The period began on 17 August 1950 following the dissolution of the federal United States of Indonesia, less than a year after its formation, and ended with the imposition of martial law and President Sukarno's decree, which resulted in the introduction of Guided Democracy on 5 July 1959.

[1] Following more than 4 years of brutal fighting and violence, the Indonesian National Revolution was over, with the Dutch–Indonesian Round Table Conference resulting in the transference of sovereignty to the United States of Indonesia (RIS).

These factors among many others, resulted in the dissolution of all the constituents of the RIS, which were later merged again as part of the unitary Republic of Indonesia by 17 August 1950, the fifth anniversary of the Declaration of Independence.

Regional differences in customs, morals, tradition, religion, the impact of Christianity and Marxism, and fears of Javanese political domination, all contributed to disunity.

In the hands of a young and inexperienced government, the economy was unable to boost production of food and other necessities to keep pace with the rapidly increasing population.

Inflation was rampant, smuggling cost the central government much needed foreign exchange, and many of the plantations had been destroyed during the occupation and war.

On 22 January 1951, the parliament passed a vote of no confidence, resulting in Prime Minister Natsir returning his mandate to the president on 21 March 1951.

[6] Following the resignation of the Natsir Cabinet, attempts were made by political leaders, such as Sartono, to form a coalition government between Masyumi and the PNI.

However, this proved to be difficult, as disagreements arose, including over the turnover tax, the regional councils, the West Irian issue, and seat distribution in such a cabinet.

[8] The Soekiman cabinet was notable for its poor relations with the army and its suppression of the Indonesian Communist Party (PKI), following a series of militant strikes between June and August 1951.

After a dismissal of a pro-government officer in July 1952, the parliament began demanding a significant restructuring of armed forces leadership, and after three months tensions culminated in thousands of demonstrators mobilized by the army in Jakarta.

President Sukarno managed to temper the demonstrators and assure the army officers, but refused to concede to any demands.

[13][14] After over six weeks of bargaining and five attempts at various party combinations, a new cabinet led by the PNI, with support by the NU, was formed with Ali Sastroamidjojo serving as Prime Minister.

Under the Ali Sastroamidjojo's first cabinet, the bureaucracy was expanded with more PNI officials, the economy was under a period of Indonesianization, with the government encouraging indigenous businessmen to open new firms.

Those present included Zhou Enlai, Jawaharlal Nehru, Phạm Văn Đồng, Mohammad Ali Bogra and Gammal Abdel Nasser.

[20] Under Burhanuddin Harahap, harmonization between the government and the army began, as well as the termination of the Netherlands-Indonesia Union, as a form of protest over the West Irian issue.

This cabinet was forced to resign because of changes in the political system made by President Sukarno through the Presidential Decree of July 5, 1959.

With the support of the military, he proclaimed in February 1957, 'Guided Democracy', and proposed a cabinet of representing all the political parties of importance (including the PKI).

The government then formed Provisional People's Consultative Assembly (MPRS) institutions in a guided democracy that implemented a political system of balance.

During this period, the prime minister was in charge of the Cabinet of Indonesia, one of the three branches of government along with the Provisional People's Representative Council and the president.

[citation needed] Throughout the Liberal Democracy era, a large number of political parties existed within Indonesia.