Does regional autonomy better the people's lot?<\/p>\n
By P. Agung Pambudhi<\/p>\n
Any attempt to evaluate the implementation of regional autonomy
\nfaces extreme difficulties because of two reasons. First, the
\nimplementation of regional autonomy has been going on only for
\ntwo years so that empirical evidence is relatively limited.
\nSecondly, the implementation of regional autonomy must be put to
\na test both in conceptual, philosophical, judicial, governmental
\ninstitutional aspects and in political, economic, social and
\ncultural realms in relation to various groups.
\nIn the economic sector, the broad-based authority vested in a
\nregional administration by virtue of Law No. 22\/1999 should be
\nconstrued as an opportunity for the local political elite to
\nimprove the access of their people to the economic sector.
\nBut this situation can be attained only if there is a conducive
\nbusiness climate, and it is only possible if autonomous regions
\ncan compete effectively with both other autonomous regions and
\nthe regions in other countries in an unavoidable global market
\nsystem.
\nUnfortunately, quite a few autonomous regions have yet to put
\ntheir house in order. Instead of facilitating business
\nactivities, they seem to be vying to apply regional policies
\ndiscouraging progress in the business field.
\nA study by the Monitoring Committee of Regional Autonomy
\nImplementation (KPPOD) on regional taxes and levies set forth in
\nregional regulations shows this reality. In terms of principles
\nand substance, over 30 percent of a total of 693 regional
\nregulations under analysis reveal the lack of sensitivity on the
\npart of the regions with respect to the creation of a conducive
\nbusiness atmosphere.
\nAmid the regional cooperation that Indonesia has been actively
\nforging to create a larger market with reduced trade tariffs,
\nthere are regional regulations that stipulate trade tariff and
\nnon-tariff barriers domestically. This is but one of the examples
\nof how regional regulations can create distortion in the business
\nrealm in terms of principles as referred to earlier.
\nIn concrete terms, these tariff barriers take the form of the
\nimposition of certain tariffs on units of goods that leave or
\nenter a particular region. In the meantime, non-tariff barriers
\nmay be manifested as compulsory inspection of traded commodities
\nor compulsory certificates of the regions of origin of the
\ncommodities, an obligation that hampers the smooth flow of trade
\ndistribution.
\nAnother example of problem of principle posed by some regional
\nregulations is the imposition of levies on objects that the
\ncentral government has subjected to similar levies.
\nMatters of substantial importance related to these levies are
\nconcerned with the absence of connection between the goal claimed
\nin the regional regulations and the content of the articles.
\nTake a regional regulation on environmental protection, for
\nexample: While the goal is clearly the protection of the
\nenvironment, the articles of the regulation only spells out
\nlevies to be imposed on the trading of waste. There is no mention
\nat all about how the environment must be kept free from hazardous
\nwaste.
\nBesides, the definition of the object of the levies is usually
\nunclear, therefore allowing broad interpretation.
\nThere are also problems related to judicial and technical
\naspects. Although these problems may not harm business
\nactivities, they may lead to confusion. A regional regulation,
\nfor example, may use a formal judicial consideration that no
\nlonger legally prevails. In other examples, the legal foundation
\nused is not relevant to what a particular regulation is about or,
\nin other cases, a regional regulation fails to fulfill the
\nstructural requirement for legal drafting
\nMeanwhile, in connection with the relationship between the
\ncentral government and regional administrations, it is important
\nto note that clarity is lacking, leading to a tug-of-war of
\nsorts, in authority over certain business areas. Business circles
\nare complaining about the locus or the level position of policy
\nmakers regarding processing of permits on land affairs, forestry
\nand other realms owing to the ever-present lack of clarity.
\nIn the land affairs, for example, despite the stipulation in
\nArticle 7a of Law No. 22\/99 that these affairs fall within the
\nauthority delegated to regional administrations or that they are
\neven matters that are compulsory for regional administration to
\ntake care of (by virtue of Article 11), the central government,
\nby virtue of Presidential Decree No. 10\/2000, had taken it back
\nand returned it to the National Land Agency (BPN), whose offices
\nin the regions are apparently vertical government agencies
\nsubordinated to the central government.
\nIn the forestry area, for example, with the issuance of Law No.
\n41\/1999, as well as government regulations Nos. 34 and 35\/2002,
\nthe central government again takes over the authority of
\nprocessing permits authorizing forest management.
\nThe bill on investment prepared by the Investment Coordinating
\nBoard clearly stipulates that in the case of foreign investment,
\nautonomous regions at the regency\/municipality and provincial
\nlevels do not have any licensing authority.
\nThere is fear, therefore, that this situation will lead to sharp
\nconflicts between the central government and regional
\nadministration as Law No. 22\/999 clearly stipulates that
\nindustrial and trade undertakings as well as investment fall
\nwithin the authority of regencies\/municipalities.
\nThese uncertainties may unnecessarily increase the cost of
\neconomy and erode the competitiveness of products in the domestic
\nand international markets.
\nAt the same time, this will lead to greater uncertainties and
\neventually the opportunity cost will exceed the levies imposed.
\nWorld-class industrial players, as well as, understandably, the
\nlocal industrialists, will feel highly uncomfortable with these
\n\"minor\" or major disturbances because, once these uncertainties
\nare tolerated, greater uncertainties will ensue.
