This is the first issue of the SMERU Research Institute's newsletter after our researchers decided to continue SMERU's work as a fully autonomous organization. During the previous two years, administratively we worked under the auspices of the World Bank. However, in terms of the selection of topics, direction and research methods, the staff at SMERU were largely able to demonstrate a considerable degree of independence.

The management of SMERU has chosen regional autonomy as the central focus of this edition. Hence, the articles are mostly based on the results of an ongoing study of decentralization and regional autonomy conducted by the SMERU team since April 2000. These investigations have so far attempted to monitor the preparations of the regions for autonomy, before the implementation of Law No. 22, 1999 on Regional Government, and Law No. 25, 1999 on the Fiscal Balance between the Central and Regional Government. This research has been conducted in four kabupaten and three kota in seven different provinces.
 
Both the above mentioned laws became effective on January 1, 2001. From this point, the regional governments will be able to exercise their full autonomy based on these new policies. Coincidently, SMERU also decided to establish its full autonomy on the very same day. The policy of regional autonomy is aiming at strengthening regional governments to enable them to deliver better public services, and simultaneously striving to achieve a fairer and more equitable balance of authority and responsibilities between the central government and the regions. In line with this, we hope that a new autonomous SMERU will become one of those interest groups that may serve as a pillar in the formation of a long sought after democratic society.