In the lee of low volcanic hills studded with banana trees and palms, the port of Bakauheni spreads across the coastal flats along the Sunda Strait. Bakauheni holds a special place in Indonesia — the main ferry terminal linking the resource-rich island of Sumatra and the population centers of Java, with 19 ferries plying 17 miles of open water each day. In the parking lot, long lines of trucks await their turn to board. But it is not the delays that bother Randi, a truck driver from Palembang hauling 15 tons of Sumatran coffee to Jakarta. It is the taxes that have sprouted along the road he travels. "Every place has one," he complains after paying his 2,000 rupiah (16 cent) port toll, one of many such levies he has paid along the way. Another pair of truckers, Khairul and his assistant Samsi, say they have paid as many as 10 tolls over the 200-km distance from Palembang, costing about $4.24, a tenth of the monthly basic wage. "For me," says Samsi, "it's more sadness."

The bad feelings have been spreading ever since a Big Bang devolution scheme came into force on Jan. 1 and handed sweeping new powers to local governments. Port manager Martyn Usanjati says every Indonesian port is thinking about following the lead of Lampung Selatan regency (an administrative unit roughly equivalent to a county or municipality), which imposed the Bakauheni toll. "This is a product of regional autonomy," Martyn says. "The Indonesian people are getting a dizzy head." It's not just customs duties but every manner of tax and user fee. Name it, hard-pressed regencies and provinces are trying to tax it.

Tax creativity is only the most visible consequence in Indonesia's overnight attempt to turn what was one of the most centralized governments in the world into one of the most devolved. Local autonomy was designed to bring government closer to the people — improving services and quelling simmering separatist sentiment. It would have been ambitious for the best-managed country. But in Indonesia, with a chaotic central government and unprepared local administrations, devolution is turning into a bad dream in a long night of turmoil. Businesses are facing new rules cooked up by regional officials eager to expand their turf, and their budgets. Residents are counting the cost of new cars and perks for local poobahs. The end result may well be that the country dissolves into a gaggle of ministates ruled by little princes warring among themselves over ever smaller pieces of a shrinking economic pie.

Paradoxically, pushing power out to the regions has been confounded by a lack of authority at the center. On April 30, parliament slapped President Abdurrahman Wahid with a second censure motion against the backdrop of unruly demonstrations in the capital. That put Wahid one step closer to impeachment, but the process is expected to drag on through August, leaving the country with only the shadow of a central government. By its own admission, Wahid's administration has failed to set the regulations needed to make devolution work. "To do this, they actually need a strong central government and I am not so sure they even have a government," says Hans Vriens, country manager for consultancy Apco Indonesia. He says he has found even ministers often don't understand the process.

Sometimes it seems that the incompetence is calculated. How else to explain the fact that the president's men also downgraded the status of the regional autonomy ministry? That prompted the former minister and one of the architects of the plan, Ryaas Rasyid, to resign in frustration. Andi Mallarangeng, a former Ryaas lieutenant, now a consultant, says Jakarta has botched the implementation so badly that autonomy is getting a bad name.

Across the country, local governments have been turned loose with a whole host of new responsibilities but often lack the revenues and expertise to meet popular expectations. In the past, says Syaukani, head of the association of bupatis (mayors) of regencies, Jakarta's approval was needed to hire even a secretary. Now, jurisdiction over key areas such as health, education, agriculture, mining, trade and industry, even coastal waters, resides with more than 350 regencies. Indonesia's 27 provinces, whose larger bureaucracies might have been better prepared, got only limited new powers. That means a mining company that used to deal directly with Jakarta might now be talking with a small-city mayor. "Try going with a contract from a bupati to a New York bank [for financing]," says Vriens.

From the regencies' point of view, all the extra authority is not necessarily a boon, because their paper powers do not come with money. Revenues from oil, natural gas and mining are shared by the center and the regions. But that helps only resource-rich areas. Says Lampung Selatan planning chief Rusdi Maliki: "It's easier for Riau because there's more money." He's talking about a region farther north in Sumatra that is home to Indonesia's largest oil fields. In Riau, local governments expect to share about $500 million this year in resource revenues, as well as subsidies from Jakarta. Lampung's gets a proportionately larger subsidy because it has only a trickle of income from natural resources. Even so, it feels shortchanged compared with its better endowed neighbors. That has fed resentment that poorer regions are paying the price to tame the separatist ambitions of richer cousins.

