Growth driver or hindrance?
Tommy Firman, Bandung | Thu, 06/10/2010 9:16 AM | Opinion
Jakarta Post
Indonesia’s decentralization reform has resulted in many significant changes in the country’s political and socio-economic conditions. The reform has granted more discretion for local governments to manage regional development according to their own aspirations and potential.
There are cities and regencies that are lucky to have capable mayors and regents, who present excellent leadership. They are able to use new decentralization and policies as a vehicle to improve local and regional economic development and the quality of public service provision in the cities and districts, with more accountable and transparent processes.
That being said, there are also many regencies and cities performing poorly due to a lack of leadership.
Indonesia’s decentralization policy has ended up with sub-national (regencies, cities, and Provinces) fragmentation, in which most of local governments consider themselves as “kingdom of their own authorities”. The reform has unintentionally created “local egoism” which in turn resulted in a fragmentation of local and regional development.
As an implementation of decentralization policy, the regional expansion is expected to improve the socio-economic condition of the region and the provision of public service. The Indonesia ’s territorial-administrative reform has become a highly political issue, in which the original purposes have been largely misused by many local politicians for their own political and economic interests under the jargon of local aspiration.
The reform has resulted in a great demand for many positions and new institutions, including regents and mayors, while the new cities and regencies still receive transfers of funding from the central government as stipulated in the law of Regional Financial Balance, i.e., the block grant of General Allocation Fund (DAU), natural resource shared revenues (DBH) and Special Allocation Fund (DAK).
This practice has been and will be an additional burden to the national budget. At the local level the territorial reform has created disputes, conflicts, and tension among the local governments over the use of resources, assets, and borders, particularly between the newly established districts and municipalities and the parent regions.
Economic growth in the new autonomous regions has greatly fluctuated as opposed to the parent regions and, according to both the National Development Planning Agency and the UNDP, there is still a gap between the new established region and the parent regions
The policy and practice of territorial reform has reinforced local and regional fragmentation. At present, it is almost impossible to establish local government collaboration for local and regional development purposes. On the contrary, the territorial reform does not greatly encourage economic development; help poverty alleviation; improve the quality of public service provision in the new created regions.
The present implementation of territorial-administrative reform in Indonesia appears to be out of control. First, there is a need to temporarily halt the practice, until a comprehensive evaluation has been done, which might result in new scheme, mechanism and criteria for the territorial proliferation.
Second, there is a need how to make regional mergers attractive for local governments to encourage more efficient and effective management of public services provisions.
And finally, there must be incentives for regional merger and for inter-local collaboration, because local and regional development cannot be implemented by one district or municipality alone, without effective partnership with the adjacent local governments.
The 2004 Local Government Law actually permits for both local government proliferation and amalgamation, with objectives to open opportunities for the local region to improve local and regional economic performance and to provide a better quality of public service. Thus far, a merger has never been the case, due to the absence of incentive s and disincentives for it.
A 2007 Government Regulation amended the 2000 regulation regarding local government proliferation. It required there be more stringent criteria for the local government autonomy, but it appears not enough to cope with the growing and uncontrolled local-government proliferation in effective ways.
Should the number of regencies, cities and provinces be limited? The central government has been trying to address this question. However, the basic issue is actually not about a total number as such, but the fact is that most of the new established local governments are not able to improve the provision of public service and local and regional development as expected.
The new autonomous regions must be established on the basis of local and regional economic development prospects in the regions, and not just based mechanistic and stringent criteria as stipulated in the 2007 Government Regulation.
The writer is a professor at School of Architecture , Planning, and Development at the Bandung Institute of Technology.
