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Local autonomy and the dilemma
By Amelia Hapsari

In Balobaloang, Indonesia's turn to local autonomy has not lit the lives of the fishermen with a better hope. When confronted with illegal fishing in Balobaloang, the Regent of Pangkajene Kepulauan (often abbreviated by locals as Pangkep), the leader of a vast archipelagic area, was fast in pointing out the problems of the distribution of power and responsibilities previously held in Jakarta to local governments at provincial, municipal, and district levels. He asserted that the central government was not implementing local autonomy in a full mode. He said that some of the resources and budget that was supposed to be distributed to regencies like Pangkep has not yet been channeled down.

What the Regent did not elaborate were local autonomy critics that saw local governments rose to be little kings after local autonomy gave them more power to decide. Analysts and business investors noticed the upward trend of corruption in the local levels since local autonomy was adopted. As local governments were granted the responsibility to manage natural resources, many public officials pocketed personal profits by taking bribes, exchanging illegal access with money, or other deviant behaviors.

Before the decision to decentralize, Indonesia was under a 32-year authoritarian rule of Suharto, where resource management was always at the hands of the central government in Jakarta, or a small group of Suharto's cronies. The local government had very little control or direct benefit from natural resources in the area. Islands outside Java were largely underdeveloped despite the amount of fiscal they have generated from their rich soil and sea. The centralization of power has created a huge disparity among regions in Indonesia, if not demands for independence from few areas like Aceh and Papua.

The law on regional autonomy (UU No. 22 tahun 1999) and the law on fiscal equalization between center and regions (UU No. 25 tahun 1999) went into effect in January 1st, 2001. In the beginning it was warmly welcome as an attempt to fairly distribute power and revenue to provinces and regions outside Java. Soon after, problems were apparent in its implementation. Angel Rabasa and Peter Chalk mentioned several of those in their report "Indonesia's Transformation and the Stability of Southeast Asia".

Rabasa and Chalk argued that before decentralization took place, Indonesia had not established a necessary "architecture" to support it. Without relying on fiscal revenues from the regions, the central government did not have an effective revenue generating mechanism to pay its debts and to fund national projects. Rabasa and Chalk found that "Decentralization would reduce the imbalance between Jakarta and the regions, but, paradoxically, increase the disparity between the richer and the poorer regions."

Rabasa and Chalk, as well as many case studies on regional autonomy in Indonesia have seen that the local government did not have adequate institutional framework to properly manage resources, revenues, and responsibilities in their area. Laws and regulations as well as supervisory agents from various levels often overlapped or contrasted each other. 32 years of centralized power under Suharto left very little capacity building going in the regions. They argued that it would take longer to have a system of transparent, accountable, and responsible governance in every region in Indonesia.


Indonesia's Transformation and the Stability of Southeast Asia
By Angel Rabasa and Peter Chalk. 2001

Fighting Corruption in Decentralized Indonesia; Case Studies in Handling Local Government Corruption

A World Bank report by Taufik Rinaldi, Marini Purnomo, Dewi Damayanti. May 2007

Regionalism in Post-Suharto Indonesia
Edited by Maribeth Erb, Priyambudi Sulistiyanto, and Carole Faucher. 2005

Political Economy of Local Investment Climate: A Review of the Indonesian Literature

By Arianto A. Patunru and Siti Budi Wardhani. June 2008

Regional autonomy way off track, expert says

The Jakarta Post, March 3rd, 2009

Indonesia's local governments doing little to boost investment climate
By Xinhua News Agency December 1st, 2007

The State of Environment in Asia 2005/2006
Edited by Japan Environmental Council page 116-222 Republic of Indonesia: Environmental Management and Decentralization

Also in this section:
A Nation in Search of Democracy
Destructive Fishing Practices and Indonesian Law
Local Autonomy and the Dilemma
Global Trade and the Impact on Developing Countries
Problems in Indonesian Marine Security




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