After Suharto's fall in May 1998, Indonesia embarked on a tumultuous political transition that was characterized by economic instability, security challenges, social fragmentation, and extensive experiments with new institutional concepts. It would take more than six years before an institutionally coherent framework for the new political system emerged, marking Indonesia's entry into the phase of democratic consolidation. In few areas was the political fluidity and uncertainty of the polity between 1998 and 2004 as tangible as in the field of civil-military relations. The assessments on the progress of military reform in that period differ immensely, ranging from Megawati's claim during the 2004 presidential campaign that democratic civilian supremacy had been firmly anchored during her rule to the reports of human rights groups and activists that the armed forces had in fact consolidated their political powers (East Timor Action Network/U.S. 2002). Writing in 2003, William Liddle tried to weigh the arguments put forward by the various camps. On the one hand, he asserted, the armed forces “did not attempt to prevent then Vice-President B.J. Habibie, a civilian disliked by the military, from becoming president” (Liddle 2003). They also refrained from undermining the “project to democratize Indonesia by holding free parliamentary elections, the first since 1955”. In addition, the military “formally rescinded its twin-functions doctrine”. Despite all these positive indicators, however, Liddle concluded that there is “a slowly dawning recognition that nothing fundamental has in fact changed since 1998”. The armed forces, he maintained, “continue to hold a self-image and possess resources that predispose and enable them to intervene in national political life in a manner and at a time of their own choosing”. Even within intellectual circles of the armed forces, there was acknowledgement that “while the post-New Order civilian governments … managed to reduce some of the institutional privileges of the military, this reduction did not result in a significant decline in the political powers of the armed forces” (Yulianto 2002, p. 612).

The explanation for these contrasting characterizations of Indonesia's civil-military transition between 1998 and 2004 is partially rooted in the way the New Order regime transferred power to its successor government.