Indonesia’s forests are among the most diverse and spectacular in the world.Yet with an annual deforestation rate as high as 1.5 million ha, the stateof the remaining forest is a matter of concern for the entire international community (see Chapter 5). So far Indonesia’s record of managing its resources and responsibilities has been mixed. Before the Asian economic crisis, the country was lauded as a capitalist success story, with rising standards of living and rapid industrialization. Yet even before that bubble burst, Indonesia had a second face-the exploitation of not only resources but also people (specifically expropriation and corruption, the repression of indigenous peoples, and the unsustainable extraction of the country’s natural wealth). In October 1999, Indonesia seemed to teeter between an extractive and centralist past and an uncertain future. This chapter provides a historical context in which to understand this ongoing transition.1