Autonomy: What Jakarta giveth, Jakarta taketh away

The regional autonomy policy, as embodied in Law No. 22/1999 on regional administration and Law No. 25/1999 on fiscal balance, is a concept Jakarta hastily prepared because it wanted to be seen as sensitive to the demands of reform.

From the tall tree of authoritarianism, as one scholar put it, then-President B.J. Habibie plucked out the fruit of the "decentralization of powers" and imposed it on the country.

Like it or not, regions had to be "ready to adopt regional autonomy policy," said Ryaas Rasyid, the man responsible for the drafting of the policy.

He admitted the government should have worked on the concept for at least two years in advance for it to be effective and not need so much maintenance -- as it does now.

But no. "Jakarta did not want to be seen as moving at a snail's pace," he said.

Rather than loosen autonomy so regions could better manage their affairs, the policy turned out to be a centralization of autonomy, according to Indra J. Piliang, an expert on Indonesia at the Centre for Strategic and International Studies.

The half-baked concept was imposed on the country irrespective of social, economic, political and cultural differences among regions. It offered no care in the absence of supporting legal mechanisms -- and lacked a clear definition as to what truly constituted "autonomy."

The policy was put into place "on a society suffering from hunger and poverty, but with a lot of opportunities," said Piliang. The policy has brought Indonesia "to the point of allowing survival of the fittest.

"Whoever has power, money or knowledge," he continued, "can become the power holders of the region, even if they were once bandits, stupid people, corrupt, or associates of such people."

Indeed, when things went sour, those who agreed to it half- heartedly, including President Megawati Soekarnoputri, who now controls Jakarta, expressed regrets over "autonomy rushing headlong into anarchy."

Citing threats of national disintegration -- something that Habibie and Ryaas cited to justify the autonomy policy in the first place -- she initiated revisions to the laws. So Jakarta is, in effect, taking back what it has given to the regions.

What are Laws 22 and 25/1999?

A small, working group within the Home Affairs Ministry drafted the first law, while the second law reflected a long process of debate between the Ministry of Finance and other government agencies, both at the central and regional levels, which had been continuing since the early 1980s.

In May 1999, one month before the general election, the Soeharto-era House of Representatives passed the two laws.

The legislation was then enacted by Habibie, who took apparent pride in having pushed through the adoption of a large number of laws in a short time -- something most legal experts would consider a recipe for disaster, according to legal expert Gary F. Bell of the National University of Singapore.

"Both laws contained dramatic new policy initiatives which even the most ardent proponents of reform would not have believed possible a year earlier," said a British economist, Anne Booth, in the year 2000.

For instance, Law No. 2/1999 abolishes the old hierarchical system, whereby regency heads (bupati/walikota) were largely, if not totally, held accountable to the central or provincial governments, and could be removed by the governor or the minister of home affairs.

This is a break from the New Order system of government, and may appear very much in the spirit of "reformasi," which blames much of the corruption of the Soeharto era on the very closely centralized system wherein the president and a few ministers made most of the key decisions affecting the country.

Also gone is the system by which regional officials were totally subordinate to the center.

In fact, even Megawati has called some regents as outright "rebelling" against the old regional center of power, namely governors who expressed their discomfort at the new arrangement to her.

As in the past, governors are still elected and held accountable to the president; unlike the past, however, they are no longer able to lord over regents now elected by the local legislative councils. Experts, including Herbert Feith, said that, rather than empowering the regions, the laws now "dis- empower" the provinces.

The main provisions of Law 22 on regional government are: * The abolition of the hierarchical relationship between the central government, provinces (daerah tingkat satu) and regencies (daerah tingkat dua, kabupaten/kotamadya). * Regional heads (kepala daerah) at both the provincial and regency levels are elected by regional legislative bodies and held accountable to the body, rather than to higher levels of government.

While governors continue to represent the central government in the regions, regency heads (bupati/walikota) no longer act as representatives of the central government, and are the only ones accountable to the local parliament and local electorate. * The central government retains responsibility on international relations, defense, justice, monetary and fiscal affairs, and religious affairs. In addition, it retains overall control over national economic planning, national administration, high technology and human resource development policies, and natural resource conservation. * Regencies (daerah tingkat dua, kabupaten/kotamadya) now are responsible for the implementation of programs in the following sectors: public works, health, education and culture, agriculture, communications, industry and trade, investment, environmental and land use affairs, cooperatives and labor. * Regions that cannot carry out the functions devolved to them could amalgamate with other regions; in addition, provinces might carry out functions which regencies are unable to perform.

The main provisions of Law 25 are: * The abolition of the central government grants to the regions (province, regency and village) from both the routine and the development budgets. The scheme has been replaced by "equalization grants" (dana perimbangan) which comprise a general allocation (dana alokasi umum), a special allocation (dana alokasi khusus), receipts from land and building taxes (pajak bumi dan bangunan), land and building titles administration fees (Bea Perolehan Hak atas Tanah dan Bangunan) while sharing the revenue from natural resource exploitation. * The general allocation amounts to at least 25 percent of central government's domestic revenue as determined in the annual state budget (APBN). The provinces are entitled to ten percent of this allocation, while the remaining 90 percent goes to the regions. There is, however, a provision for a change in this division if provinces are forced to take over some expenses from the regencies. * The special allocation is made from the central budget to elected regions, based on their special development needs. * Regions are entitled to 15 percent of revenue from oil exploration carried out within their borders and 30 percent from natural gas exploration. They will receive 80 percent of government revenue from mining (other than oil and gas), forestry and fisheries. * Regions may, with the permission of the regional people's representatives, borrow domestically to finance a part of the budget (how much is not specified) but may only borrow from overseas sources through the central government. * Regional heads are responsible, in all financial matters, to regional legislative councils that must approve budgets and receive full reports on budget implementation from the relevant officials.

What supporting mechanism has been established to facilitate the implementation of these laws? Habibie established in July 1999 a team to coordinate the implementation of the laws headed by the state minister of development monitoring and civil servants reform.

Ministers of home affairs and finance were the deputy chiefs, while members included the head of state administration institute (LAN) and the director general of general administration and regional autonomy.

The following president, Abdurrahman Wahid, in April 2000 abolished Habibie's decree and replaced the coordinating team with one that is headed by then state minister of regional autonomy.

The tasks of the team included the formulation of "strategic concepts" based on the implementation of the laws, the setting up of stages and the priorities of implementation, the dissemination of the laws, and the formulation of steps to facilitate implementation.

Wahid also established the Dewan Pertimbangan Otonomi Daerah, or the Advisory Council of Regional Autonomy, headed by the minister of home affairs, and a secretariat whose task is to prepare materials for autonomy policy.

The other supporting mechanism drawn up, so far, included government regulations on the expansion, dissolution and amalgamation of regions, on the election of regency heads, on the authority of provinces as the autonomous regions, and on the management and account of funds.

Shortly after her ascension to power in mid-2001, Megawati initiated the motion to revise the two laws, despite strong protests by regents who have been enjoying the new policy. Governors are certainly the supporters of the revision.

There have yet to be words on how the policy will now fare.