9. Kudus Central Java Java November 2000
10. Sukabumi West Java Java April 2000
11. Solok West Sumatra Western Indonesia July 2000
12. Karo North Sumatra Western Indonesia February 2001
13. Simalungun North Sumatra Western Indonesia February 2001
14. Deli Serdang North Sumatra Western Indonesia March 2001
Note: Areas in bold are municipalities.
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4 The original aim of this research was to assist and inform the government about the implementation of
regional autonomy by contributing accurate real-time information through regular reports, memorandums
and newsletters to policymakers, the donor community, political parties, community organizations,
Indonesia’s academic community, and other professional bodies.
The information was collected primarily through semi-structured interviews with
officials at all levels of government, as well as with representatives of political parties
and civil society institutions (including community organizations, NGOs, the press,
professional bodies, informal religious leaders, local-level traditional leaders, village
heads and members of village-level assemblies). The semi-structured nature of the
research has allowed for flexibility and consistency the investigation of issues as they
arise from several angles.
DECENTRALIZATION OF AUTHORITY
Some of the changes that need to be made for the transformation of Indonesia from a
centralized autocracy to a decentralized democracy have been implemented quite quickly
(for example, by holding free elections and passing laws that transfer central government
functions to the regions). Other essential changes will take much longer (for example
changing the centralized mind-set of public servants and building the capacity of regions
to cope with their new functions). There is widespread concern about the role of some of
the government officials who are currently responsible for implementing regional
autonomy and their relationship with the previous highly centralized government. That
government was characterized by widespread practices of corruption, collusion and
nepotism. For more than three decades, the government and its administration,
including the army and the police, were more concerned with serving the needs of the
executive branch of government and maintaining their power, rather than serving the
public. There is now a clear need to separate the bureaucracy, the army and the police
from political positions so that they remain neutral.
One important issue that needs to be clarified is the meaning of the term “authority” in
Government Regulation No. 25, 2000 on “Government Authority and Provincial Authority as the Autonomous Government”. Presently, this government regulation reads more like a central government instruction about the duties and responsibilities of the regions rather than a document that grants authority over new functions. According to this regulation, if districts and municipalities lack the capacity to carry out certain functions, their duties are to be surrendered to the provincial government. Although Government Regulation No. 25, 2000 was intended to clarify the process of surrendering functions to the provincial government, many uncertainties regarding this process still remain.
As of September 2001 many regions were still preparing to implement Law No. 22, 1999.
Local governments were still studying the formulation of the powers and functions that
they have been assigned and were preparing the structure of the organizations that will
be placed under their authority. One factor slowing down preparations for
decentralization is the lack of clear supporting regulations and directives from the central
government.5 Therefore, there is a widespread perception in every region that the central
________________________________________________
5 The lack of supporting regulations is typical of the inefficiency of the central government. For instance,
the trial of regional autonomy began 22 years after the law on “Regional Government” (Law No. 5, 1974)
was passed. This law was never fully implemented. According to Suprayoga Hadi (2001) of Bappenas (the
National Development and Planning Board), the District Autonomy Pilot Program (DAPP), which began
in 1996 and was carried out in one kabupaten or municipality in each province, was successful in achieving
the broad stated goals of decentralization. In reality this initiative was stifled because the central
government failed to pass on the required financial resources to match the new responsibilities.
government is still not fully committed to the implementation of regional autonomy.
This is demonstrated by at least three factors. First, the central government has been
slow to issue the regulations that are required to clarify Law No. 22, 1999 and Law No.
25, 1999. Second, the regions consider the central government to be inconsistent in the
implementation of these laws since several authorities originally granted to the regions
have been revoked.6 Third, the central government has been seen as reactive in the way
it has ratified several regulations. For example, Government Regulation No. 20, 2001,
concerning “Supervision and Control of the Performance of Local Governments” was
issued after there were cases of provincial governments being ignored by kabupaten and
kota governments. These factors have created an environment of uncertainty for local
governments as they prepare to implement regional autonomy.
Restructuring Government Organizations
Restructuring the institutional framework of local government (the organizational
hierarchy of government departments) was one of the essential steps undertaken to
prepare for the implementation of decentralization. In total, 239 provincial-level offices
of the central government (kanwil), 3,933 district-level offices of the central government
(kandep), and 16,180 technical units (UPT) of the central government have been
handed over to provinces, districts, and municipalities (GTZ Decentralization News,
March 2001). The amalgamation of certain offices in the central government hierarchy
has resulted in the formation of both technical offices and other autonomous agencies.
