Yasmin Ghahremani and Tom Mccawley, Bandung – The prosperous, tree-lined streets of Bandung hearken back to an era earlier this century when the city was known as the Paris of Java. Dutch colonial administrators at that time enlisted European architects and town planners to transform Bandung into an elegant holiday destination dotted with Art Deco buildings and other designs of the day.

This heritage, along with cool mountain air, makes the city of 1.8 million people the envy of other large Indonesian centers. Hotels are packed with crowds fleeing Jakarta during weekends. "A lot of government big-shots like to come here and whoop it up," says Rus Edi, a taxi driver.

But a few years ago, it looked like all this was in danger of going the way of the Dutch, as unbridled development ate away at Bandung's colonial charm and blanketed it in a layer of blue haze.

"It all started with the deregulation of the banks in the late 1980s," says Frances Effendi of the Bandung Heritage Society. Foreign investment began to pour in and the region took off. Soon a middle class emerged, and with it came Western-style suburbs – one of them built on a water catchment area, causing nearby slums to flood during the rainy season. Jakarta-based property developers were allowed to ride roughshod over building regulations. Old theaters which used to screen silent movies were knocked down to make way for shopping centers, as was the 1871 jail in which a young Sukarno wrote angry anti-colonial pamphlets. Poor planning led to over-crowded, traffic-clogged streets.

Critics blame many of the city's social ills on the commando mentality of past leaders. Bandung is a garrison town and most of its mayors in the past 20 years have been military men. "They don't study social welfare or town planning in the army," says one housing activist. "They study territorial strategy and warfare."

Corruption was rampant. Regional elections were rigged, with village and neighborhood heads intimidating citizens into voting for the military candidates. The local parliament, known as the DPRD, did not regulate the civil service properly. A national culture of fear under former president Suharto kept many people silent. "They were afraid of intimidation," says activist Airanto.

But the tide appears to be turning in Bandung. Civilians are reclaiming their town, thanks in part to the reformasi that swept the nation after Suharto's fall last year. The country's first open ballot in 32 years helped the city usher in a new, fairly elected DPRD in June, which has approval rights over all mayoral candidates.

Increased freedom of speech now give Bandung's community activists and media a greater voice in exposing corruption among property developers and city officials. And new regulations on regional autonomy mean the Bandung government can for the first time raise its own revenue to build the roads and infrastructure it needs to ease congestion.

"Decentralization implies real participation of the civil society and the private sector," says Oliver Auge of GTZ, a German development agency setting up a solid waste management system in town. "And that is what we feel has been happening in Bandung to a somewhat greater extent compared to other cities in Indonesia."

Witness a slew of innovative improvement schemes, the GTZ project among them. The program employs 5,000 laborers to gather plastic rubbish and deposit it at a recycling center, tackling two social problems in one go. Another program, the Community Development Infrastructure Scheme, has won international recognition for its success in getting neighborhoods involved in planning and infrastructure. A similar initiative, devised by the previous mayor, Wahyu Hamijaya, gives district sub-divisions money for small-scale infrastructure projects such as wells, water pipes, paths and sewage. "The concept is based on empowering local communities," says Kamalia Purbani, an official of the Bandung urban planning bureau.

The Heritage Society has also been making progress, after years of less-than-affectionate protests over the destruction of buildings that should have been protected by law. "Money changed hands somewhere," says Muchtaram Karyadi, professor of urban planning at the Bandung Institute of Technology. But the society has managed to persuade several banks to buy heritage buildings and pay for their restoration. The local Bank NISP and Japan's Daiwa Securities have bought 1920s-era homes and turned them into regional branches.

Bandung has prosperity on its side too. The '90s boom greatly improved the material well-being of residents. The economy grew by 10% every year, a third higher than the national average. And it wasn't just the middle and upper classes that got richer. Workers benefited too. Bandung's industries – textiles, garments, tea and coffee – needed armies of labor. Rising wages attracted thousands from neighboring regions.

The challenge now, municipal leaders know, is to harness that material wealth and make it work for the citizens, not against them. Officials in many government departments are feeling upbeat. "To be honest, most of the steps forward have come since reformasi," says one senior bureaucrat. "People are more critical, and we have to be more careful." That is crucial if Bandung is to keep what charm it has left.