This chapter covers the collapse of the New Order during the 1997–98 Asian Financial Crisis and the emergence of the Reformasi period. It examines the IMF intervention, banking sector collapse, currency depreciation, and sociopolitical unrest that led to Suharto’s resignation. The new democratic governments introduced political liberalization, decentralization, and anti-corruption reforms. However, the economic recovery was uneven, and institutional fragmentation hindered policy coherence. The chapter argues that while Reformasi marked a democratic opening, it also exposed the limits of technocratic governance and the enduring power of oligarchic networks in shaping development outcomes.