The regional governments have tried to downsize the government structure as efficiently
as possible in accordance with the principle of “rich in function, poor in structure (kaya
fungsi, miskin struktur)”. In theory, this requires a significant reduction in the present
number of public servants. Regional governments have always tended to avoid the
difficulties caused by retrenching civil servants. As a result, many district and municipal
governments have had to maintain unnecessarily large administrative structures (Table
2).7 The provincial governments have also tended to remain large, even though their
tasks and responsibilities have been substantially reduced.
________________________________________________
6 For example, Presidential Decree No. 10 concerning “the Implementation of Regional Autonomy in the
Land Sector” contradicts Article 11 of Law No. 22, 1999, which cedes responsibility for land matters to
district and municipal governments. This decree cancels the transfer of land administration to local
governments, whereas in fact many district and municipal governments have already established a Local
Land Administrative Office. Besides land matters, many regions are still not clear about central
government policies on managing areas and functions such as transport, communications, statistics and
family planning.
7 The district of Simalungun, in the province of North Sumatra, was one of the trial areas for regional
autonomy as authorized by Law No. 5, 1974. During this trial the Simalungun district formed 39 work
units. In practice, however, the district faced serious problems because the transfer of authority was not
matched by the transfer of adequate funding by the central government. This experience then forced
Simalungun district to reduce the size of its administration. There is much suspicion about the central
government’s sincerity in implementing decentralization because many regions fear that the current central
government will replicate the bad experiences of the district autonomy pilot program (DAPP). The DAPP
is remembered as more of a burden than an advantage. (see also Footnote No. 5).
In the past it was commonplace for staff to be nominated before institutions were
designed, leading to a less than perfect maximization of human resources. In the future,
however, each regional government must design its own institutions based on the
functions and tasks that are to be performed according to local needs. Therefore local
governments should conduct self-assessment studies in order to determine priorities in
restructuring the local civil service. In addition, there is a need for the government to
consider undertaking a nationally designed policy regarding early retirement to enable
such restructuring to take place.
There is also a continuing debate over whether power should be concentrated at the
provincial level or at the district and municipal level. Many provincial officials doubt the
capacity of district and municipal governments to implement decentralization. They give
the impression that they are still hoping that decentralization will be implemented at the
provincial level and not directly at the district and municipal level. Of major concern is
the fact that there will not be sufficient funds to finance the more than 700 tasks and
functions for which district and municipal governments are now responsible. Therefore,
many provincial-level officials expect that within a year or so many district and municipal governments will surrender some of their responsibilities and functions to the province. It is widely accepted, however, that the central government felt that it was politically undesirable to build strong, self-governing provinces. The reason behind this is that thesemay have become vehicles for stronger regional disintegration, especially in areas likeAceh, Maluku and Papua, where independence movements are already posing a
challenge to the central government.
Despite this, provincial as well as district and municipal governments agree that regional
autonomy should be implemented without delay. Although the regions enthusiastically
supported starting decentralization on the January 1st, 2001, there was also a common
perception that not all the preparations for decentralization needed to be completed by
that date. There appears to be a realistic acceptance by government officials at all levels
that the process of implementing decentralization will be lengthy and that the regional
governments will handle problems as they arise.
The Relationship between Government Levels
At the heart of the implementation of decentralization is the relationship between the
central government and the governments in the regions. If decentralization is to proceed
smoothly the following issues are of primary importance. First, the central government
must continue to demonstrate its commitment to the process now underway and its
willingness to implement Law No 22, 1999 and Law No. 25, 1999. Second, regional
governments need to exercise patience and must be realistic during the implementation
phase of these laws. Third, mechanisms must be found to assist government personnel to
focus their work on public services, instead of merely catering to the needs of their superiors.
Since implementation of the new decentralization laws began, the position of the
province in relation to the district and the municipality has become uncertain. The
district and municipal governments now have a direct reciprocal relationship with the
central government. According to Law No. 22, 1999, each autonomous region is
independent and there is no longer any hierarchical relationship between the provincial
and the district and municipal government. Therefore, in the course of carrying out the
tasks of government, the district and municipality are tending to position themselves as
sub-ordinates of the central government, rather than the province. Some members of
district and municipal representative assemblies (Dewan Perwakilan Rakyat Daerah,
DPRD) even doubt the authority of the provincial assembly in their region. In South
Kalimantan and North Sulawesi local regulations on the same subject have been issued
by both provincial and district assemblies. This suggests the need for a clear set of
guidelines setting out the relationship between the various layers of government.
