Indonesia embarked on a bold new path following the end of the Soeharto regime in 1998, winning praise for its transformation into a democratic society, while at the same time undergoing a radical exercise in decentralization. Significant powers have been devolved to a mushrooming number of administrative regions under Law Number 22 on Regional Government, passed in 1999 and revised in 2004. The central government in Jakarta maintained authority over security and defense, foreign policy, monetary and fiscal policy, the judiciary and religious affairs, while other responsibilities were transferred to the regions – in particular the country’s districts.

In the beginning, many questioned the wisdom of decentralization. Some predicted that regional autonomy would immediately cause the conflict-weary nation to disintegrate. Talk of separatism was growing in far-flung but resource-rich provinces following rampant cases of human rights abuses and religious and ethnic clashes. However, in less than five years, Indonesia remarkably proved that it could stick together. Through the implementation of what the World Bank called “Big Bang decentralization,” the central government was able to simmer down tensions, and the country transitioned confidently toward the wider practice of democracy, culminating in yet another round of parliamentary and presidential elections in 2014.

Disproportional transformation