It is generally believed that the earliest inhabitants of the Indonesian archipelago originated in India or Burma. Later migrants came from southern China and Indochina and began populating the archipelago around 3000 B.C.
The Dutch East India Company, based in Batavia (Jakarta), dominated the spice trade and took control of Java by the mid-18th century, when its power was already in decline. The Dutch took control in the early 19th century and by the early 20th century, the entire archipelago - including Aceh and Bali - was under their control.
Burgeoning nationalism combined with Japanese occupation of the archipelago during WWII weakened Dutch resolve, and it finally transferred sovereignty to the new Indonesian republic in 1949. Achmed Soekarno, the foremost proponent of self-rule since the early 1920s, became president. In 1957, Soekarno overthrew the parliament, declared martial law and initiated a more authoritarian style of government. Once in power, Soekarno set about consolidating his power through monument-building and socializing the economy, a move that paradoxically created a divide between the "haves" and "have-nots" and left much of the population teetering on the edge of starvation.
Rogue militia groups, widely thought to be controlled and equipped by the Indonesian military, rampaged through East Timor after it overwhelmingly voted for independence in 1999 and local police forces and parts of the army were sent in to quash other rebellions.
A United Nations peacekeeping force brought stability to East Timor, but prompted Indonesian outrage at the "meddling in internal affairs." When the dust finally settled, the East Timorese had been granted independence. Soon afterward, Abdurrahman Wahid became Indonesia's first democratically elected president.
Indonesia faces numerous crises: rising Islamic extremism, military insubordination, official corruption, a fledgling and fragile democratic process and many separatist movements threatening to tear the country apart. On October 12, 2002, bombs targeting Western tourists claimed around 200 lives in Bali. An extremist group with links to Al-Qaeda was responsible.
Religious violence also plagued the Maluku islands, where Christians and Muslims reached a short-lived peace deal in February 2002. In April, though, masked gunmen massacred 14 Christian villagers. Fighting between Christians and Muslims has claimed more than 6,000 lives since 1999. In Irian Jaya and Aceh, guerrillas have been fighting for independence from Jakarta for decades.
In 2005, Indonesia reached a historic peace agreement with armed separatists in Aceh, which led to democratic elections in December 2006. Indonesia faces low-intensity armed resistance in Papua by the separatist Free Papua Movement.
Source: The World Factbook, 2014.