In the past the “vertical agencies” were the instruments of the central government
carrying out highly centralized government policies in the regions. Many of their tasks
and powers have been now devolved to regional governments. According to Article 8,
section (1) of Law No. 22, 1999, the process of devolving these powers must be
accompanied by the transfer of funding, infrastructure and human resources. The
surrender of infrastructure in the form of land, buildings, and equipment, however,
appears to require further discussion and is awaiting additional arrangements between the
central government and regional governments.
Changing Status of Government Employees
One outcome of the decentralization process is a massive excess of around 2.1 million
central government employees who are being transferred to the regional levels of
government (Koran Tempo, July 14th, 2001), at both the provincial as well as the district
and municipal levels of administration. Approximately half of these government
personnel are school teachers. In many districts and municipalities there are also
provincial-level employees who will be transferred to district and municipal
governments. This transfer tends more to represent a change in status than a physical
transfer because most of these officials are already based in the regions. For example,
following the implementation of decentralization the number of public servants in the
Kudus district in Central Java increased from 1,184 to 8,875 (Table 3). All these
personnel, however, were already based in Kudus, so decentralization has not resulted in
them being physically transferred from, for example, Jakarta to Kudus.
source of funds (Table 5). According to Law No. 25, 1999, the General Allocation of
Funds from the central government (DAU, Dana Alokasi Umum) is to be used by the
local government according to its own priorities. The total amount to be allocated to the
regions under regional autonomy is at least 25% of national domestic revenue (after
excluding the special share to be returned to resource-rich regions); 90% of this amount
is to be allocated to districts and municipalities and the remaining 10% is to go to the
provinces. The total amount of the DAU for all regions for the FY 2001 is Rp60.5
trillion or US$6.1 million.
Despite this lack of fiscal autonomy, there is much enthusiasm for decentralization in the
regions and it appears to be increasing. Such enthusiasm on the part of local
governments has generally resulted in the creation of many more regulations concerning
local taxes and levies but excluding those on income and assets (Saad, 2001). This
tendency has been strengthened by the perception that autonomous local governments
should have the authority to manage and generate revenue. Furthermore, many local
government officials believe that the successful implementation of decentralization will
ultimately depend to a large extent upon their capability to extract local revenues. The
problem is that increases in local taxes and levies, excluding income and assets, have not
been matched by the provision of better services.
The size of the DAU provided for the regions is relatively large. But after central
government employees and more responsibilities for government services have been
transferred down to the regions, most of the allocated budget has been sufficient only to
fund routine local government expenditure. This situation has boosted the desire of
local governments to increase their local revenue, even though in the long term
(consciously or unconsciously) such endeavors will tend to create a negative impact on
the local business climate.
Regional governments, especially at district and municipality level, are aware that they
are still restricted in their capacity to implement regional autonomy. Since local
governments will still continue to depend on the central government, especially for
budgetary assistance, the regions have been trying to increase their income through their
power to raise local revenue based on Law No. 18, 1997 (later revised as Law No. 34,
2000, “Local Taxes and Levies”). The increased enthusiasm of local governments to seek
out new sources of revenue has resulted in community concern, especially in business
circles and among NGOs. There is a fear that regional autonomy will create a new
system of power relationships that will merely result in the transfer of the features of the
New Order system, including corruption from the center to the regions.
PEOPLE AUTONOMY
Ultimately, regional autonomy is not just a matter of regulating the relationships
between the various levels of government, rather it is also about regulating the
relationship between the state and the people. Regional autonomy is essentially the
responsibility of the local population, because it is ultimately the people’s right to
administer their own system of government in a manner that will accommodate their
own laws, ethics and local traditions (Maskun, 1999). According to Law No. 22, 1999,
this is to be ultimately achieved through their representatives in the local parliament by
way of the multi-party system and free elections.
There is widespread agreement that those members elected to the 1999-2004 local
assemblies are the most legitimate of any representatives from the local community
since the 1955 election. This is a reflection of the demand for reform, and also of the
increasing development of democracy in Indonesia, which have resulted in a period of
significant change for these local assemblies. In the recent past the executive branch
of government was powerful and dominant. Now the executive is required to work
with the legislators as equals.
