Unlike Burma and the Philippines, Indonesia was not granted formal independence by the Japanese in 1943. No Indonesian representative was sent to the Greater East Asia Conference in Tokyo in November 1943. But as the war became more desperate, Japan announced in September 1944 that not only Java but the entire archipelago would become independent. This announcement was a tremendous vindication of the seemingly collaborative policies of Sukarno and Hatta. In March 1945, the Investigating Committee for Preparatory Work for Indonesian Independence (BPUPKI) was organized, and delegates came not only from Java but also from Sumatra and the eastern archipelago to decide the constitution of the new state. The committee wanted the new nation's territory to include not only the Netherlands Indies but also Portuguese Timor and British North Borneo and the Malay Peninsula. Thus the basis for a postwar Greater Indonesia (Indonesia Raya) policy, pursued by Sukarno in the 1950s and 1960s, was established. The policy also provided for a strong presidency. Sukarno's advocacy of a unitary, secular state, however, collided with Muslim aspirations. An agreement, known as the Jakarta Charter, was reached in which the state was based on belief in one God and required Muslims to follow the sharia (in Indonesian, syariah--Islamic law; see Glossary). The Jakarta Charter was a compromise in which key Muslim leaders offered to give national independence precedence over their desire to shape the kind of state that was to come into being. Muslim leaders later viewed this compromise as a great sacrifice on their part for the national good and it became a point of contention, since many of them thought it had not been intended as a permanent compromise. The committee chose Sukarno, who favored a unitary state, and Hatta, who wanted a federal system, as president and vice president, respectively--an association of two very different leaders that had survived the Japanese occupation and would continue until 1956.

On June 1, 1945, Sukarno gave a speech outlining the Pancasila; the five guiding principles of the Indonesian nation. Much as he had used the concept of Marhaenism to create a common denominator for the masses in the 1930s, so he used the Pancasila concept to provide a basis for a unified, independent state. The five principles are belief in God, humanitarianism, national unity, democracy, and social justice.

On August 15, 1945, Japan surrendered. The Indonesian leadership, pressured by radical youth groups (the pemuda), were obliged to move quickly. With the cooperation of individual Japanese navy and army officers (others feared reprisals from the Allies or were not sympathetic to the Indonesian cause), Sukarno and Hatta formally declared the nation's independence on August 17 at the former's residence in Jakarta, raised the red and white national flag, and sang the new nation's national anthem, Indonesia Raya (Greater Indonesia). The following day a new constitution was promulgated.

The Indonesian republic's prospects were highly uncertain. The Dutch, determined to reoccupy their colony, castigated Sukarno and Hatta as collaborators with the Japanese and the Republic of Indonesia as a creation of Japanese fascism. But the Netherlands, devastated by the Nazi occupation, lacked the resources to reassert its authority. The archipelago came under the jurisdiction of Admiral Earl Louis Mountbatten, the supreme Allied commander in Southeast Asia. Because of Indonesia's distance from the main theaters of war, Allied troops, mostly from the British Commonwealth of Nations, did not land on Java until late September. Japanese troops stationed in the islands were told to maintain law and order. Their role in the early stages of the republican revolution was ambiguous: on the one hand, sometimes they cooperated with the Allies and attempted to curb republican activities; on the other hand, some Japanese commanders, usually under duress, turned over arms to the republicans, and the armed forces established under Japanese auspices became an important part of postwar anti-Dutch resistance.

The Allies had no consistent policy concerning Indonesia's future apart from the vague hope that the republicans and Dutch could be induced to negotiate peacefully. Their immediate goal in bringing troops to the islands was to disarm and repatriate the Japanese and liberate Europeans held in internment camps. Most Indonesians, however, believed that the Allied goal was the restoration of Dutch rule. Thus, in the weeks between the August 17 declaration of independence and the first Allied landings, republican leaders hastily consolidated their political power. Because there was no time for nationwide elections, the Investigating Committee for Preparatory Work for Indonesian Independence transformed itself into the Central Indonesian National Committee (KNIP), with 135 members. KNIP appointed governors for each of the eight provinces into which it had divided the archipelago. Republican governments on Java retained the personnel and apparatus of the wartime Java Hokokai, a body established during the occupation that organized mass support for Japanese policies.

The situation in local areas was extremely complex. Among the few generalizations that can be made is that local populations generally perceived the situation as a revolutionary one and overthrew or at least seriously threatened local elites who had, for the most part, collaborated with both the Japanese and the Dutch. Activist young people, the pemuda, played a central role in these activities. As law and order broke down, it was often difficult to distinguish revolutionary from outlaw activities. Old social cleavages--between nominal and committed Muslims, linguistic and ethnic groups, and social classes in both rural and urban areas--were accentuated. Republican leaders in local areas desperately struggled to survive Dutch onslaughts, separatist tendencies, and leftist insurgencies. Reactions to Dutch attempts to reassert their authority were largely negative, and few wanted a return to the old colonial order.

On October 28, 1945, major violence erupted in Surabaya in East Java, as occupying British troops clashed with pemuda and other armed groups. Following a major military disaster for the British in which their commander, A.W.S. Mallaby, and hundreds of troops were killed, the British launched a tough counterattack. The Battle of Surabaya (November 10-24) cost thousands of lives and was the bloodiest single engagement of the struggle for independence. It forced the Allies to come to terms with the republic.

In November 1945, through the efforts of Syahrir, the new republic was given a parliamentary form of government. Syahrir, who had refused to cooperate with the wartime Japanese regime and had campaigned hard against retaining occupation-era institutions, such as Peta, was appointed the first prime minister and headed three short-lived cabinets until he was ousted by his deputy, Amir Syarifuddin, in June 1947.

