group calling itself Darul Islam had launched a guerilla war against Sukarno’s nationalists in parts of Java and elsewhere. Not finally defeated until 1962, Darul Islam left behind remnants that provided the nuclei for later manifestations of Islamic extremism.

In 1993 two Indonesian clerics, Abdullah Sungkar and Abu Bakar Bashir, formed Jemaah Islamiyah, a regional Southeast Asian jihadist organization that recruited Indonesians to fight in Afghanistan. The jihadis returned home with motivation and bomb-making know-how, attacking hotels, embassies, and Christian churches, and stoking unrest in Sulawesi and the Malukus (as the Spice Islands are now known). Occurring at the same time that Indonesia was staggering under the impact of widespread unrest and score settling brought on by the beginning of Habibie’s decentralized democracy, the attacks helped persuade many analysts that the country was falling apart.

The ugliest crime of all came in 2002, when Jemaah Islamiyah terrorists bombed a nightclub in Bali, killing more than 200 people, most of them foreign tourists. The world was shocked: Hindu Bali is supposed to be a place for eating, praying, and loving. But no one was more upset than Indonesians, who are proud of beautiful Bali and keenly appreciate the tourist revenues it generates. The slaughter left Jemaah Islamiyah discredited, and the ensuing government drive against it—Indonesia’s security forces now have a deserved reputation for competence—led to a three-year stretch free of violent extremism. Though suicide bombers struck again in 2009, attacking two luxury hotels in Jakarta, the terrorism trend line is down sharply.

Indonesia’s Islamic unrest feeds on a streak of paranoia that almost all Indonesian Muslims share to some extent. It has many roots, including resentment over what are seen as the anti-Muslim wars led by the United States in the Middle East and Afghanistan. Equally important is the grating reality that while Muslims are a majority of the population, Islamic activists have been unable to make headway against Indonesia’s multireligious constitution.

In 1967, the hopes of Muslim conservatives were high after the army put down a bungled communist power grab and deposed the aging Sukarno. Muslim youth groups in Java had helped the army carry out the killings during “the year of living dangerously,” which left thousands of nominally communist peasants dead and communism itself virtually exterminated. When the dust settled, Muslim leaders expected recognition and political rewards for their support. The newly installed Suharto, however, had spent years as a young army officer pursuing Darul Islam rebels and continued to regard political Islam as a threat. And he also saw it as a convenient replacement for the demolished Indonesian Communist Party as a specter that could be used to justify military rule.

Suharto was not all bad. The first two decades of his reign brought near-double-digit economic growth rates, spurred by oil revenues and the president’s technocratic reforms. The introduction of high-yielding rice varieties lifted farmers’ incomes, while family planning programs reduced the looming threat of Malthusian disaster in Java and Bali and spurred the emergence of a village-level, motor scooter–riding middle class. From the time of its arrival with the spice trade, Islam in Indonesia had always thrived on commerce, and so it did again. Muslims grew increasingly observant, with headscarves and other forms of Islamic dress becoming more fashionable, while the more relaxed and quasi-animistic Islam of peasant Java practically disappeared.

Prosperity and globalization have nurtured new expressions of Islam, from urban intellectual discussion groups to lifestyle-centered radio ministries. One creative Internet imam caused a minor sensation when he urged his listeners to emulate the Prophet’s supposed practice of taking baths with his wife. But rapid change also brought increasing secularization among Indonesia’s urban youth. Religious conservatives, disturbed by pornography, nightclubs, and symptoms of female liberation, provided a new political base for a draconian understanding of sharia, including support for such practices as the stoning of adulterers, polygamy (which is legal but controversial), and even, among a small minority, acts of terrorism such as the Bali bombing.

While terrorism is in retreat, Islamic vigilantism is a serious problem, most notoriously the repeated violence by the Islamic Defenders’ Front (FPI) against Ahmadiyyah, an Islamic sect that has offended other Muslims by claiming that its founder was a new prophet. The government has often chosen to look the other way. When FPI activists attacked a group of moderate Muslims and others in 2008 who had protested FPI violence, injuring a dozen, the perpetrators got off with short stays in jail. Such incidents, including violence against Christians and their churches in Muslim areas, violate Indonesia’s constitutional guarantee of religious freedom. However, the country’s generally admirable but very cautious president, Susilo Bambang Yudhoyono, has thus far refused to risk alienating his fundamentalist Muslim supporters by enforcing the law.

The government’s reluctance to crack down on the thuggery of the FPI and others is a major blemish on Indonesia’s democracy, all the more so because it is accompanied by more general weaknesses in the judicial system, which is shot through with corruption. A few years ago, I interviewed Goenawan Mohamad, a famous Indonesian journalist and Muslim liberal who has felt the sting of FPI intimidation. I asked him if the country needed more laws, perhaps a bill of rights, to control such threats. “No,” he said, “we have enough laws; we need to enforce the laws that we have.” Most Indonesian intellectuals would probably agree.