A new paradigm has started to emerge in the regions at the provincial, district and
municipal levels. It is apparent that there has been a significant change in the attitudes
of local assembly members. There are encouraging signs that these local assemblies are
now operating in a more accountable and more democratic fashion than ever before.
They have become more responsive to the aspirations of the local communities, and
have begun to involve themselves directly in clarifying and following up individual
grievances and demands by their local constituents. In addition, open public debates
have begun to flourish. The members of local assemblies have started to use their
position and authority to exercise a degree of control over the performance of local
senior public servants, at the same time becoming more critical of local government
policies. These changes are evidenced by the increasing level and frequency of debates
over policy and legislation.
Unfortunately, these changing attitudes have not always been supported by adequate
technical skills and professionalism. Hence, the voice of the people is not yet being
channeled effectively through its representatives whose capacities are often limited. This
problem is most clearly evident at district and municipal levels, where many members of
the local assembly appear to be lacking in formal education and general political
experience. Of course this is a direct consequence of the democratic process and it also
reflects the educational levels and political sophistication of the wider community. Of
more serious concern is the fact that cases of “money politics” are still frequently reported
in the local and national press and directly involve members of local parliaments.
The Role of Political Parties
The issue of political parties casts a shadow over the personal integrity of individual
members and the moral authority of local assemblies. It is apparent that many of those
who were elected to these bodies do not owe their position to their knowledge of local
affairs or their technical skills. Many were simply proposed as candidates by those parties
that secured a sufficient number of electoral votes. Because the proportional
representation system is used by Indonesia to elect members of both the national and
regional constituent assemblies, the people do not directly elect their local members but
simply vote for political parties.
One additional problem is that parties at the district and municipal level do not always
have sufficient control over their representatives in the local assembly. This is entirely a
consequence of the weaknesses of most political parties at the local level, where party
organization, the development of a strong system of branch membership, and the training
of local cadres remain seriously limited. Since election campaigns are still based on
emotional rather than policy issues, political parties have not yet begun to produce clear
policy platforms for their members to pursue in the assembly.
In addition, the limited time available to prepare for and implement the last election was
not conducive to building sound democratic institutional support systems. If parties
remain weak, particularly at the district and municipal levels, then the quality of the
elected members in the 2004 legislature will continue to be poor. This may in turn
generate a lack of confidence in the ability of local parliamentary members to formulate
public policies and to monitor and control the executive branch of government
effectively. In an attempt to overcome some of these problems, the central government
has recently passed Government Regulation No. 51, 2001 on “Government Funding for
Political Parties”. The funds that have been made available are intended to help political
parties to struggle for their aspirations in social, economic and political life. The details
of the scheme, including how the funds are dispersed and what the money can be
legitimately used for, will be outlined in a decree of the Minister of Home Affairs. Many
informal local leaders, however, have expressed concern that political party
independence will be threatened if they receive funding from the government.
The adoption of a more modern organizational approach by political parties, including
community organizations and interest groups will help to create a stronger democratic
society. Many hope that district and municipal governments will not become “little
kingdoms” of corruption scattered across Indonesia. Regional governments must in the
future devolve some of the public service responsibilities to sub-district and village-level
administrations and even to community organizations as well as interest groups.
While it has not yet become widespread throughout every region, local people are
currently enjoying greater freedom than ever before in controlling both the legislators
and the executive. Representatives of the local community now have the courage to
express their views and to demand that local assemblies recognize and comply with their
aspirations. Nevertheless, there are still formidable barriers preventing interest groups
and community organizations from participating more completely in the public decisionmaking
process. For instance, when the draft of a proposed regional regulation on natural
resources and the environment was submitted by a non-government organization (NGO)
in North Sulawesi, several senior local officials told the SMERU research team that
“there is no arrangement that enables NGOs to draft local government regulations”.
Public Policy and Government Services Analysis
The public service in the regions has operated for far too long without effective controls
or proper accountability. Local assemblies need to exercise control over the activities of
the executive branch of administration. Some members of these local assemblies are
actively giving advice and making criticisms of the local administration, although this is
often interpreted as unwanted intervention or a breach of the local assembly’s authority.
It is also apparent that some members of local assemblies, in their eagerness to exercise
control over the local executive, have sometimes acted in an intolerant and aggressive
manner, or have attempted to interfere in technical matters beyond their competence.
In addition, some legislators have been criticized for their lack of initiative, or for their
failure to scrutinize the details of local legislation before it is ratified.
