Until a few years ago, appraisals of Indonesia as Southeast Asia's foremost democratic success story were common place. There has been broad consensus that Indonesia is a model of procedural democracy, most of all manifest in three successfully held consecutive national elections. President Susilo Bambang Yudhoyono has been described as a reliable partner to Western nations, a Muslim moderate, and a political stabilizer. Owing to his credentials as a reformer, he has also been termed a “political game-changer”. Indeed, Yudhoyono's administration received deserved praise for its resolution of communal conflicts and for its reformist economic policies. Under the rigorous leadership of Finance Minister Sri Mulyani Indrawati, state finances and tax structures were improved, corrupt officials in the customs and tax services replaced, and fuel subsidies reduced. The President made it a priority to end three decades of futile military oppression of the province of Aceh; he also spearheaded a successful campaign against Islamic terrorism.

During 2010 many observers, however, began to question how successful Indonesia's democratic consolidation had been. Over the last two to three years they have gradually been replaced by a more balanced and more sober perspective on the country's state of affairs. It has gradually become clear that Indonesia's swift transition to democratic rule and its proud standing as the world's largest Muslim-majority democracy has clouded over underlying and deeply rooted deficiencies in the country's political culture.

The year 2010 reinforced the view that improving the quality and efficiency of Indonesia's public institutions and the extension of internal reforms in a poorly performing bureaucracy and police force remain among the biggest challenges for Yudhoyono's government. Several high-profile corruption cases revealed the country's legal system to be graft ridden. Despite the creation of independent bodies such as the Judicial Commission, the successes of procedural democracy have done little to strengthen the rule of law. These deficiencies render Yudhoyono's second term in office somewhat of a second transitional period in post–New Order Indonesia, as much defined by irresolution as by growing awareness of persistent shortcomings. In his state of the nation address on 16 October 2010 the President thus announced “a second wave of reform”. This second wave, he said, was “not about changing but accentuating the objectives (of the first wave) … and to increase the pace of change”.