The fierce ethnic conflict that engulfed the West Kalimantan region of Borneo last year, resulting in indigenous Dayaks beheading immigrant Madurese and eating their hearts, is not simply a case of native people reverting to their savage ways. It's part of a much larger drama that has been building in Indonesia for years.

The very existence of this nation--with more than 200 million people comprising 300 ethnic groups spread out across 17,000 islands--is a complicated matter. Until the recent political upheaval, Indonesia, which was created out of a hodgepodge of Dutch colonial holdings at the end of World War II, has been under the rule of just two strongmen: Sukarno, a left-leaning nationalist who led the fight for independence, and Suharto, an army general who wrested control of the country in 1966 after a failed coup that resulted in the massacre of half a million people. Suharto, with generous assistance from the International Monetary Fund and Western investors seeking a workforce with rock-bottom wages, launched a massive campaign of economic development, and in his 30 years of near-autocratic rule presided over impressive gains in literacy, life expectancy, and gross domestic product.

But this progress, as Curtis Runyan's thoroughly researched story on the Indonesian crisis in World Watch magazine (May/June 1998) notes, has come at a steep price: Anything standing in the way of Suharto's vision of economic development was treated as high treason and punished accordingly. Another part of the price, not known to anyone outside Borneo until recently, was the genocidal rage growing within the Dayaks.

The dark side of Indonesia's economic miracle came out in dribs and drabs during mainstream media coverage of massive protests leading to Suharto's ouster in May. In particular, there were disturbing reports about the rampant cronyism that gave the dictator's friends and family a piece of the action in nearly every major economic deal of the past three decades. World Watch goes beyond that to detail how Indonesia's celebrated 10 percent annual economic growth was achieved by wholesale exploitation of the natural environment and how it primarily benefited a small class of people. Mining and timber corporations laid waste to vast sections of the country, stealing land from indigenous people, destroying rainforests, and disrupting centuries-old patterns of sustainable agriculture. Two and a half million indigenous people in Kalimantan were displaced by logging and other projects during the 1970s alone. The forest fires that blackened skies across portions of Southeast Asia last year, for instance, were largely the fault of reckless forestry practices on massive lumber plantations owned by Suharto's associates. The Suharto regime, which received considerable military aid from the United States, also conducted brutal assaults against the nations of East Timor and West Papua, both of which resisted Indonesia's plans to absorb their homelands.