INTRODUCTION

This chapter presents the controversy over Irrigation Management Transfer (IMT) policy, as defined under the Water Sector Adjustment Loan (WATSAL), and how the policy conflicted with the bureaucratic identity of the Indonesian irrigation agency (at the time, under the Ministry of Public Works [MPW]). This conflict brings into light the antagonistic relationship between IMT policy and the very agency responsible for its implementation. With IMT renewal in 1999, pro-reform government officials in the newly formed Ministry of Settlement and Regional Development (Kimbangwil) attempted to remove the very foundation upon which the agency's existence and survival was based; that is, infrastructure-oriented development and its institutionalized rent-seeking practices. These pro-reform government officials consisted primarily of mid-level officials from the National Development Planning Agency (NDPA), mid-level officials from Ministry of Home Affairs (MoHA), and of course, Kimbangwil itself. Taking the evolution of IMT policy in Indonesia as my case study, I argue that as long as the irrigation agency's core actors remained antagonistic towards the IMT policy, the policy would continue to be contested with the irrigation agency.

This chapter broadly discusses the assumptions of and the rationale behind IMT policy formulation worldwide and specifically its implications for implementation in Indonesia. It starts with a critical analysis of IMT policy as defined by international donors and policy-makers (Section I) and highlights the gap in the current discourse on IMT policy (Section II). It then gives an overview of the IMT policy evolution in Indonesia and how the irrigation agency first shaped IMT implementation under the Irrigation Operation and Maintenance Project (IOMP) 1987 Statement (Section III). The chapter moves on to discuss the role the 1998 political upheaval played in accelerating the speed of irrigation sector reform, with my analysis focused primarily on the legal framework of the WATSAL IMT programme (Section IV). I then present the formal decision-making structure in WATSAL (Section V) and analyse how the WATSAL policy-makers strategically planned Water Users Association (WUA) empowerment in an attempt to eliminate institutionalized corruption within the irrigation agency (Section VI). The implementation set-up for the WATSAL IMT programme in 1999 is described in section VII.