The Dutch, realizing their weak position during the year following the Japanese surrender, were initially disposed to negotiate with the republic for some form of commonwealth relationship between the archipelago and the Netherlands. The negotiations resulted in the British-brokered Linggajati Agreement, initialled on November 12, 1946. The agreement provided for Dutch recognition of republican rule on Java and Sumatra, and the Netherlands-Indonesian Union under the Dutch crown (consisting of the Netherlands, the republic, and the eastern archipelago). The archipelago was to have a loose federal arrangement, the Republic of the United States of Indonesia (RUSI), comprising the republic (on Java and Sumatra), southern Kalimantan, and the "Great East" consisting of Sulawesi, Maluku, the Lesser Sunda Islands, and West New Guinea. The KNIP did not ratify the agreement until March 1947, and neither the republic nor the Dutch were happy with it. The agreement was signed on May 25, 1947.

On July 21, 1947, the Dutch, claiming violations of the Linggajati Agreement, launched what was euphemistically called a "police action" against the republic. Dutch troops drove the republicans out of Sumatra and East and West Java, confining them to the Yogyakarta region of Central Java. The international reaction to the police action, however, was negative. The United Nations (UN) Security Council established a Good Offices Committee to sponsor further negotiations. This action led to the Renville Agreement (named for the United States Navy ship on which the negotiations were held), which was ratified by both sides on January 17, 1948. It recognized temporary Dutch control of areas taken by the police action but provided for referendums in occupied areas on their political future.

The Renville Agreement marked the low point of republican fortunes. The Dutch, moreover, were not the only threat. In western Java in 1948, an Islamic mystic named Kartosuwirjo, with the support of kyai and others, established a breakaway regime called the Indonesian Islamic State (Negara Islam Indonesia), better known as Darul Islam (from the Arabic, dar-al-Islam, house or country of Islam), a political movement committed to the establishment of a Muslim theocracy. Kartosuwirjo and his followers stirred the cauldron of local unrest in West Java until he was captured and executed in 1962.

More formidable were the revitalized PKI led by Musso, a leader of the party from the insurgency of the 1920s, and Trotskyite forces led by Tan Malaka. The leftists bridled at what they saw as the republic's unforgivable compromise of national independence. Local clashes between republican armed forces and the PKI broke out in September 1948 in Surakarta. The communists then retreated to Madiun in East Java and called on the masses to overthrow the government. The Madiun Affair was crushed by loyal military forces; Musso was killed, and Tan Malaka was captured and executed by republic troops in February 1949. An important international implication of the Madiun insurrection was that the United States now saw the republicans as anticommunist--rather than "red" as the Dutch claimed--and began to pressure the Netherlands to accommodate independence demands. Even though the republican government demonstrated it could crush the PKI at will and many PKI members abandoned the party, the PKI painfully rebuilt itself and became a political force to be reckoned with in the 1950s.

Immediately following the Madiun Affair, the Dutch launched a second "police action" that captured Yogyakarta on December 19, 1948. Sukarno, Hatta, who was there serving both as vice president and prime minister, and other republican leaders were arrested and exiled to northern Sumatra or the island of Bangka. An emergency republican government was established in western Sumatra. But The Hague's hard-fisted policies aroused a strong international reaction not only among newly independent Asian countries, such as India, but also among members of the UN Security Council, including the United States. In January 1949, the Security Council passed a resolution demanding the reinstatement of the republican government. The Dutch were also pressured to accept a full transfer of authority in the archipelago to Indonesians by July 1, 1950. The Round Table Conference was held in The Hague from August 23 to November 2, 1949 to determine the means by which the transfer could be accomplished. Parties to the negotiations were the republic, the Dutch, and the federal states that the Dutch had set up following their police actions.

The result of the conference was an agreement that the Netherlands would recognize the RUSI as an independent state, that all Dutch military forces would be withdrawn, and that elections would be held for a Constituent Assembly. Two particularly difficult questions slowed down the negotiations: the status of West New Guinea, which remained under Dutch control, and the size of debts owed by Indonesia to the Netherlands, an amount of 4.3 billion guilders being agreed upon. Sovereignty was formally transferred on December 27, 1949.

The RUSI, an unwieldy federal creation, was made up of sixteen entities: the Republic of Indonesia, consisting of territories in Java and Sumatra with a total population of 31 million, and the fifteen states established by the Dutch, one of which, Riau, had a population of only 100,000. The RUSI constitution gave these territories outside the republic representation in the RUSI legislature that was far in excess of their populations. In this manner, the Dutch hoped to curb the influence of the densely populated republican territories and maintain a postindependence relationship that would be amenable to Dutch interests. But a constitutional provision giving the cabinet the power to enact emergency laws with the approval of the lower house of the legislature opened the way to the dissolution of the federal structure. By May 1950, all the federal states had been absorbed into a unitary Republic of Indonesia, and Jakarta was designated the capital.

The consolidation process had been accelerated in January 1950 by an abortive coup d'état in West Java led by Raymond Paul Pierre "The Turk" Westerling, a Dutch commando and counterinsurgency expert who, as a commander in the Royal Netherlands Indies Army (KNIL), had used terroristic, guerrilla-style pacification methods against local populations during the National Revolution. Jakarta extended its control over the West Java state of Pasundan in February. Other states, under strong pressure from Jakarta, relinquished their federal status during the following months. But in April 1950, the Republic of South Maluku (RMS) was proclaimed at Ambon. With its large Christian population and long history of collaboration with Dutch rule (Ambonese soldiers had formed an indispensable part of the colonial military), the region was one of the few with substantial pro-Dutch sentiment. The Republic of South Maluku was suppressed by November 1950, and the following year some 12,000 Ambonese soldiers accompanied by their families went to the Netherlands, where they established a Republic of South Maluku government-in-exile.