At the same time, regional assembly members have also been widely accused of ignoring
the interests of their constituents in favor of their own personal ambitions or group
interests. For instance, in many regions the salaries of local parliament members have
been significantly increased, despite the fact that the country is still recovering from the
effects of the 1997-1998 monetary crisis (see Table 6).
Some of the issues outlined above are highlighted in the regional draft budget that
allocates funding. This process of allocating funds to various sectors now depends
entirely on the head of the region, assisted by his or her own senior staff and the local
assembly. Previously, the regions received fixed allocations for various sectors from the
central government. In the absence of a strong, clear vision and mission on the part of
the local executive, civil society groups worry that the process of allocating resources
will pose a threat to the improvement of public policy. Many people in the regions are
concerned that too many corrupt local bureaucrats are still involved in decisions about
the allocation of sectoral funding. If, for example, the allocation for the routine budget,
which covers all matters related to the running of the bureaucracy, is given greater
priority, there will inevitably be a reduction in the budget for such sectors as health and
education. For example, in the draft 2001 regional budget in North Sulawesi and
Gorontalo, no funding is allocated for school operations. As a result, school principals
have been forced to collect funds directly from the parents of students. If such
procedures become the norm under regional autonomy, especially in poor areas, then
the supposed objectives of raising the standard of public services and improving access
will not be achieved.
Many of those in leadership positions in local assemblies are fully aware of the problems
they are facing. Some practical steps are already underway in certain regions both to
improve the skills of local assembly members and also to give them a more
comprehensive understanding of their rights, duties, and responsibilities as
representatives of the local community. The local assembly in the Municipality of
Sukabumi, for example, has encouraged its members to attend particular training sessions
and other forms of further education. They are also beginning to accept the need for
special assistance from experienced professionals. In the province of Central Java, there
have been several productive dialogue sessions between the executive branch of
government and local legislators so that each has an appreciation of their respective
tasks. This has been undertaken in conjunction with efforts to improve the formal
education of assembly members. Meanwhile, members of the Banjarmasin municipal
assembly have attended short training courses in Yogyakarta on the practicalities of
constructing regional budgets and drafting public policies.
Nevertheless, an improvement in the technical capacity and general knowledge of the
elected legislators is not the only guarantee needed for the smooth advancement of
democracy throughout the provinces and regions of Indonesia. It is also crucial for the
wider community to become directly involved in exercising independent and transparent
control over the entire system of local government. In this regard, the local press, mass
media, political parties, interest groups and community organizations will all play an
important role in the process of building democratic regional governments.
Although many legitimate concerns have been raised about the risks of regional
autonomy and many problems will need to be overcome as implementation proceeds,
such fears must be balanced against the potential advantages for the entire nation if this
process succeeds. In reality, given the enthusiasm in the regions for greater autonomy,
this process cannot be reversed. It is part of the role of research institutions, academics
and donors in Indonesia to support the process. The entire process should be regarded as
an opportunity as well as a challenge to improve public services. It is important to match
the idealism surrounding what regional autonomy can achieve for Indonesia with the
reality that some regional governments have limited capacity to manage their own
affairs. Some regions will therefore experience a breakdown in the delivery of essential
services, and consequently the benefits of autonomy may not be felt for some time.
In the long term, the authority to provide public services, which has in the past been
controlled by the executive branch of the government, should gradually be handed over
to the community (see Box 1). Therefore, each of the public service departments should
allow for recipients to develop their own ideas and provide input into how services
should be provided. Public service departments must become increasingly responsive to
community demands. In the Municipality of Banjarmasin several public service tasks, for
example garbage collection and advertising space, will be handed over to private firms to
manage. In Sukabumi the task of managing elementary schools will be transferred to
school boards, which must be established by teachers and parents (see Box 2). In the
District of Minahasa it has been proposed that community organizations and interest
groups be permitted to operate schools throughout the whole of a sub-district or village.
Box 1
Cooperation between an Islamic Boarding School,
the Local Government and the Community to Develop Segenter Village (A Success Story)
Nurul Hakim Boarding School (Pesantren) is one of 200 pesantren in West Nusa Tenggara. This school has
around 2,400 students from the provinces of West and East Nusa Tenggara, Bali, South Sulawesi, South
and West Sumatra and Riau. The school has been cooperating actively with the local government in
supporting the Sasak people of Segenter village to develop their community. Villagers maintain their
traditional Sasak houses and keep their village clean. Several years ago the students of Nurul Hakim
Boarding School worked with Segenter villagers to build a 7 km long clean water pipeline. The local
government then built a 10 km road to connect Segenter village to the main road.
