Indonesia: Toward the Era of Decentralization

Indonesia: Toward the Era of Decentralization

Country-Focused Training Course on Local Government Administration for IndonesiaHiroshima, January 8, 2001

Dadang SolihinDeputy Director for Local Government Apparatus Empowerment-Bappenas

dadang-solihin.blogspot.com 2

Contents

Introduction Central and Local Government The Organization The Main Issues The Policy Strategies Development Programs Priorities Area of Interest


Introduction

The purpose of this report is to provide some understanding regarding the current state of local government in Indonesia to the discussion group.

The report consists of four parts. The first part is introduction. The second part explains about the relation between central

and local governments after decentralization, and to compare the ‘before-and-after’ situation affected by the changes.

The third part explains an outline of the organization to which I belong, and my job.

And the fourth part explains my specific area of interest.


Central and Local Government (1) The Law No. 22 (1999) on Regional Governance, and Law No. 25

(1999) on Fiscal Balance between Central and Regional Governments will change the roles and functions of local government as well as the allocation of development fund to the local level.

The implementation of greater local autonomy will enhance local discretion in spending and in turn require modifications in the approach in the practice of local development planning.

Accordingly, a departure from the established development planning system with its centralized distribution of power and authority is necessary.


Central and Local Government (2)

Planning system reform will mean removing or modifying centralized system and procedures that supported centralism in the past and build on a new decentralized capacity building and decision-making.

Following Law No. 22 (1999) the newly empowered local parliaments together with the local administration will determine policies and objectives of local development.



Development programs in Indonesia have been highly centralized over the past 30 years.

The time is now changing, with more rooms opening up for democratization process, plans for decentralization and regional autonomy, and more intense and active participation from community groups involved in local development programs.



According to the regional government law, decentralization is the delegation of the governance authorities by government to autonomous regions in the context of the unitary state of the Republic of Indonesia.

Moreover, the regional autonomy is the authority of autonomous region to govern and administer the interests of the local people according to its own initiatives based on the people’s aspirations in accordance to the prevailing laws and regulations.



The idea of decentralization and increased local autonomy follow the well-accepted and benign principle of bringing government closer to the people.

The move will make governments more responsive and accountable.

Consequently, increased local legislative and executive power in policy and law making authority could means a proliferation of differing laws and regulations across kabupatens and regions.

Mere differences in laws are not generally matters of concern –except in those areas where laws should be uniform across the country or where local laws interfere with some national interest.


The Organization (1)

I currently work for the Bureau for Local Government Capacity Improvement, under the Deputy Chairman for Regional and Natural Resources Development, National Development Planning Agency (Badan PerencanaanPembangunan Nasional-BAPPENAS).


The Organization (2) The bureau consists of three divisions.

The first is the division for improvement of regional autonomy. This division is responsible for performing study on implementation performance of regional autonomy.

Second, is the division for local government apparatus empowerment that is responsible for preparing material for preparation of policy, plan, and budget of development regarding the capability enhancement of local institution and apparatus, and local legislators (DPRD).

And the other division is the division for regional finance that is responsible for preparing material for formulation of development policy, plan, and budget regarding the improvement of financial performance of local government.


Organization Chart of Directorate for Local Government Capacity Improvement


Director for Local Government Capacity

Improvement

Deputy Director for Improvement of

Regional Autonomy

Deputy Director for Local Government

Apparatus Empowerment

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The Organization (3) My position in the bureau is the head division for Local Government

Apparatus Empowerment. The main functions of this division are:

Preparing material for formulation of development policy, plan and budget regarding the improvement of capability of institution and apparatus of regional government and legislators

Preparation of material for monitoring, evaluation, and reporting as well as suggestion on further action to the implementation of development plan regarding the improvement of capability of institution and apparatus of regional government and legislators


The Organization (4)• One of the missions in order to realize the future vision of the

Indonesian nation is to form regional autonomy in the framework of regional development in line with equality in growth within the umbrella of the Unitary State of the Republic of Indonesia.


The Organization (5) The directions of the regional autonomy improvement policy within

the state policy (GBHN) are:1. Developing regional autonomy that is wide-reaching, evident

and accountable; 2. Carrying out a study or policy concerning validity of regional

autonomy for provinces, regencies/cities and villages; and 3. Realizing fiscal balance between central and regions that is

just by prioritizing regional interest that is wider through decentralization of permits and investment as well as management of resources;

4. Empowering the local legislators in the framework of carrying out the function and role for implementing regional autonomy that is wide reaching, real and accountable.


The Organization (6) With such policy direction, the aim of improving regional autonomy

shall be in order with the effort to improve the capacity of regional government in order to deliver public service in a more effective, efficient, accountable, transparent, and responsive manner.

In reality, regional autonomy is a transfer of governing duty that is accompanied with authority in order to make decision on policies, managing public funds, and regulating activities in the framework of arranging government and public services to the areas of province, regencies/cities, and villages.

Until recently the realization of regional government autonomy was faced with several constraints, either concerning political, economic, socio-cultural aspects as well as other technical aspects.


The Main Issues (1) The limited availability of capable regional human resources and

government apparatus in accordance with the demand in needs both from the quality and the quantity sides in the framework of providing services in accordance with the public demand and aspiration;

The lack of regulatory means in order to increase regional revenues that in the end shall be the cause of the still low capacity of regional government finance in order to finance the implementation of regional government duties and function.


