As discussed in Chapter 4, the fall of the Soeharto regime was followed by rising assertiveness in the regions outside Java that resented what they saw as excessive central domination while the weak Habibie government, challenged on all sides, was aware of its limited capacity to repress outbreaks of resistance to central rule. Indonesian leaders, including senior military officers, were alarmed by what seemed to be parallels with the break-up of the Soviet Union and Yugoslavia while public debate began to touch on what had previously been “unimaginable” — the disintegration of the republic. The leading candidate for secession was, of course, East Timor, where Indonesia's occupation since 1975 continued to meet with armed resistance within the territory and widespread condemnation among the international community. In a dramatic effort to settle the East Timor problem once and for all, President Habibie proposed the holding of a referendum in East Timor which led, in 1999, to an overwhelming vote in favour of independence, a massacre of supporters of independence by pro-Indonesia militias and the withdrawal in chaotic circumstances of the Indonesian administration and military. The referendum resolved the East Timor issue but it stimulated further demands in Papua and Aceh — the next two most probable candidates for secession — for their own referenda.

In fact, there was no realistic prospect that the Indonesian government would agree to release Aceh from the republic. Indonesia's national ideology, Panca Sila (Five Principles), formulated by Soekarno and upheld by Soeharto, portrayed Indonesia as a multi-ethnic, multi-religious and multi-cultural nation in which all ethnic and religious communities have a recognized place. The government saw itself as the successor of the Netherlands East Indies and therefore the inheritor of all its territory, including Aceh (but not East Timor). It argued further that the people of Aceh had identified with the nationalist struggle against Dutch colonialism and were an integral part of the Indonesian nation. In the wake of the collapse of the New Order, this vision was challenged by ethnic and religious violence leading to heightened fears of national disintegration, especially after the secession of East Timor. Indonesia's self-image, encapsulated in the national motto Bhinekka Tunggal Ika (Unity in Diversity), would be further devastated if one of its original regions were to follow East Timor's example.