For more than four years after the proclamation of Independence, Indonesians had to defend their self-proclaimed freedom through revolutionary struggle as the Dutch attempted to reassume the control over the territory. In this critical historical phase, the national euphoria of independence provided the impetus for all political traditions to strive to actualize their own political dream.

This resulted in internal power struggles and clashes of ideologies which were reflected in the short lifespans of the early cabinets. From 19 August 1945 until 20 December 1949, the new nation experienced the rise and fall of nine cabinets each of which lasted less than two years. Despite this internal fragmentation, however, an historical bloc survived temporarily based on a common will to resist the aggression from the outside.

Through revolutionary warfare and negotiations, Indonesia at last achieved its formal and legal sovereignty. The Round Table Conference held at The Hague from 23 August to 2 November 1949 resulted in an agreement to the unconditional and complete transfer of sovereignty by the Netherlands no later than 30 December 1949, of the entire territory of the former Netherlands East Indies, except for West New Guinea, to the republic of the United States of Indonesia (RUSI).

The RUSI was to have the sovereign of the Netherlands as a symbolic head, Sukarno as president, Mohammad Hatta as vice-president and also prime minister (1949–50). It consisted of the original Republic of Indonesia and fifteen Dutch-created political units (states). Dutch investments were to be protected, and the new government was to be responsible for the billion-dollar Netherlands Indies government debt.