The year 1998 was a momentous one for Indonesia, and it ushered in a three-year period of sustained upheaval and uncertainty that extended to Aceh as well. In stunningly quick succession, the Asian financial crisis sent the country's economy into freefall, Suharto was forced from office after 32 years in power, and his Vice-President B.J. Habibie was elevated to the presidency. Under Habibie, armed forces commander Gen. Wiranto declared an end to the military's heavy-handed approach to Aceh and even apologized for abuses by "individual soldiers" during the preceding decade. Habibie also agreed to a UN-supervised referendum process through which East Timor voted for independence in August 1999. Suddenly, it seemed to the Acehnese that anything - even independence - was possible.
In October 1999, Indonesia's legislature elected a new president: Abdurrahman Wahid, a Muslim cleric renowned for his commitment to political pluralism, dialogue, and reform, including his desire to reduce the military's long-standing political influence. Known simply as Gus Dur, Wahid vacillated between a referendum or negotiations to settle Aceh's status. Fundamentally, however, he was committed to dialogue. The arrival of the Henry Dunant Centre for Humanitarian Dialogue (HDC) on the scene in late-1999 was therefore extremely serendipitous.
Now known as the Centre for Humanitarian Dialogue, the HDC was a brand-new, Geneva-based organization, established by humanitarian practitioners formerly associated with International Committee of the Red Cross and the UN and aimed at protecting civilians from armed conflict by helping to resolve underlying disputes. The East Timor crisis prompted HDC to send a senior staff member to the region, and widespread speculation about Indonesia's possible break-up induced HDC to focus on Aceh. Much to their surprise, HDC staff quickly found themselves meeting senior Indonesian officials, including Gus Dur, and reaching out to GAM leaders in exile. A dialogue process started in early 2000 soon yielded a May agreement on a Joint Understanding on a Humanitarian Pause , intended to open up humanitarian access to the most war-affected parts of Aceh and start a process of confidence-building between GAM and the TNI.
In a harbinger of later events in 2002-03, HDC in fact stumbled into a larger, more ambitious role as a third party than it had expected or planned for. Suddenly, HDC was faced with managing joint government-rebel committees on security and humanitarian issues, guiding dialogue on implementing provisions in the Pause, and fielding more international staff to support expanded operations in Banda Aceh. GAM enjoyed the greater international status that the Humanitarian Pause seemed to confer and looked forward to continued talks that could further their cause, and humanitarian operations were briefly able to reach more of the war-affected population. But stinging criticism of the government by national legislators and even top military commanders underscored critical weaknesses in the Pause: that it provided cover for GAM to increase its revenue, augment its membership, and extend its control at the local level while government forces were prohibited from offensive operations. Ultimately, the HDC-led monitoring effort was unable to stem provocative let alone belligerent behaviour by the parties, and it could never get past security-focused debates at the level of "colonels and one-star generals," as one HDC staffer put it.
The Humanitarian Pause itself finally fell apart in 2001. Attacks against ExxonMobil's liquefied natural gas (LNG) facilities, blamed on GAM, caused them to be closed for the first time in Aceh's war. This only strengthened TNI claims that GAM was using the Pause to regroup if not grow. GAM retorted that the Indonesian government was talking peace while waging war. The TNI sent further reinforcements, and Jakarta finally announced its formal withdrawal from the Humanitarian Pause. By early 2001 the military leadership had begun to regain the upper hand in its struggle with the president. Faced with the patent failure of the Humanitarian Pause and limited political capital, Gus Dur authorized all-out security operations against GAM in April, and HDC-led peace efforts broke down almost entirely.
Political machinations finally led to Wahid's downfall in July. His successor Megawati Sukarnoputri was expected to bring the country greater stability and a smaller appetite for ambitious reforms. She did continue to seek a negotiated solution to the Aceh conflict, albeit half-heartedly. One of President Megawati's first acts was to sign legislation granting Aceh "special autonomy" after decades of government hostility toward this idea. This deal, while never fully implemented at the time, renamed the province Nanggroe Aceh Darussalam (NAD) and provided for a strong governor's office, Islamic law (Shari'ah) within NAD, and direct elections at the provincial and district levels. It also included revenue-sharing in LNG proceeds at a generous 70-30 split in Aceh's favour during an initial period of eight years (after which revenues would be shared equally). The autonomy deal - which the national parliament passed in a non-consultative fashion that only engendered further hostility toward it - was rejected by GAM out of hand.