Disentangling confusions about federalism

By Hans Antlov

JAKARTA (JP): At a seminar a few weeks ago, one of the participants -- a noted member of the House of Representatives -- said the Republic of Indonesia would need to be dismantled if the unitary nation were to become a federation.

Earlier this year, a leading political figure asked whether, in a federated system, a person living in Java would need a passport to go to Maluku. These are just two common misunderstandings about federalism. There are different kinds of misinterpretations of what constitutes a federal state and what kinds of benefits it might bring. Some of these statements reflect a lack of knowledge, while others perhaps indicate fear of constitutional change. It would therefore seem important to disentangle the confusion about federalism.

The unitary principle grounds sovereignty in the nation as a whole. A government representing a unitary nation has the right to delegate powers downward to regional and local institutions, through legislation, but the regions have no right to any of these powers. A unitary state can be highly centralized (like France), or it can be decentralized with a substantial degree of autonomy for provinces or communes (like Britain or the Netherlands). Regardless of the degree of decentralization, it remains a unitary state. The powers held by local and regional organs have been received from above, and can in principle be withdrawn through new central legislation, without any need for consent from the districts or provinces concerned. In practice, however, it may be difficult to recentralize a decentralized, unitary state.

The federal principle divides sovereignty between the constituent states and the federation as a whole. The constitution takes the form of a treaty between a certain number of states which defines the division of powers between the states and the federal level. Importantly, constitutional changes cannot be made unilaterally by the federal government, but have to be accepted by the states. The principle behind a federal constitution is that each state delegates a certain amount of power upward, to the federal government.

In a loose federation (generally termed "confederation") the constituent states may have the right to withdraw the powers they have delegated upwards and resume complete independence.

In a tighter federation this cannot be done unilaterally, but has to be negotiated and accepted by all parties concerned. In confederations, the powers delegated upward are also generally limited (typically defense and foreign policy), while in tightly knit federations, the powers of the federal government can sometimes be even more substantial than in a decentralized unitary state.

According to the Norwegian political scientist Xyvind Xsterud, the difference between a unitary and a federal state is not that one is more decentralized than the other, but that the former is decentralized through legislation whereas the latter is decentralized by constitution. In a federation, certain matters are thus constitutionally devolved to local units, and the central government cannot unilaterally revoke this decentralization, as it can in a unitary state.

If Indonesia were a federal state, like it was during a brief period between 1949 and 1950, only one paragraph of the Constitution of 1945 would need to be changed: "The Indonesian State is a unitary state in the form of a Republic." This is paragraph 1, and the word "unitary state" would need to be replaced with "a federation of states," or something similar. Presumably a constituent assembly would have to meet, with representatives from each of the federated states (formerly provinces), in order to adopt, or reconfirm the revised constitution.

For all practical purposes, Indonesia could remain the same nation, with a joint flag and national anthem, one citizenship, and a single currency and military defense. It would not need to change its name, although it could become the Federal Republic of Indonesia or the United States of Indonesia, if this were seen as desirable. Citizens would certainly not need passports or visas to travel between the states. It is many years since it was necessary to have passports in order to travel within such federal states as India, Malaysia, Australia, Canada, the U.S., or Germany.

The difference between a unitary and a federal state is more subtle. Did anyone notice that Belgium or South Africa a few years ago gave up their unitary status in order to become federations? And do we think it strange that sovereign nations in Europe are willing to delegate some of their powers to the Council of Ministers and the Parliament of the European Union?

In order for Indonesia to become a federation, two steps are necessary. First, the constituent state would need to be formed and to recognize each other. The highest legislative and constitutive bodies in Indonesia would allow provinces or sets of provinces to have their own autonomy and to form new states, with their own rights and duties, independent of (but in cooperation with) the central government. Each new state would need to convene a constituent assembly to decide whether or not it would join the federation and under what conditions. This could be done without dissolving the Republic of Indonesia.

Simultaneously, the relationship between the central (or federal) government in Jakarta and the states would need to be worked out in the form of a treaty. Legally, this could be done through an amendment to the 1945 Constitution. There would need to be negotiations between the states and the federal government concerning the division of powers, defining the limits of regional autonomy and the powers of the federal government.

In the Indonesian case, there would be a number of thorny issues, such as the need to divide Java into several states (no other federation, to my knowledge, has 65 percent of its population in one state), the geographical imbalance of resources, and the lack of a coherent identity within larger units outside of Java (for instance, how many Sikka people in Flores actually feel themselves to be "Nusatenggarese" or "Eastern Indonesians"?).

But let us imagine for a moment that these issues were solved and that the Republic of Indonesia became a federation of states. Would this mean that the nation would overnight become more democratic or more decentralized?

No, not necessarily. The second frequent misconception about federalism, this time heard from its champions, is that it would cure most if not all of Indonesia's social, economic and political ills. Such is not the case. We need here to make careful distinctions along three dimensions: federal vs. unitary; decentralized vs. centralized; and democratic vs. authoritarian.

A federal state is not always more decentralized and democratic than a unitary state. Sweden, for example, is a unitary monarchy -- but with a very high degree of decentralization and local democracy. Several of the former communist states in Eastern Europe (including Yugoslavia and the Soviet Union) were (and remain) authoritarian and centralized federations. Federations can be more or less decentralized and democratic; so can unitary states. It depends on politics, and how words are used to denote various political ideas.

What most commentators mean when they talk about federalism in Indonesia is, in fact, regional autonomy and local democracy. These could both be achieved without turning the unitary state into a federation. Both regional autonomy and democracy could be accommodated within a unitary state. The newly approved Law on Local Governments provides the legal framework for far-reaching autonomy for districts and municipalities.

In fact, together with the Law on the People's Consultative Assembly (MPR), House of Representatives (DPR) and Provincial House of Representatives (DPRD), it provides the foundation for a total renegotiation of the balance of power between the center and the regions. With empowered local legislatures and regional autonomy, a unitary Indonesia could open up for a more participatory democracy. But this cannot be done without vigilant public opinion demanding that the local regional government is accountable, and builds on a widespread conviction that DPRD members are representatives of the people, not of the state.

Democratization can be obtained both within a federation and a unitary state. It is here that people's energies and enthusiasm are needed. A federation is thus not an end in itself. It is a means that could be used to achieve certain ends, such as a fairer division of revenue or increased political participation on the local level, but it could also be used for less laudable goals, such as to allow resource-rich localities to keep their riches to themselves.

The transformation process could also stir up emotions preventing an orderly result. It is an intriguing fact that out of the world's 10 largest democracies, nine are federations (the exception is Japan). There might thus be something inherent to federal systems that allows for more democratic participation, and thus would be worthwhile for Indonesia to consider. On the other hand, there are risks such as strengthening undemocratic local power-holders through access to more revenue with less central supervision.

The current public debate on the future form of the Indonesian nation must be continued. Whatever form the nation- state takes, the important issues to be looked at are people's participation, good governance and local autonomy.

Just as in 1945, Indonesia today has a rare and historic opportunity to transform the government to meet the challenges of the future. This is a country of potentially enormous social change and entrepreneurship. We are witnessing a flowering of new ideas and social actors, as Indonesia seeks to become a democratic nation with a more just division of powers and resources between center and regions, and between state and citizens.

The writer is a program officer at the Ford Foundation in Jakarta, and is responsible for a program on participatory local governance.