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.

With some of those districts drawn along ethnic lines and vastly increased economic stakes for local political office, there have been fears of new conflicts over land, resources, or boundaries and of local politicians manipulating tensions for personal political gain. The decentralisation process, however, has also raised the prospect of better conflict prevention and management through the emergence of more accountable local government.

To examine how these hopes and fears might play out, ICG put under the microscope of intensive field study an area prone to conflict which underwent administrative division. Luwu, in South Sulawesi, was chosen for two reasons. First, it was one district in 1999, divided into four by 2003. Secondly, it shared many characteristics of areas that erupted in violence in the post-Soeharto era: tensions between migrants and indigenous groups; competition over resources, particularly land and mineral wealth; and significant communal violence. It became the focus of national attention in 1998 when protracted inter-village violence was brought on by land disputes, social and economic frustrations (peaking in 1998 when cacao prices hit a record high), and the general climate of lawlessness then prevailing.

In Luwu, at least, pemekaran has had a mostly positive impact, in large part because it allowed an effective district head to emerge. Luwu also benefited from the fact that ethnic identity there was too fragmented to be a significant basis for political mobilisation by unscrupulous local politicians. What also helped prevent conflict emerging was the common resentment, among members of the Luwu elite, of the South Sulawesi provincial elite, and a common desire to break away from South Sulawesi to form the new province of Luwu.

Beyond these local factors, however, several more general conclusions about decentralisation and conflict may be drawn:

• Lack of clarity in the laws governing decentralisation, together with the reluctance of agencies of the central government to give up power, inhibits the ability of local governments to prevent or manage conflict effectively.
   
• The success of a new district in preventing or limiting conflict depends in large part on the capacity, commitment, and connections of the district head (bupati) concerned.
   
• There is a fundamental contradiction between the retention by the central government of control over police and other security functions and the responsibility for law and order of district heads under the decentralisation laws. Police can only be deployed effectively to address conflict if they are accountable to and funded by local government.
   
• Effective management of land disputes is critical to conflict prevention.
   
• Strengthening the criminal justice system is key to establishing and maintaining peace between parties to a conflict. “Peacemaking” through traditional ceremonies is not enough.

Jakarta/Brussels, 18 July 2003