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CIAO DATE: 06/04

Indonesia: Managing Decentralisation and Conflict in South Sulawesi

July 18, 2003

International Crisis Group

Abstract

What has been the impact of Indonesia's radical decentralisation program, launched on 1 January 2001, on conflict prevention and management? This case study of the district of Luwu in South Sulawesi finds results that have thus far been positive. But it remains an open question whether these results are sustainable -- and whether Luwu's success is transferable to other parts of the country.

Indonesia devolved a wide array of powers to districts and cities -- the second tier of local government after provinces -- accompanied by substantial fiscal transfers from the centre. The legislation on which this decentralisation was based also allowed for the creation of new regions by dividing or merging existing administrative units. In practice, this process known as pemekaran has meant not mergers but administrative fragmentation and the creation of several new provinces and close to 100 new districts.

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