Suharto, accompanied by the commanders of the navy, air force, and police, met with Sukarno on 11 February to reject his offer and to wait instead for the result of the MPRS special session.

[2] On 20 February 1967, Sukarno chose to relinquish all executive power to Suharto whilst still retaining his position as president.

Originally calling for an MPRS special session to be held for the purpose of reviewing Sukarno's performance as well as reaching a final decision on whether or not he was involved with the 30 September Movement (G30S), the DPR now asked that the MPRS special session add Suharto's appointment as acting president to the agenda.

Such was the intensive debate surrounding this matter that the special session did not finish on 11 March 1967 as intended but had to go for another extra day.

The 1966 MPRS General Session passed a resolution calling for legislative elections to be held no later than 5 July 1968[5] and this became one of the first matters that Suharto attempted to address during his acting presidency.

[6] For the political parties, the main point of contention was whether the legislative election would use the district system or proportional representation.

To accommodate the political parties, Suharto backed out of the notion of a district system and began supporting proportional representation; the trade-off being that the Government would be able to appoint some of the DPR members.

The bill was resubmitted to the DPR on 16 December 1967 but by January 1968, Suharto reported to the Chairman and Vice-Chairmen of the MPRS that it would be impossible to hold a Legislative Election in 1968.

[9] The MPRS Resolution which appointed Suharto to the acting presidency also gave him the power to take legal action against Sukarno.

Suharto chose not to take any legal action and instead, Sukarno was still allowed to reside at the Presidential Palace and enjoy his freedom.

Speaking on 13 March 1967, Suharto insisted that Sukarno was still President and Head of State, although without the political power that came with the office.

[10] During the course of 1967, Suharto confirmed that West Papua would be given a plebiscite concerning the matter of integration with Indonesia—the Act of Free Choice.

The idea of pooling together the nations of Southeast Asia into one organization came from Thanat Khoman the Thai minister of foreign affairs.

On 8 August 1967, the five foreign ministers signed the Bangkok Declaration, marking the formation of the Association of South East Asian Nations (ASEAN).

[17] The emergence of Suharto as acting president was well received by the Western countries, who was keen to not only invest but give aid.

Relationship with the Soviet Bloc cooled down, but Suharto would nevertheless work towards repaying the debt incurred during the Sukarno government.

Measures had been taken to create a doctrinal justification for the armed forces' interference in non-military matters, formulated as dwifungsi and hankamrata by one of his immediate predecessors as defense minister, Abdul Haris Nasution.

[19] Outside of the army, the air force had been weakened enough by its alleged involvement in the 30 September Movement by its then chief of staff, Omar Dhani.

In an effort to help the government form policy in this field, law enforcement agencies (the Supreme Court, the Ministry of Justice, the Attorney General's Office, and the National Police) held a conference in Cibogo, West Java.

[24] In the months leading up to Suharto's assumption of the acting presidency, the trials of Old Order figures revealed that they had been very corrupt.

Technically speaking, however, Suharto's budgets ran deficits, because foreign aid and external borrowing were not counted as revenue.

On 26 August 1967, the DPR passed the Amendment and Revision of Collection Methods for Income, Wealth, and Corporate Taxes Law, with Suharto smoothing out the details through a Government Regulation (Peraturan Pemerintah).

[34] With agricultural production still not functioning at maximum capacity, Suharto had to make do with ensuring that the supply of rice and the stability of price was guaranteed.

Although the bad harvest meant that Bulog was unable to fulfill its target purchase, it had 280,000 tonnes of rice under its control.

In July 1967, the government simplified the export and import procedures in addition to taking a step back and giving private sector an opportunity and assistance to conduct trade.

Some of the non-petroleum imports included rice, flour, fertilizers, cement, paper, iron, steel, tractors, and aircraft.

The importance of petroleum quickly become apparent by the fact that it was Indonesia's top export earner for the year 1967, bringing in $770 million's worth of revenue.

By the end of 1967, 23 projects with the backing of foreign capital was approved: 14 direct investments, 8 joint ventures, and 1 working contract.

Starting from mid September to early October 1967, protocols on debt rescheduling were agreed upon and signed between Indonesia and the governments of East Germany, Czechoslovakia, and Hungary.

The law outlined not only the criteria for being a veteran, but also their privileges; including receiving preferences should a veteran apply to be a civil servant in government, being allowed to go back to their old civilian jobs after they finished their service, and to receive skills education from the government before they return to full civilian life.