It is this revenue shortfall that has led to a proliferation of tollbooths. Along one 100-km stretch of road through Lampung Selatan, there are five stops. Some are simple, one-price tax pits. Others, like a provincial station for trucks at Gayam, charge a complicated levy based on the quantity of particular commodities: 2 cents a kilo for cloves, $1.70 per cow. There's even a price should a truckload of monkeys come through: 42 cents per simian. "The people are happy they can help" the public purse through their toll payments, says one collector.

Yeah, right. Two years ago, when the province first tried to impose the toll, locals burned the station to the ground. With the advent of autonomy, the province is trying again, but public sentiment has not changed. When the port tax, which also levies a small charge on passengers, was established in early April, authorities had to call the police to quell a demonstration.

Tax greed is not just limited to road tolls. Lampung Selatan tried to extend a tax on advertising, usually applied to billboards, a step further. Creative officials argued that each Coke bottle produced at the local bottling plant was an advertisement because it bears the Coke logo. Same with instant noodles produced by Indofood and instant coffee produced by Nestle. The companies have lobbied successfully to squelch the idea — so far — and have warned they could be forced to shut down if the tax were to be imposed.

Then there's the case of mining company Bukit Asam, which produces coal in the neighboring province of South Sumatra and ships it to tidewater in Bandar Lampung. About 10 trains a day make the run. Lampung province wants to tax the trains. Company officials have acknowledged they are negotiating about the levy. The Lampung chamber of commerce says investors, foreign and domestic alike, are upset. "No companies are closing but if this continues, companies will close and new investors won't come," says chamber president Mochtar Sany.

It's not just Lampung where officials are putting their ingenuity to work thinking up new sources of revenue, although some regencies are trying hard to be fiscally responsible. In Sukabumi, in West Java, the local government has managed to combine the certainties of death and taxes into a levy on cemeteries. The province of West Kalimantan wants to tax the printing of regional maps. In East Java, Magetan regency is proposing identity cards for cows. According to recent research, someone shipping commodities from the province of West Nusa Tenggara, east of Bali, to Jakarta has to pay 22 different taxes.

It wasn't supposed to look this way. Ryaas and Mallarangeng argued that local governments should get a stable tax base with a share of corporate taxes and complete jurisdiction over property taxes. That approach, however, was vetoed by the finance ministry, leaving local governments to make do with a budget subsidy determined by Jakarta plus whatever minor levies they could scrape up. Hence the scramble to raise money — a process that could end up hurting everyone. Indonesia's international donors said in a statement last month that the imposition of new taxes "may impede the competitiveness of local businesses as well as constrain foreign investment, thereby undermining the nation's growth prospects."

Devolution's shortcomings can also be seen on the spending side of the ledger. "It seems each regency wants its own international airport, its own freeways," says an executive of a financial services company with offices across Indonesia. In Lampung, activists say local politicians are voting themselves money for new cars and housing to go with their increased authority. Meanwhile, the elementary school in Sukamaju, a poor, fishermen's suburb of Bandar Lampung, has seen little impact. Authority over education was shifted from Jakarta to local officials, but thanks to inept or corrupt officials, the funds often don't trickle further down. Headmistress Septinar Syamsuri says the school, with more than 350 students, lacks sufficient books, desks and chairs. The local well is contaminated with seawater; the children have no money for bottled water so teachers bring jugs of drinking water from home. "The teachers are poor and the students are poor," Septinar says. "So far it's the same as before."

At Bakauheni port, Heri, a truck driver from Medan, says he wouldn't mind paying tolls if the roads were better maintained. "I don't think it is fair to make us pay when we know the money only goes into the pockets of government officials." Edwin Hanibal, leader of the Lampung Legal Aid Society, says bringing government closer to the people is a good idea, but so far he complains, "autonomy means taxes go up and the welfare of the people goes down."

Is there anyone who can straighten out the mess? In fact, part of the plan was to prevent the rise of any one person who can. Conceived after the downfall of former president Suharto, who had ruled Indonesia like a Javanese king for over three decades, autonomy aimed to prevent a dictator from concentrating power in his or her hands. "The idea was, no more Suhartos," says Mallarangeng. The mixture of reforming zeal, central government ineptitude and local inexperience, steeped together in economic collapse, is making Indonesia impossible for anyone to govern at all.