The Main Issues (2) In the framework of improving the role and duty of the Local

Legislators, there is a mismatch between the role and duty that should actually be carried out with the existing organizational capacity, among others are caused by the limited number of experts that can assist in the duties and restrictions in obtaining feedback as well as in analyzing the process of decision making in the Local Legislators that may as a whole affect the effectiveness of the regional autonomy implementation.


The Main Issues (3) Future challenges that is likely be encountered during the

implementation of the regional autonomy are in the preparation of human resources that are professional in public management that covers the policies planning and creating aspect, procedures and organizational system, financial management, implementation and delivery of services, supervision, as well as management of public participation.


The Main Issues (4) As an important prerequisite during the implementation of the

regional autonomy is how to carry out the effort in order to improve revenues or regional revenues either through the balance of funds or through regional owns revenues, together with providing opportunities in finding potential source of revenues and developing regional economic activities.

Furthermore, efforts should be made in order to increase the accountability of the financial management and correct uses of funds in order to support routine activities and public services in accordance with the public demand.


The Main Issues (5) Considering that not all of the regions have the wealth of natural

resources or have adequate financial capability in order to carry out the autonomy duty, the government has to make a policy in order to equalize allocation of funds between the regions that is fair to all.

The challenges in order to improve the role and duty of the regional legislator are how to meet the requirements for experts that can assist institutions, to develop communication and consultation facilities with the public and government parties, to improve the quality of legislation decision making process, and to make effective supervision of the regional government while carrying out their duties.


The Policy Strategies (1)1. Improving the capacity of regional human resources into more

professional in accordance with the regional potential and interest through education, training as well as developing an adequate incentive system.

2. Improving the capacity of the regional government finance through the fiscal balance that is more just and proportional, providing larger authority for the regions to exploit regional sources of revenues, while considering allocation of funds for regions that are poor in natural resources and a backward economy.


The Policy Strategies (2)3. Developing regional government organizational

structure that is modern and is implemented by human resources that have competence in the process of decision making and oriented to a public interest, productivity of public services, protection of poor people, cooperation between government and the public, as well as improving public participation and intention.

4. Improving the role of the local legislators through providing experts that shall assist in the quality improvement of feedback in the framework of legislation decision and a more effective supervision on the government.


Development Programs Priorities (1)

1. Improvement of the local government apparatus, Enhancing the professionalism and managerial capacities of

local government apparatus proportionally in accordance with the demand in order to support the implementation of the autonomy and to create clean and accountable local government.

Improving the availability of professional and qualified local government apparatus that are suitable to the job requirement and responsibilities.

The priority activities that will be implemented included: standardization of job competency; analysis of manpower needs, improvement of reward and punishments system; and training need assessment.



2. Enhancement of local government institution capacity, Enhancing the institution capacity of local government. The

enhancement will covers work mechanism, the organization structure, and the adequate legislation regulations.

The target to be achieved is the creation of organization structure, the high performance of institution, and the establishment of work relationship between organizations within the government environment as well as between government organizations and public organizations, and the creation of good and clean governance.



The priority activities that will be implemented are the study of autonomy and decentralizations, included: the study of dividing, uniting, and removing the autonomous

region; arrangement of regional organization structure that follows

modern organization principles; and development of work relation between organizations within

the government environment either horizontally or vertically, and between the government and the public that shall be interactive and parallel.


Development Programs Priorities (4)3. Arrangement for regional finance management,

Enhancing regional government capacity in managing the sources of revenues in a more efficient, transparent, and responsive manner. The target to be achieved is the ever-increasing significant role of regional original revenues in the implementation financing of the public service and development function.

The priority activities that will be implemented included: the widening and improving of regional revenues sources; simplifying the regulations and straightening out the institutions; developing the financing mechanism and developing accounting system, developing the transparent and accountable financial information, and managerial regional finance.


Development Programs Priorities (5)4. Strengthening people institution.

Enhancing the capability and involvement of formal as well as informal people institution in the process of decision-making, planning, implementation, and monitoring of public service and development.

The purport of people institution included local legislators, village representative body, non-government organization, traditional institution, religion institution, and others civil society institutions.

The target to be achieved is functioned and developed people institution participation mechanism in the process of decision-making, planning, implementation, and the creation of social monitoring mechanism in more democratic manner.



The priority activities that will be implemented included: the capability enhancement in policy analysis, public management, financial management, political communication; the enhancement of communication and consultation with the local people, private company, and local government.


Area of Interest There are three specific areas of interests that I want to acquire from

this training. First, the role and functions of local government bodies. This will include: The roles of prefectures and the significance of their function in coordinating national policy enforcement and municipal village affairs.

Second, the development of human resources. This will include: The rules for public servants’ appointment, personnel affairs, pay structure, and the issues facing the local public servant system in Japan.

Third, the local vitalization plans. This will include: The medium-term plans formulated by prefectures, the planning of basic items concerning major policies, and the actual practice of overall coordination.


どうもありがとうございましたどうもありがとうございました


Terima KasihTerima Kasih

Education

Indonesia: Toward the Era of Decentralization