Subsequently many tourists have come to Segenter to see the traditional houses. In 1997 a Dutch tourist
visited Segenter and gave Rp 25 million to the villagers to build a school, now named the De Koning
School. In 1998 a rich Arabian contributed funds to build a mosque.
The Nurul Hakim Boarding School designs programs to send a group of its students to several poor villages
in West Nusa Tenggara in order to live and work with the villagers. The concept behind the program is
that the presence of the students will allow villagers to increase their awareness of the benefits of
community action.
Source: SMERU, July 2000.
Box 2
School Autonomy Trial
SD Dewi Sartika Cipta Bina Mandiri is a primary school in West Java with 270 students. It is one of six
state primary schools that merged in April 2000 in an effort to make teaching more effective and
efficient. This merger was designed by a team made up of staff from the Sukabumi Municipal Education
and Culture Office, the Central Government Departmental Office for Home Affairs at municipal-level,
the Sukabumi Municipal Health Office and the Indonesian Teachers Association. All teachers in
Sukabumi Municipal were eligible to apply for positions at the school and teachers were appointed on
the basis of a competency test. Those who had been teaching at the six schools before the merger, if not
selected, were relocated to other schools.
The autonomy is part of a program known as School Based Management (SBM). It includes granting
schools authority over matters such as classes and timetable, selection of curriculum content and text
books, student affairs, and school maintainance.
A School Committee, made up of teachers and parents of students, monitors how education is being
delivered and helps to raise supplementary funds. In the future the appointment of teachers and the school
principal will be planned and carried out by the School Committee. The Committee and the teaching staff
are committed to the mission of the school, which is to encourage spiritual and intellectual development,
healthy lifestyle practices, creativity and independence. In the near future the Municipality of Sukabumi
plans to open a trial primary school such as this in every sub-district.
Source: SMERU, June 2000
Members of the community should be recognized as citizens who are entitled to a
satisfactory level of public services. They must be given the chance to participate in
key decisions and also to manage and fulfill the needs of the community. Public service
output, for instance, should be a source of local satisfaction and pride. These elements
are as important as material gain. They can be achieved in the future only if
governments put people in the front line of public services. Government officials will,
however, have to delegate some of their powers to the local community. The ideal
approach to the problems posed by the need to improve public services is characterized
by a relationship between government officials and the wider community whereby
officials act as the catalysts and a portion of the decision-making process is
decentralized. Such an approach will help to reduce the burden on government,
especially at a time when budgets are limited and the capacity of government to fulfill
the needs of the public are being questioned. Basically, the less involved government is
in the provision of public services the better.
As yet, there is no clear model of the direction that public policy formulation should take
in the regions. Many believe that there have been few changes to the provision of public
services due to the following factors. First, there has been a sudden redesign of
government policy based on the transfer of a large number of central government powers
to the kabupaten and kota governments. Consequently, the regions have not had
sufficient opportunity to prepare the detailed guidelines needed to implement their new
powers. Second, these policy changes are also based on a review of the relationship
between the executive and the legislature, resulting from the reform movement. At
present, the members of the DPRD believe they can execute more power, which is most
evident in their intervention in the affairs and authority of the executive. Third, as yet
there are no clear processes or mechanisms that can be used by the legislative and
executive bodies to capture community interests. While the legislature believes it always
acts in the best interests of the community, in reality the general election is based on face
value rather than the competencies of the candidates, resulting in party interests being
prioritized over the interests of the voters. Fourth, the processes used by the executive to
formulate public policy are not transparent, nor are they publicized for the community,
because of the unclear mechanisms used to formulate policy and local officials’ lack of
preparation to accommodate the interests of the community.
THE REVISION OF LAW NO. 22, 1999
Although it is not absolutely clear just which aspects of regional autonomy will be
revised, several groups consider the step to be premature. These groups are also of the
opinion that the reasons given for the revision of the law tend to be anecdotal. For
example, a number of Bupati and Walikota have been “accused” of being unprepared for
their placement under the coordination of the Governor. According to media accounts,
these accusations surfaced after several in a number of regions did not attend some of the
coordination meetings put on by the Governor, but appointed a representative to attend
on their behalf. For instance, Bupati or Walikota appointed the Regional Secretary, the
Chairperson of the Regional Development Planning Agency or another one of their
official staff to attend the meetings.
