John Aglionby, Jakarta – The Indonesian government has devolved a number of government powers from Jakarta to the provinces and districts. The aim is to detangle the heavily centralized central government and give the country's outer fringes some control over their fate. But for the moment, chaos – not control – appears to be the only dividend.

The new year was supposed to mark a new dawn in the lives of Indonesia's 200 million people. After decades of repression by the heavily centralized government in Jakarta, meaningful power in all areas except defense, monetary affairs and foreign policy was devolved to provincial and district level at a stroke on January 1. People living in the archipelago's outer fringes – that is, most of the population – would at last be able to shape their own futures according to their particular needs, making it much harder for the country to slip back into an autocracy. Or at least that was the theory. The reality is an incomplete and chaotic mess.

The local press is littered with quotes from local officials along the lines of: "We're a bit confused about the implementation of that regulation," and "We haven't got clear guidelines from Jakarta on that yet". Yet such shocking confessions are perfectly understandable considering that more than 150 of the 177 decrees governing regional autonomy have yet to be passed and almost 99% of the 2.6 million civil servants that were meant to be transferred from central to regional government posts have yet to pack their bags. More gloss came off the transition process on January 2 after the minister who designed the scheme, Ryaas Rasyid, tendered his resignation, citing irreconcilable differences with the president, Abdurrahman Wahid.

The consequence of this turmoil is inconsistency. To manage the muddle, local authorities are either making up their own rules – which are likely to changed once formal regulations are in place – or doing nothing until the mist has cleared in the capital. A good example, according to one foreign consultant advising the government, is comparing the health and education ministries. "In Jakarta health and education are going in very different directions while the finance ministry, which controls the purse strings, is pulling them in a third," he said. "This leaves provincial and district officials not knowing which way to turn."

In the mayhem, the delivery of government services is threatening to grind to a halt. "This is our biggest fear," said the foreign adviser. "Unless the fundamental problems are addressed rapidly, government will effectively stop, which is extremely dangerous in a country where so much is still nationalized." Other worries concern money. Some people worry about a growing imbalance in spending and revenue. This would stem not only from poor preparations but also arguments over the share of resources remaining in the regions. Currently, districts – the level to which most power is being devolved – will get about 15% of oil revenues, 30% of earnings from natural gas and 80% from mining and forestry. But many resource-rich areas are fighting to get a larger share.

Others worry that instead of having one corrupt government there will now be 350. And corruption is going to be much harder to contain, particularly as those in power have little direct accountability towards the people. District councilors are not directly elected and the administration chiefs will only be indirectly elected after the retirement of current incumbents. Certain industries, such as forestry (where illegal logging accounts for 80% of total production), are already suffering from widespread corruption and set to get worse.

There are a few glimmers of good news around. At the highest level of government there does at last seem to be a commitment to speedy and correct implementation of the plan. And at the grassroots level, civil society groups are starting to find their voice, thanks to the tens of millions of dollars in foreign aid that have been channeled into their development. This means a system of checks and balances could start to evolve once the initial transitional dust has settled.

There is no going back now, according to government expert Andi Mallarangeng, because "despite the chaos we've come too far already." But he fears that the authorities in Jakarta are losing sight of the whole raison d'etre of the devolution process. "One of the main aims of regional autonomy is for the government to recapture the trust of the people and the local administrations," he said. "But unless the government wakes up to the current reality they will quickly lose everyone's trust forever."