\n However, not all regions apply such distorting policies.
\nIn some regions, the policies are relatively conducive to
\nbusiness activities. These regions have taken matters in hand
\nwith a view to \"selling\" their economic potential to domestic and
\nforeign investors. Information about the potential is presented
\nin regional digests in great detail or through dedicated Internet
\nwebsites. Some other regions have set up an integrated service
\nunit authorized to issue investment permits.
\nThese favorable steps should encourage investors to invest in
\nthese regions but, unfortunately, there are investors that still
\nhave an unfavorable perception of autonomous regions with the
\nresult that the overall Indonesia's investment atmosphere will
\nalso be unfavorably perceived.
\nThus, some examples of excellent practices by autonomous regions
\nto facilitate business activities have been summarily ignored. In
\nshort, to date investors are still reluctant to invest in regions
\nbecause, even in this era of regional autonomy, the perception
\nthat the regions are uncooperative still persists.
\nThe aforementioned problems have come about essentially because
\nof a number of factors, including the lack of preparedness on the
\npart of human resources and the weak commitment of the powers
\nthat be. The government's erroneous understanding of a legal
\nproduct, the lack of a comprehensive understanding of the
\nbusiness and investment sectors and similar disregard for
\ncreativeness in bringing about a conducive business atmosphere
\nadvantageous to the locals show the lack of preparedness of human
\nresources in implementing regional autonomy.
\nAt present, there are quite a lot of elements in the business
\nsector, particularly large corporations, that do not understand
\npublic policies. This fact should encourage the executives and
\nthe legislators in the region to continue to keep abreast with
\nthe latest developments in their areas because they have to be
\nleaders of the community, including business people.
\nIn terms of governmental management, the lax enforcement of
\nregional regulations that, in principle, were required shows a
\nweak spot in the mechanism of policy drafting. This weakness will
\nreveal itself later when the policy is enforced and in its
\nrelationship with the central government. Both government and
\nsocial institutions have yet to be able to create a mechanism to
\nprevent the occurrence of these weaknesses.
\nOn the other hand, the central government must show its firmness
\nin relation to poorly drafted regional policies and in building
\nup the region's institutional capacity. Meanwhile, in terms of
\nlegislation, there are some conflicts of principles among legal
\nproducts at the central government level, for example between the
\nregional autonomy law and laws in certain sectors or between laws
\nand government regulations.
\nAnother factor usually voiced in the regions is the small portion
\nof funds that a region gets from the central government. This may
\nbe considered as the main reason why regional administrations
\nissue policies that distort business activities. A closer look at
\nthese policies show that they are more in favor of boosting
\nregionally generated revenues than improving the quality of
\nservices. In fact, regionally generated revenues can be boosted
\nthrough the strategy of luring investors to the regions.
\nWhat a region will have from investment will be much bigger than
\nthe portion of funds from taxes that the central government
\ndistributes. The trouble is that a systematic effort takes a long
\ntime before the result is visible while a five-year cycle of
\nleadership often requires a more instant result although this has
\nto be paid dearly at the expense of long-term interests.
\nIdentification of a number of the causes of these problems has
\nprompted us to focus efforts on several things. First, in the
\nshort term it is necessary to develop something like a center of
\nresources in each region as the partner of a regional
\nadministration in determining the strategic direction of regional
\ndevelopment. This is important given that the capacity of human
\nresources in regional administrations, particularly in the
\nlegislative sector, will, for some time to come, remain as it is
\nnow.
\nWhat must be observed in this optimizing of resources is the
\nlikelihood of cooptation of these resources by the power that be.
\nSecond, the central government must play its repressive and firm
\nrole in regard to distortion-generating regional policies to
\nensure legal certainties within the Unitary State of the Republic
\nof Indonesia, and, also, improve the welfare of the locals.
\nIf these two things can be well implemented, the potential of
\neconomic access development in favor of local residents may be
\ntapped. The third thing to do is intensive popularization of good
\npractices in governance as an incentive for the regions
\nconcerned. In this way, other regions will also be encouraged to
\ndo likewise. The fourth thing is that our legislation direction
\nmust be geared towards the synchronization between Law No. 22\/99
\nand various relevant laws in certain sectors and other
\nregulations\/decisions spelling out this matter
\nIn the meantime, in the mid term, it is necessary to resort to
\nalternative ways to improve regional revenue resources so that
\nthe fiscal capacity of the regions may be reinforced. In the mid
\nand long terms, inter-regional cooperation may be expected to
\ntake place. This cooperation in the economic sector will be
\nmutually beneficial in regard to proper economy of scales and
\ncross-border movement of economic potential.
\nAlong with the items in this agenda for the regions, every region
\nmust strengthen its civil society to create a good mechanism of
\nchecks and balances to minimize all forms of irregular exercise
\nof authority in terms of both regional policies and
\nadministrative practices. Full responsibility, adequate
\nknowledge, organized solidarity among all social forces and mass
\nmedia support will be essential to ensure that this mechanism
\nruns effectively.<\/p>\n
The writer is the executive director of KPPOD.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/does-regional-autonomy-better-the-peoples-lot-1447899208", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }