The 1997 Asian financial crisis , which hit Indonesia particularly hard , brought an end to the New Order in 1998 , and subsequently , the occupation of East Timor . In the post-Suharto era , strengthening of democracy has included a regional autonomy programme and the first direct presidential election in 2004 . Political , economic and social instability , corruption , and terrorism slowed progress ; however , in recent years , the economy has performed strongly . Relations among the diverse population are mostly harmonious , though sectarian discontent and violence have persisted . Indonesia was the worst-hit country by the 2004 Indian Ocean earthquake and tsunami that killed around 130,000 people , mainly in Aceh . The aftermath of the disaster played a part in achieving political settlement to the region 's insurgency in 2005
2004 Indian Ocean earthquake and tsunami
2004 Indian Ocean earthquake and tsunami
Indonesia