John McBeth – These are uncertain times for Indonesia's 4 million bureaucrats as they struggle to adjust to a new political environment in which public scrutiny is putting old practices at risk. Many civil servants have found themselves the target of public wrath for past or present infractions. Others are contemplating the prospect of forced transfers and fewer under-the-table payments.

Unlike President B.J. Habibie, Coordinating Minister for Economy and Finance Ginandjar Kartasasmita seems resigned to a new role in the opposition. He says bureaucrats will have to develop a "neutral mentality," throwing off their obsessive loyalty to the ruling Golkar party, of which he is a member, and learning to support whoever is in power. Under a reformist government, they will have little other choice.

Former ministers Emil Salim and Mohamad Sadli predict officials will find it hard to break out of the New Order government's cocoon of dependency and think for themselves. "You can make beautiful rules," says Sadli, "but old habits die hard."

Corruption is one example. With the state-run Pertamina oil company alone losing $6.1 billion to graft and inefficiency in the past two years, according to independent auditors, reformers say the corruption problem has to be tackled head-on. That has bureaucrats worried. "Quite a lot of people in government are now asking themselves how they will get paid if the system changes," says one government adviser. "Many of them just can't live on their basic salaries."

Yusuf Faishal, the architect of the National Awakening Party's economic platform, says only a hefty pay increase, a merit-based promotion system and tough penalties for offenders will reduce official corruption. The World Bank suggests that publicizing cases such as that at Pertamina would create pressure for change. But the culture of corruption is embedded in the civil service through patronage networks and personal loyalties, making it unlikely that real change will come quickly.

Despite the enactment of new local-autonomy laws that devolve power to the district level and provide resource-rich provinces with a greater share of their revenues, for example, many National Development Planning Agency officials in Jakarta still believe they will somehow continue to lord their former power over the regions. "This is about the control of projects – and projects mean money," says one Western finance official. Although he says the agency should remain active in planning various aspects of development, he says its role should be trimmed in line with the new laws.

Anoop Singh, the International Monetary Fund's deputy-director for Asia and the Pacific, says decentralization is the "single most important issue" facing Indonesia – more important than bank restructuring or corporate debt. When the local-autonomy laws were rushed through parliament in April, the IMF and the World Bank had serious misgivings. But now they seem ready to work with the new legislation.

Singh believes the two-year implementation period will give officials enough time to improve human-resource management and accountability procedures at the district level. He and other experts say it's also important for the regions to develop an income-tax base that brings in enough funds to cover their budgets. Development funds, they say, should be dispersed as rewards for sound local management.