In explaining this matter, it is important to know exactly which aspects of the
government administration will be coordinated by a Governor. Supposing that the
Governor is to hold a coordination meeting about the construction of roads, it would
seem that the head of the local office for Public Works would be more competent to
attend. In fact, in such cases, the Governor should not need to hold the meeting at all as
the Provincial Public Works Office would be quite capable of carrying out the task. In
other words, decentralization does not always have to be interpreted as the delegation of
authority between only the heads of all government levels, but it also needs to include
the delegation of authority amongst certain technical offices.
Another reason given for the revision of Law No. 22, 1999 relates to the performance of
local representative assemblies. An explanation of their performance has been briefly
explained earlier in the paper. Basically, the local representative assemblies have often
been considered to act outside of their given authority, taking measures which seem to
focus on their supervisory roles rather than their legislative and budgetary roles. For
example, a number of local assemblies have formulated local regulations which
contravene to regulations set at a higher level, impede the community’s economic
opportunities and, in allocating local budgets, prioritize their own interests rather than
the interests of the wider community. Therefore the question needing to be addressed is
whether revisions to this law will overcome of these issues? Furthermore, it needs to be
ascertained as to whether the House of Representatives Council and the central
government, that will make the revisions, actually have the same objectives? If the
central government in particular genuinely wishes to improve the current state of
regional autonomy, they need to do more than just revise the laws.
Irrespective of the problems which have accompanied the implementation of regional
autonomy and decentralization, several groups deem the central government’s eagerness
to revise Law No. 22, 1999 as also based on political assumptions. This is the case with
the present government administration, prioritizing national unity as the key to the
creation of a sound government, while interpreting regional autonomy as only a
secondary issue. This line of argument implicitly suggests that the concept of regional
autonomy has the potential to manifest national disintegration. If with this in mind, it
would imply that the present government administration prefers a centralized system to a
decentralized system of government.
In actual fact, this paradigm of pluralism which is being followed by the present
government administration is the antithesis of the paradigm which was characterized by
uniformity, oneness and centrality that failed under past government administrations.
How is it possible for the government to re-adopt a system of government, which has
been proven to be unsuccessful in the past? It would be more practical for the central
government to fulfil their responsibility to establish clear and comprehensive
“foundations for the implementation of regional autonomy and decentralization”, rather
than focussing on preparations to revise Law No. 22, 1999.
In terms of unity, the revision of uniformity has been applied until now throughout all
regions of Indonesia. Unity has been the main priority for the nation, in particular driven by
those in power. In turn, this has caused groups with political influence to pursue an approach
to government based on stability, in an effort to guarantee the unity and livelihood of the
nation. Unity in Indonesia should no longer be based on the desires of those groups with
political influence or the state, but the real desires of the Indonesian people.
It is almost impossible to create national unity by forcing existing differences to become
similarities. The differences need to be given the opportunity to emerge, and then the
community will feel the need for national unity. In this context, the state (government)
must act as both an “umbrella” and a facilitator in order to accommodate these
differences. This umbrella is already in place: namely, the decentralized Republic of
Indonesia, with the support of the people autonomy.
Regional autonomy will ultimately fail if local governments become entrenched as
autocratic, centralized administrations in the regions. To avoid this, local governments
must democratize their operations, increase transparency and allow a greater level of
control by the public. One important example of how this should occur concerns the
planning of local budgets. This process must be responsive to local conditions,
transparent, accessible to the public, and inclusive of all legitimate interests. Without
such a process, decentralization runs the risk of re-establishing in the regions some of the
worst features of centralized Indonesia’s autocratic and corrupt style of government.
SOME IDEAS FOR POLICY DIRECTIONS
1. While the threat of social unrest should not be ignored, an even greater danger will
emerge if the present opportunity to promote regional autonomy is denied. It is
apparent that decentralization has been the desire of local governments and many
communities for decades. Indonesia is at present in the initial stages of a long
implementation process but because of heightened expectations and the eagerness for
autonomy in the regions, the process has reached the point of no return.
