Autonomy: What Jakarta giveth, Jakarta taketh away

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.