After scrapping the Ministry of Regional Autonomy in August, it refused to set up a special coordinating agency to speed up the process. It has also slowed the transfer of civil servants from central to local control and moved to curb the ability of local governments to borrow indiscriminately for spending binges. And on January 5, Minister for Mines and Energy Purnomo Yusgiantoro said the mining industry would remain under Jakarta's control for up to five years. Yet concerns remain about whether the central government can retain much of its authority without provoking a backlash from restive local governments eager for their promised slice of power. The prognosis, so far, is not encouraging.
Central ministries have different expectations.
It could be a real dog's breakfast. It wasn't meant to be this way. Regional autonomy, says Rasyid, was supposed to bring government closer to the people, encourage healthy competition for investment, and minimize the risk of Indonesia disintegrating. But those rosy expectations aren't shared by many. Instead of business-friendly local governments competing to offer companies tax breaks and good infrastructure, foreign investors worry that they will face rapacious politicians who raise taxes arbitrarily and officials who lack the capacity to implement regulations.