2. As yet, there are no clear procedures for decentralization of the eleven service sectors
that are within the authority of district and municipality governments. It needs to be
clearly understood that the regions have not been given “sovereignty” over the
management of these eleven decentralized sectors. Rather, the regions have been
given a mandate in the form of implementation authority, since the focus of regional
autonomy policy, as outlined by Law No. 22, 1999, is the maintenance of the unitary
state of the Republic of Indonesia. One way of clarifying the relationship between
the various levels of government, in terms of their respective powers, is to combine
the concept of the division of service tasks by sector and the division of basic
management functions as outlined in Figure 2.
The managerial functions of government administration consist of the formulation of
public policy, planning and implementation, as well as supervision and control. The
decentralization of these functions to the regions must also be managed. In a dynamic
sense there should be general agreement that two of these functions --authority over
the formulation of public policy and supervision and monitoring of the delivery of
government services-- should largely be controlled by the central government. The
central government can delegate some aspects of these two functions to the
provincial governments as its representatives in the regions. At the same time, the
most significant proportion of the planning and implementation functions should be
under the authority of the autonomous regional governments. The provinces, as
autonomous regions, need to be given more extensive authority over planning
compared to than given kabupaten and kota governments.
Nation-wide agreement about the division of these management functions has the
potential to form the basis of national unity in that it can provide the greatest
possible scope for the harmonious implementation of regional autonomy.
3. The SMERU research team found that the formulation of the fiscal balance
between the central and regional governments has been widely criticized in the
regions. A particular point of contention is the profit-sharing arrangements
outlined in Law No. 25, 1999, which accommodates only a limited number of
natural resources such as oil, natural gas and forests. In the plantations sector, as
in the case of the plantation industries in the Province of North Sumatra, the
areas that are now being used for plantations were originally forest land, and the
related industries constitute a large source of national revenue. Yet these factors
have not been taken into account by this law.
In addition, those regions with established industries that make a significant
contribution to state revenue, such as the tobacco industry in Kabupaten Kudus, do
not receive a share of the profits despite the fact that the natural resources upon
which the industries are based lie within their territory. As a result, these regions feel
that they have been treated unfairly by regional autonomy laws. Consequently, a new
formula to calculate fiscal equalization between the center and the regions should be
considered. Those sectors contributing significantly to state revenue need to be
explicitly included in the formula for allocation of funding to each region.
4. Regional autonomy policy regulates not only the relationship between the various
levels of government but also the practical relationship between the government
and the people. Ultimately, it is the right of the people to manage organization of
their local government. According to the Indonesian constitution, this is carried
out through local representative assemblies (DPRD), largely elected through
political party representation. Although the practice is not yet uniform throughout
Indonesia, people are now beginning to exercise their freedom to monitor the
performance of the government, including their elected representatives in the local
legislature. Further development of political parties, community organizations
(such as Nahdatul Ulama and Muhammadiyah), interest groups (such as the
Chamber of Commerce and Industry, and the Indonesian Journalists’ Association),
and NGOs, will strengthen the foundations of regional autonomy as well as
democracy in general. The government must endeavor to build cooperation with
these organizations, at the same time avoiding the coercive and cooptive practices
of the past. In this regard Government Regulation No. 51, 2001 (“Financial
Assistance for Political Parties”) is one of the positive steps that has been taken to
improve the present condition of political parties in Indonesia.
Strong, competent regional governments, based on a policy of decentralization and
greater autonomy, are fundamental requirements for a country as diverse as
Indonesia with a population of over 203 million that consists of so many diverse
religious, ethnic and socio-cultural elements. It is possible that implementation of
regional autonomy may create unrest in some parts of the country in the short to
medium term. In the long run, however, these reforms have the potential to create
economic, social, and political stability and to bring peace and security to the
people of Indonesia.
5. Regional autonomy laws should not be treated as inflexible and immune to change.
There are many weaknesses in the legislation that can be amended through
Government Regulations. In terms of the process, central government institutions
should not be regarded as having a monopoly over the power to change these laws.
The hierarchical chain of command, commonly attributed to the centralized
government system, must be abandoned and a democratic approach that provides
enough scope for regional government and community participation should be
applied to the process of legislative change. In fact, central government institutions
that have the responsibility to revise the legislation should actively take into
account regional opinions and community demands.
6. Implementation of regional autonomy must include the involvement of a wider
circle of participants outside the boundary of government and the bureaucracy. The
responsibility of local communities in each autonomous region must also be taken
into account, so that government and the community share responsibility for the
successful implementation of regional autonomy. This implies that the
implementation of regional autonomy will be a long-term process, which must be
widely understood not only by local governments but also by civil society.
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