Autonomous benefits

Autonomous benefits

There is some good news regarding Indonesia's decentralization
program, which was launched with a big bang in 2001 when the
country was still reeling from the severe 1998 political and
economic crisis.

Most people have seen improvements in the delivery of health
services, education and administrative services in the aftermath
of the regional autonomy laws, according to a governance and
decentralization survey conducted jointly by the World Bank and
Gadjah Mada University in Yogyakarta last year.

Earlier reports described how an increasing number of regional
governments have been taking initiatives to attract investment,
believing that only private investment, and not government, was
capable of creating jobs and generating purchasing power for the
people to fuel economic activity.

All these developments are in sharp contrast to the wide-
spread excesses during the start-up period of regional autonomy,
where most local administrations simply used their new-gained
power as a short-cut to raise local taxes at the expense of the
long-term good of the economy.

During the first year of the decentralization program, many
businesses suddenly found themselves mired in imbroglios as
regional administrations made claims they assumed to be
legitimate according to their new-gained authority.

The survey found that the majority of respondents saw real
improvements in their local public services following
decentralization. Even the police, notorious as being among the
most corrupt public institutions in the nation, were lauded for
their quicker responses to public complaints and improvements in
their general attitudes.

Even though the respondents said transaction costs of public
services remained high -- as evidenced by the continued need to
pay bribes and the high incidence of intermediaries for public
services and continued importance of personal connections -- the
positive public attitude towards regional autonomy could further
improve the confidence in the benefits of decentralization.

This in turn could further encourage local people to exercise
stronger scrutiny of officials and impose higher standards of
accountability on regional executive chiefs. In this context we
should welcome the beginning early this month of the new system
of direct elections for regional leaders, such as governors,
regents and mayors. A system of capable local and provincial
authorities linked effectively with the central government could
go a long way in improving service delivery and promoting
balanced economic growth.

As weak institutions are one of the main problems encountered
by the government, our future development will depend much on the
capacity and performance of local and regional administrations.

More efficient delivery of public services is indeed one of
the main objectives of regional autonomy. The program has
transformed one of the most centralized countries in the world,
and at the same time unleashed local initiatives and innovation
in service delivery.

However, as the survey shows, corruption and inefficiency
continue to threaten higher quality public services, meaning that
decentralization has not yet made much progress in tackling
corruption, high costs and personal connections in public service
delivery that weigh most heavily on the poor.

This is part of a large unfinished agenda, which certainly
will take some time to accomplish. However, as people begin to
benefit directly from the positive impacts of regional autonomy,
there will be stronger support for the process. This in turn will
strengthen a more vibrant civil society at the local level and,
combined with the direct election of regional leaders, will
enhance accountability to the electorate.

Despite the encouraging progress over the past four years,
much still has to be done to strengthen accountability at the
local level.

Foremost among the tasks is the process of decentralizing the
civil service. True, the administrative transfer of civil
servants to local administrations has run well, but the spirit
and letter of the civil service law still emphasizes centralized
service, leaning towards a unified civil service that is
accountable to the central service board in Jakarta, and not to
the regions.

This goes contrary to the decentralization process and could
eventually undermine the regional administration's ability to
deliver public services. The central government and regional
administrations should therefore work together to develop a
system that enhances a more decentralized civil service and yet
at the same time ensures the mobility of civil servants across
regions.