In 1602 the States-General of the Netherlands granted a 21-year monopoly for colonial activity in Asia to a joint stock trading company, the Verenigde Oostindische Compagnie or VOC (the Dutch East India Company). Over the next two-hundred years the VOC established a colonial-empire known as the Dutch East Indies on the islands of Sumatra, Java, New Guinea and Borneo. In 1800, the VOC became bankrupt, and following a short period of British rule the Dutch state government took the reigns of power in Indonesia.
In spite of a more ethical colonial policy, a nationalist independence movement emerged in the early twentieth-century, which the Dutch suppressed. Yet, following their invasion and occupation of the Dutch colonial territories during the Second World War, the Japanese encouraged Indonesian nationalism in return for support from the leaders of the independence movement, Sukarno and Mohammad Hatta, for the Japanese war effort.
In March 1945, the Japanese organised the Badan Penyelidik Usaha Persiapan Kemerdekaan Indonesia (BPUPKI), an organising committee for granting independence to Indonesia. This committee, including Sukarno and Hatta, drew up a constitution and received a promise from the Japanese that independence would be granted on 24th August. But, before this could happen, the Japanese surrendered – two days later, on 17th August 1945, the committee’s leaders declared Indonesian independence.
The Dutch, with British support, tried to restore their rule. But, following a four year campaign international pressure resulted in the Netherlands recognising Indonesian independence in December 1949 as a federal republic. On 17th August 1950, five years after the declaration of independence, the dissolution of the last federal states created the unitary Republic of Indonesia.
A more detailed story of Indonesian independence is told on the Network Indonesia web site.