Chapter 8 Indonesia’s Decentralization: The Big Bang Revisited Marco Bünte Indonesia’s political system has long been one of the most centralized in the world. Centralized planning and decision-making, and a huge financial dependency of local authorities on grants from the center, gave local governments little room to manoeuvre. In fact, the geographic nature of the Indonesian archipelago, and the ethnic composition of the country 1 have always provided arguments for the creation of strong sub-national governments. However, the state’s centralistic framework remained intact because politicians feared the disintegration of the nation-state, the regime elite lacked willingness to give power to the local level to enable people to manage their own affairs, and bureaucrats resisted a reduction of their powers through decentralizing reforms. As Kahin (1994:204) pointed out, “neither under the Dutch nor in the subsequent nearly half century of independence has anything more than lip service been paid to a government structure allowing for a considerable devolution from the centre.” Regional resistance against this centralistic polity was suppressed by force (as in West Sumatra and South Sulawesi in the 1950s), and regional leaders were either brought to silence or co-opted by the regime (Amal 1992; Kahin 1999: 252f.). Nevertheless, regional sentiments against the center’s domination were never completely mute. Rather, the issue of decentralization remained contested for decades (Rohdewohld 1997:195f.). After the fall of President Soeharto in 1998 and the liberalization of the political system, an opportunity emerged to revise the centralistic polity. President Habibie initiated an unprecedented decentralization process. Within only two years all major responsibilities of the central state (except for foreign affairs, defence, trade policy, monetary policy, fiscal balance and religion) were to be transferred to urban and rural districts. 2 They were endowed with new financial resources to deliver services and generate regional development; 2.4 million civil servants were to be