Decentralization remains a delicate issue in Bali

Rita A. Widiadana, The Jakarta Post, Denpasar

In the decentralization era, Bali, like other provinces in Indonesia, has been struggling to fight for the right to manage its own affairs, and financial, human and natural resources so as to improve the living standards of its people.

Even after four years since local autonomy was rolled out in 2001, Bali's seven regencies -- Badung, Gianyar, Tabanan, Klungkung, Karang Asem, Jembrana and Buleleng -- and one municipality -- Denpasar -- are still finding it difficult to implement the law without giving rise to friction, especially as regards the transfer of powers from the central to the provincial government, and from the provincial government to regency/municipality administrations.

Revenue-sharing between the central and local governments, taxation and budgeting, and relations between the legislative and executive branches at the local level remain sensitive issues.

Government officials together with the private sector and local communities on the island still sense a lack of justice and equity in the way in which local autonomy has worked out.

Having been treated as a cash cow for more than 30 years by the central government, Bali is now demanding its fair share of the tourism revenues and taxes that go directly to the central government.

Around 30 percent of Indonesia's annual tourism revenues of US$6.3 billion are generated in Bali. The province has contributed Rp 250 billion (US$25 million) from visa-on-arrival fees since the highly restrictive visa policy was introduced in February 2004.

The total number of tourist arrivals at Bali's Ngurah Rai Airport is second only to Jakarta, yet the province is denied a significant cut of the airport taxes. There are many people in Bali who live in poverty. The island also lacks adequate infrastructure to support the rapid growth in the tourism industry and the rapid pace of urbanization.

In order to help ensure the proper implementation of local autonomy and create a good governance, Udayana University in Denpasar in cooperation with the United States Consulates General in Surabaya and Denpasar, facilitated a meeting involving four visitors from the United States, Bali provincial and regency/municipality officials, experts and councilors over weekend.

Jane E. Norton, Lieutenant Governor of the State of Colorado, shared her experiences of managing her local budget, one third of which comes from the federal government, one third from local taxes and the rest from the state.

"We have applied a decentralization system for more than 200 years, but we are still learning to implement it properly by reforming the budgeting system, policy making, and creating effective strategies to increase the welfare of the community," Norton said.

Priority must be given to activities that benefit the majority of the people, she said.

"Funds must be managed wisely in a clear and transparent way with strong public monitoring to eliminate any possible misuse and budget discrepancies," she added.

Serena Cruz, a county commissioner from Portland, Oregon, warned that in a decentralized system, the central government needed to understand that each region had distinct characteristics.

"We may have an agriculture-based state or an industrial state. Each has its different needs. We should not make a generalization in planning the budget. The local authority should be given more freedom to decide its budget allocation," she said.

"It is quite lucky that in the United States, public and professional involvement has been very strong so that no official would dare to conduct any corrupt actions," she added.

Dr. Nyoman Arya, representing the rector of Udayana University, said that Bali still has a lot to learn.

"Our officials are still fighting each other to get bigger slices of the cake. Corruption is still endemic," he said.

Separately, Ryaas Rasyid, an expert on local autonomy, urged everyone in Bali to fight for the island's fair share.

"Both the provincial and regency/municipal administrations must draw up a feasible design for revenue sharing and propose it directly to the central government," said Rasyid, the former state minister for local autonomy.