To maintain order, Suharto greatly expanded the funding and powers of the Indonesian state apparatus. He established two intelligence agencies — the Operational Command for the Restoration of Security and Order (KOPKAMTIB) and the State Intelligence Coordination Agency (BAKIN) — to deal with threats to the regime. 
In economic matters, President Suharto relied on a group of American-educated economists, nicknamed the "Berkeley Mafia," to set policy. Soon after coming to power, he passed a number of reforms meant to establish Indonesia as a center of foreign investment. These included the privatization of its natural resources to promote their exploitation by industrialized nations, labour laws favorable to multinational corporations, and soliciting funds for development from institutions including the World Bank, Western banks, and friendly governments.
Between 300,000 and one million Indonesians were killed in the mass-killings following the arrest of PKI members in Suharto's cabinet on 6 October 1965. Both the military and auxiliaries from conservative Muslim, Catholic, Hindu and secular nationalist militias conducted the killings. Though most communists were identified by locals, the CIA is known to have supplied the Indonesian military with a list of 10,000 suspected communists. Ironically, a CIA study of the events in Indonesia assessed that "In terms of the numbers killed the anti-PKI massacres in Indonesia rank as one of the worst mass murders of the 20th century..".
It must also be noted that, in addition to the CIA, British and Australian intelligence were well aware of events as they transpired.
Time Magazine presented the following account on 17 December 1966 : "Communists, red sympathisers and their families are being massacred by the thousands. Backlands army units are reported to have executed thousands of communists after interrogation in remote jails. Armed with wide-bladed knives called parangs, Moslem bands crept at night into the homes of communists, killing entire families and burying their bodies in shallow graves."
"The murder campaign became so brazen in parts of rural East Java, that Moslem bands placed the heads of victims on poles and paraded them through villages. The killings have been on such a scale that the disposal of the corpses has created a serious sanitation problem in East Java and Northern Sumatra where the humid air bears the reek of decaying flesh. Travellers from those areas tell of small rivers and streams that have been literally clogged with bodies."