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Indonesia is the biggest archipelagic state in the world, with roughly 17,000 islands, 6,000 of which are inhabited. The country has around 225 million inhabitants in many ethnic groups, speaking something between 250 and 600 different languages. 1 Even though these factors suggest a decentralised system of government as the best option, Indonesia was a highly centralised country under the government of Soeharto. 2 It was only after he resigned in May 1998, due to large scale and violent protests against him and the rapid economic downfall triggered by the Asian economic crisis, that a period of reform began. Soeharto handed over the presidency to his vice president Habibie. Despite this, protests continued since Habibie’s presidency was based on the power of Soeharto. In order to build up some legitimacy and calm down the protests, Habibie promised free and fair elections for June 1999 and initialised a process of political decentralisation, 3 i.e. the transfer of authority to subnational governments which are accountable to the populations of their territories. 4

Unity in Diversity or Diversity in Unity: Indonesia's Process of Political Decentralisation and its Effects on Conflicts