Vaudine England, Jakarta – Giving money and power to more than 350 districts across the country is the only way Indonesia can survive as a nation-state, the Minister of Settlement and Regional Infrastructure, Erna Witoelar, said yesterday.

A profound rearrangement of national and regional government must take place in just over a month. It threatens to herald large-scale disruption and localised corruption as district leaders take on new government functions.

However, the Government believes potential chaos is the price that must be paid for decades of centralised rule. "The sooner and the better that we get decentralisation and regional autonomy, the more chance [we have] to keep the unity of the country," Ms Witoelar told a seminar on regional autonomy. "Sharing the power, I agree, is something very difficult, but it is inevitable if you want to keep the unity of this country."

Indonesia faces serious threats to national unity from separatist uprisings in Aceh and Irian Jaya, and also from a breakdown in law and order across large swathes of the country. Regional populations have long felt abused and exploited by the rapacious central Government and have, in the past three years of democratisation, increasingly taken the law into their own hands.

In all provinces, communities have forcibly reclaimed land taken from them by businesses linked to former autocrat Suharto, or attacked foreign mining companies accused of depleting resources. Newly elected local governments include many inexperienced and greedy legislators eager to get their hands on Jakarta's purse strings, and there are concerns that both government and business enterprises will be unable to function.

"They've only got a month to get a whole lot of laws and people into place and it's going to be crazy, really a mess," an American executive told the seminar.

He cited an example in which a local district head promised free land to his constituents to get elected, while the foreign mining company occupying the land worried what would happen to its contractual claim.

"I want to assure you that with all the uncertainties, and all the new experiences we are going to have, there are many good commitments we have to save this country," said Ms Witoelar. "If a bird has been too long in a cage, then its wings are maybe not strong enough and if it tries to fly too soon, it will drop. But the important thing is the Government is really changing."