Consensus vital to support autonomy law<\/p>\n
JAKARTA (JP): Natural resource-rich provinces should be
\nwilling to subsidize poor regions if Indonesia wants to
\nsuccessfully adopt its autonomy law, an expert has said.<\/p>\n
The chief economist at the United Nations Support Facility for
\nIndonesian Recovery, Satish Mishra, said here on Wednesday that
\nthe understanding from the rich provinces would ensure the smooth
\nimplementation of the autonomy law which would take affect in
\n2001.<\/p>\n
\"You must have a social consensus on what it means to stay in
\nIndonesia,\" Mishra said on the sidelines of the seminar called
\n\"The Indonesian Government & Business Investment Forum\" held by
\nStrategic Intelligence.<\/p>\n
He said that cross subsidies were unavoidable in any country
\nin the world in order to protect the poor segments of a nation.
\n\"But rich provinces often ignore such an obligation,\" he added.<\/p>\n
Mishra said that there should be, for example, a national
\nagreement on the flow of revenue from natural resource-rich
\nprovinces to poor ones.<\/p>\n
In response to demands for decentralization, the government
\nissued last April Law No.22\/1999 on Regional Administration and
\nLaw No. 25\/1999 on Intergovernmental Fiscal Balance.<\/p>\n
Both pieces of legislation give regions greater autonomy in
\nmanaging their own affairs, including a greater share of the
\nrevenues they generate.<\/p>\n
Under the intergovernmental fiscal balance law, provinces will
\nget 15 percent of the government's oil revenue, 30 percent of gas
\nreceipts and 80 percent of mining royalties.<\/p>\n
Mishra said the government should not apply the autonomy law,
\nunless it had consulted thoroughly with representatives of each
\nof the regions.<\/p>\n
\"Each side should be involved in detailed bargaining, as in
\nthe end it's all about the distribution of national resources,\"
\nhe said.<\/p>\n
Failure to involve regions in the decentralization process, he
\nsaid, might cause unintended consequences, in which rich regions
\nwould make demands on the central government in return for their
\nneeded commodities.<\/p>\n
The government plans to implement the autonomy law next year,
\nbut some natural resource-rich provinces are demanding that the
\ngovernment speed up the process, saying they are ready for
\nautonomy now.<\/p>\n
According to Mishra, such demands were more due to these
\nprovinces' concern that the government would later backtrack on
\nits promise of autonomy.<\/p>\n
Mishra also said that decentralization created a problem of
\nbalancing resources throughout the country. \"On the one hand you
\nwant to recognize local differences but on the other you want to
\nensure that nobody goes below a certain minimum,\" he added.<\/p>\n
He said that if regions were too defendant on revenue transfer
\nfrom the central government, it would be unrealistic to expect
\nthem to have an independence voice.<\/p>\n
\"However, if you starve them of revenue then they would apply
\nall kinds of informal taxations and local customs,\" he said,
\nadding that this would prevent such regions from offering
\nefficient services to investors.<\/p>\n
He admitted that decentralization would reduce the
\ngovernment's revenue, but added that this depended more on how
\ndecentralization allocated the revenue.<\/p>\n
Furthermore, he said, by allowing rich provinces to attain
\nmore of their revenue, the government should provide them with
\nthe incentive of raising more revenue.<\/p>\n
He said this would enlarge the total pool of revenue for the
\ncentral government, which would partly compensate for the loss of
\nit due to decentralization.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/consensus-vital-to-support-autonomy-law-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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