Decentralization alternatives vital

Decentralization alternatives vital

By Santo Koesoebjono

THE HAGUE, Netherlands (JP): "We are doing well during this
period of economic crisis. In fact we hope that this situation
will last longer," a government official in Bali said recently.

A senior research fellow of the island's state University
Udayana expressed a similar opinion about the economic progress
of this island. His wife's family, merchants of gold and silver
wares, is doing good business now because the economic
uncertainty usually drives people to invest in precious metals or
property.

The ugly corner has been turned and the economy of the island
is booming, supported by the favorable exchange rate between the
U.S. dollar and the rupiah.

Motorcycles and popular four-wheel-drive Kijangs and Panthers
are purchased and driven, contributing to overcrowding on the
small roads unprepared for huge flows of transportation.

Similar economic growth is also noted on other islands, such
as Sumatra and Sulawesi. The economic crisis had a differential
impact on the economies of different regions, said an economist
from LIPI, the national research institute of Indonesia.

Java may be the hardest hit. The situation on Java dominates
the focus of the economic crisis because of its high percentage
of the population (59 percent of the total population of 202
million), high concentration of manufacturing industries and
services, and because the central government is located there.

This differential welfare gap between the regions may
stimulate the desire for more autonomy and the decentralization
of activities. Political parties should be prepared to meet and
accommodate these demands, otherwise unrest and regional
secession movements will continue to mount. By ignoring the wind
of and need for change, reforms will get out of step with popular
demand.

The political turmoil in May 1998 led to the fall of former
president Soeharto. The harassment of the Chinese ethnic minority
caused an exodus of these non-pribumis (non-indigenous) abroad
and to the more peaceful and safer island of Bali. Estimations
run to around 60,000 to 70,000 pendatang (newcomers) from Jakarta
to Bali since May 1998, although such figures should be
interpreted with care.

This mass influx of members of the middle and well-to-do
classes has had a big impact on the economy of Bali, although in
terms of numbers they represent only a tiny percentage of the
island population of three million people. Prices of properties
in the capital city Denpasar and in the popular resorts of Sanur
and Kuta have skyrocketed. This has influenced the prices of
specific consumer goods and life-styles. Although the situation
in Jakarta has somewhat calmed down, life in this city is still
unsafe.

Newspapers, radio and TV continuously give reports which
confirm this. It has become a topic of discussion among relatives
and friends, noted in warnings to foreign tourists, which makes
foreigners hesitant to visit and invest in Indonesia. Although
many non-pribumis have returned to Jakarta to resume their
businesses, their family members remain abroad or in Bali. This
sudden influx and settlement of the Jakarta elite in Bali, with
their different life-styles, stimulated a demographer at Udayana
University to question the impact on the social, religious and
traditional life on Bali.

A more pungent question is whether the differential effect of
the economic crisis will lead to a growing gap in welfare
between the peoples of the different islands. Moreover, what will
be the consequences on the government and its administrative
structure?

The fall of the autocratic and centralist regime has allowed
the blooming of different types of activities. Diverse business
activities are mushrooming, bypassing government controls.
Businessmen are moving their activities to different regions,
such as Sumatra and Sulawesi, to develop trade directly with
their immediate clients abroad. Palm oil, rubber, cocoa beans,
coffee and copra are some of the commodities finding direct
outlets abroad. This trade results in an inflow of cash for local
producers and businessmen, and rising welfare and consumerism in
the regions. The local populations are doing well during this
period of national economic malaise.

The economic development of different regions may further
increase the sense of economic independence from the central
government, although one wonders whether the present reformasi
clique condones this development. This progress is instrumental
to avoid social and economic unrest in the regions, and it is
also keeping resources flowing in to the advantage of the clique
in power.

However, as politics and economics are good bedfellows, the
rising welfare stimulates the demand for more autonomy for the
regions. Regions will be more assertive, as former minister
Sarwono Kusumaatmadja said recently in an interview with a Dutch
national newspaper.

Decentralization is preferable to an outright split of the
regions. However, we should not fear that these regions will ask
for independence, because it is very unwise to demand
independence knowing the fate of the newly created independent
states after the fall of the Soviet Empire in 1989. Moreover, if
a region really wanted its independence it could have raised the
issue during the period of instability around May 1998. However,
there were no serious indications that this was an issue.

The situation becomes more complicated when the regions ask
for more political, economic, financial and administrative
autonomy from the central government. The demand for more
autonomy is spreading through the country and not limited only to
independence-minded provinces. Regions will ask for a stronger
say in the development of their region, contrary to the
decentralization policy rhetoric of the Soeharto regime which was
merely cosmetic. The regions will also demand equitable
development and a bigger share of the profits generated by local
resources.

Redressing the bitter legacy of 32 years of the Soeharto
regime is a main task of reformasi for the regions. If this
fails, frustrations will increase and social unrest may explode.
Confronted with the demand for decentralization, are political
parties ready to meet this request when they are in power? What
agenda do they have for a diversified economy in a united
Indonesia?

Once this voice for more decentralization becomes stronger it
is infeasible to suppress such a demand. Political turmoil might
create opportunities for basic institutional changes and the
reshuffling of personnel.

The other side of the decentralization coin is whether the
regions are ready to plan, implement, direct and administer
regional development. Do they have the required human resources
and skills to do this?

Decades of being obedient and loyal to the central government,
not allowed to take initiatives and make decisions on their own,
may hinder the achievement of local personnel. These issues were
put forward by local government officials from various provinces
of Indonesia who were attending a training session on
decentralization in the Netherlands one year ago.

Examples can be observed in former communist countries. At
present, most managers and personnel in those countries, although
highly educated, are lacking in managerial skills and
experience, a sense of initiative and the imagination to create
and shape development. Will regions in Indonesia be able to
counter these deficiencies within a short time?

It is therefore pressing to formulate alternatives to the
decentralization of regions which will shape the future of the
country. Scenarios should be developed showing the consequences
of these alternatives in all aspects. They should not remain
merely general plans, but must go into more detailed plans of
action, such as the relation between the central and regional
governments, responsibilities and obligations for national safety
and international relationships, the development of the
infrastructure, human resources and skills and the allocation of
funds.

One also ought to explore the potential competitive advantage
of regions given the differences between the natural resources
and skills of the regions.

In The Jakarta Post, author-philosopher Mangunwijaya once
alluded to the United States of Indonesia in the 21st century. Of
course, this is just one alternative for a more equitable
distribution of wealth. However, let us shift some of the
emphasis from "Tunggal Ika" (one unity) to "Bhinneka"
(plurality).

The writer is an economist-demographer based in the
Netherlands.

Window A: The fall of the autocratic and centralist regime has
allowed the blooming of different types of activities. Diverse
business activities are mushrooming, bypassing government
controls.

Window B: Regions will ask for a stronger say in the
development of their region, contrary to the decentralization
policy rhetoric of the Soeharto regime which was merely
cosmetic.