Since the fall of Soeharto in 1998, Indonesia has been developing into a democratic polity. Indeed, it could be argued that Indonesia is the most democratic Muslim country in the world today. At the same time, the country has witnessed the emergence of various Islamic groups, particularly those with militant tendencies, in the public sphere. Although many of these groups have their roots in the long history of Indonesian Islam, their emergence today cannot simply be understood as the resurfacing of previously repressed movements. Local, national and transnational socio-political developments in past decades have helped to shape the current character, ideologies and strategies of these groups.

In many parts of Indonesia, Islam has played a significant role in politics. Between the fourteenth and the eighteenth centuries, several local kingdoms in the Archipelago adopted Islam as the official religion. During the colonial period and the revolutionary war following the declaration of independence in 1945, Islam was often used as a symbol of opposition to foreign enemies. However, the members of the Indonesian elite who wrote the 1945 Constitution disagreed with one another concerning the position of religion in the state. One group opted for the implementation of Shariah by the state, while another preferred a national secular state. After a series of debates and negotiations, they finally reached a compromise, stating that Indonesia is based on Ketuhanan Yang Maha Esa (Belief in One Supreme Godhead), a principle which vaguely defines the state as neither secular nor Islamic, but more or less religious.

Looking at Indonesian history, we find that both secular nationalist and Islamic-oriented groups challenged this compromise, but none of them succeeded in imposing their views. The new political developments after the fall of Soeharto helped to reopen the debates on this ideological issue, but the same basic compromise was somehow maintained. During a session of the People's Consultative Assembly (MPR) in 2002, there were calls from some of the Islamic parties to insert a clause on Shariah implementation by the state into the Constitution, but they failed to gain sufficient political support in parliament, and the early compromise was ultimately reaffirmed.