Concrete formula sought for revenue-sharing<\/p>\n
JAKARTA (JP): A noted economist on Wednesday urged the
\ngovernment to formulate a clear-cut formula for the sharing of
\nrevenue with the provinces to quell the growing restlessness in
\nseveral areas over what locals consider economic injustice.<\/p>\n
The University of Indonesia's Feisal Basri, who is also
\nsecretary-general of the People's Mandate Party (PAN), said
\nseveral natural resource-rich provinces were determined in their
\ndemands for bigger shares of revenue from the development of
\ntheir assets.<\/p>\n
The country could be torn apart if the central government
\nfails to take concrete measures to address the issue, he warned.<\/p>\n
\"The government should have a sense of urgency. Otherwise, we
\ncould disintegrate,\" Faisal said in a seminar discussing the
\nbills on regional administration and on intergovernmental fiscal
\nbalance between the central government and local administrations.<\/p>\n
The one-day seminar was organized by the Coordinating Body of
\nGraduates of Indonesian Universities.<\/p>\n
Several natural resource-rich provinces, including Aceh and
\nRiau, have increased pressure on the government to fulfill their
\ndemands for greater revenue from the exploitation of their
\nnatural resources.<\/p>\n
Thousands of university students attacked the housing complex
\nof the country's largest private oil and gas company, PT Caltex
\nPacific Indonesia, in Rumbai, Riau, on Tuesday. They demanded
\ntemporary shutdown of its oil production until the central
\ngovernment was willing to meet their demand for a 10 percent
\nshare of the province's oil production.<\/p>\n
Caltex produces more than 50 percent of the country's oil
\noutput of about 1.2 million barrels per day.<\/p>\n
Unrest also is growing in Aceh, home to giant liquefied
\nnatural gas producer PT Arun NGL Co.<\/p>\n
The government collects most revenue from the provinces and
\ndistributes it unilaterally among local administrations, with no
\nconsideration of their respective contributions.<\/p>\n
A clear-cut revenue sharing formula is only available in the
\nmining sector, where the government takes 20 percent of the
\nroyalties paid by mining contractors and provides the rest to
\nlocal administrations.<\/p>\n
Taxes<\/p>\n
Faisal contended that the amount of royalties transferred by
\nthe central government to local administrations was too small,
\nsaying total royalties for all the provinces with major mineral
\nresources were a mere Rp 800 billion (US$93 million) for the
\nfiscal year 1999\/2000.<\/p>\n
He believed the central government should give all the
\nroyalties to the local administrations as compensation for their
\nloss of natural resources.<\/p>\n
Local administrations also should have a share of the revenues
\nfrom value-added tax collected in their areas, he added, with the
\ncentral government only receiving income tax.<\/p>\n
\"I suggest that local administrations gradually take all the
\nreceipts from value added tax within 10 years. The central
\ngovernment should retain only income tax revenue,\" Feisal said.<\/p>\n
Faisal said provision of greater income would boost growth in
\nthe provinces, which in turn would increase the central
\ngovernment's revenues from income tax.<\/p>\n
Speaking at the same seminar, South Sumatra Governor Rosihan
\nArsyad called on the central government to discuss the revenue-
\nsharing issue with all the provinces to curb separatist
\nsentiments.<\/p>\n
He said the central government and mineral-rich provinces
\ncould not settle the issue only among themselves because it could
\nfoment envy among poorer provinces.<\/p>\n
\"South Sumatra is a a natural resource-rich province, but we
\nhave never asked the central government for a percentage of the
\nrevenues from our natural resources because we are aware the
\ncountry's unity could be in danger if all rich provinces try to
\nsolve the problems bilaterally with the central government.\"<\/p>\n
Rosihan said that although the provinces would welcome greater
\nautonomy and larger income to be provided by the central
\ngovernment, most faced a shortage of skilled human resources to
\nbenefit from the policies. (jsk)<\/p>",
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