Public opinion polling, highly developed in Indonesia, often shows alarming degrees of support (although never majorities) for harsh interpretations of sharia, such as cutting off thieves’ hands. But there is no evidence that such sentiment signifies increasing support for an Islamic state. Very different and more credible evidence is available from the results of the four truly free national elections held since Indonesia’s independence, in 1955, 1999, 2004, and 2009. Despite the greatly increased level of Islamic observance over this period, about three-quarters or more of all voters have supported political parties that favor the pluralistic status quo rather than an Islamic state. In 2009, only 13 percent of voters chose parties seeking or appearing to seek a rejection of pluralism.

Indonesia has been the world’s third-largest genuine democracy since 1999, and one of its few Muslim-majority ones. That is arguably the most important quality of the country, even more important than its economic potential or its role in regional affairs. More than one-third of Indonesia’s national budget is devoted to supporting decentralized local governments, all of which have lively, competitive elections.

Decentralization seems to be working, despite plenty of bumps in the road. No one was surprised that it added a confusing new layer to the Indonesian policy process. People were taken unaware, however, when local initiative began to stimulate new regional nodes of economic growth in places such as Riau, in central Sumatra, and Samarinda, a coal-mining center in Borneo, reducing Jakarta’s hitherto unhealthy dominance. Indonesia’s experiment could be a model for other countries, such as Turkey, that have often been too timid to release real power to local governments.

Indonesia’s tremendous diversity does make for a messier kind of democracy, but it also makes some kind of democracy imperative. That is an idea that should sound familiar to Americans; it is one reason why the United States has a federal system with several layers of government.

Many facets of Indonesian reality that puzzle outsiders can be understood as a healthy response to diversity. In fact, it often makes sense to look for clues to Indonesian puzzles in the United States, which frequently has forged a similar set of responses to enormous diversity. The national and local components of both the Indonesian and American political systems regularly get crosswise of each other. Both countries have a dominant religion that is not the state religion. Our respective fundamentalists are shocked by the excesses of youth and do things that worry the moderate majority. Our politicians sometimes make things worse by pandering to vocal minorities.

, usually translated as “unity in diversity,” seems to mean almost the same thing as 

, and may have been inspired by American precedent. But if you parse the ancient Balinese text from which it comes, there is a subtle but powerful difference. The text is concerned with the dual religions of the Majapahit Empire: Buddhism, the religion of contemplation and scholarship, and Hindu Sivaism, best understood as the religion of state affairs. The verse from which the motto is drawn reads, “They are indeed different, but they are of the same kind, as there is no division in truth.” Unity, the verse suggests, is not always seen on the surface, and may sometimes be realized only through striving.

Indonesia’s tremendous diversity does make for a messier kind of democracy, but it also makes some kind of democracy imperative.

In both the United States and Indonesia, diversity tends to push politicians toward the moderate center—at least in the long run. In a handful of Indonesian localities, politicians who hoped to attract fervently Islamic voters have enacted religiously inspired regulations that forbid women to be outdoors after dark, for example, or require knowledge of the Qur’an as a prerequisite for government employment. The regulations are probably illegal, since the decentralization laws did not empower localities to regulate religion, but Jakarta has done nothing to stop them. Many foreign journalists have pointed to these measures as a sign of creeping “sharia-ization” in Indonesia. What most of them fail to mention is that such regulations have proved to be unpopular with most voters, and no new ones have been enacted since 2006.

It is easy to find portents of disaster in Indonesia’s story, but one doesn't need to be an extreme optimist to imagine a fine future for this often-mystifying country. It has become a model democracy against all odds, and there is every reason to hope that it can continue to build on its recent progress. As in all healthy democracies, its problems are in plain view. For instance, the future role of political Islam remains a question mark. Another issue is uneven economic performance. Indonesia boasts one of the fastest-growing stock markets in Asia and economic growth averaging around six percent; it breezed through the recent global downturn virtually untouched. But its widespread poverty and low rate of job creation are still problematic, and the corruption of the judicial system, combined with the heavy hand of bureaucracy, still deters foreign investment.

Like Americans, Indonesians love political jokes and innuendo. My favorite example of Indonesian humor involves the vast Istiqlal Mosque in Jakarta, which President Obama visited on his recent trip. The building was commissioned long ago by President Sukarno, who once grandiosely claimed that he blended all the world’s faiths and philosophies in his own person (though he certainly did not hang on the fine points of any of them). In this syncretic spirit, Sukarno selected a Protestant member of the Batak ethnic group from North Sumatra as the architect of the Istiqlal Mosque, which was to be the largest such structure in Southeast Asia.

Years later, during the Suharto regime, when the mosque was finally inaugurated, people noticed that its vast dome was supported by 12 pillars. Instant uproarious joke—the pillars obviously represented the Twelve Apostles and had been purposely smuggled into the plan by the Christian architect, probably with a wink and a nod from his less than devoutly Muslim patron!

It almost certainly wasn't true, but it was far too funny not to repeat. As long as people are laughing, one can hope, they will keep anger at bay.

, a retired U.S. Foreign Service officer, is the author of 

Understanding Islam in Indonesia: Politics and Diversity

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It is the world's most populous Muslim-majority nation and a highly successful democracy. How did Indonesia do it? 

Robert Pringle