Intergovernmental fiscal relations bill under fire

Intergovernmental fiscal relations bill under fire

JAKARTA (JP): The Indonesian Economists Association (ISEI)
urged on Monday the House of Representatives to cancel debates on
the intergovernmental fiscal relations and local government
bills, contending the draft legislation were so flawed they would
contribute nothing to the improvement of regional autonomy.

An ISEI delegation, headed by Irzan Tanjung, argued at a
meeting with the House's special committee on the two bills that
the draft legislation still vested most administrative power on
the central government in Jakarta.

"If the bills, in their present form and with their present
stipulations, were forcefully enacted by the April 24 deadline
set by the government, they would not be effective in enforcing
an adequate decentralization of government," Tanjung said.

He said the two bills should supplement each other because
power sharing without revenue sharing would be meaningless.

According to Tanjung, the government and the House should
first complete the legislation on local government and only then
formulate the bill on intergovernmental fiscal relations
according to the financial needs of local administrations.

"We can not establish a good financial-sharing mechanism if
the power sharing is still not clear."

"Without a clear definition of the functions of both the
central and local governments, there will be overlap and
confusion in the management of financial resources between the
central and local governments," Tanjung said.

The House currently is deliberating the two related bills,
which the government hastily prepared in response to the rising
disillusionment of local administrations over what they see as an
unfair distribution of revenue derived from local natural
resources.

He added that the time allotted for deliberation on the two
bill also was too short to allow for a meaningful and critical
analysis of such important legislation.

"The two bills stipulate only general principles and simply
empower the central government to determine the technical details
through regulations or presidential decrees."

"It creates a back door for the central government to issue
regulations which will further entrench its power over local
administrations," he said.

Sri Mulyani Indrawati, a member of the ISEI delegation,
expressed concern that the absence of a clearly stipulated
revenue-sharing formula in the bills would again give the central
government a blank check to do whatever it wished with revenue
derived from local natural resources.

"We are worried that if this formula is not stated outright in
the legislation and left to the central government to determine
through regulations, the present gross injustices will remain,"
she said.

She said several areas covered by the two bills, including
revenue sharing, were politically sensitive issues which could
lead to the country's disintegration if they were not properly
addressed.

Sri said the hasty deliberation of the two bills was a token
gesture from the government to address local administrations'
demands for greater autonomy and to win political favor.

"We are afraid the two bills, seemingly designed merely to
reduce pressures from disappointed provinces, will create new
problems which will be more difficult to be addressed," Sri said.

Protests and separatist calls have been seen in several
natural resources-rich provinces, including Aceh, Riau and Irian
Jaya, over the perceived unfair distribution of natural
resources-derived revenue by the central government. Calls for
independence in some provinces have been fueled by the issue.

The two bills were designed to create a more equitable
distribution of income and power between the central government
and provincial administrations. Moves which are hoped will
dissipate separatist pressures.

Meanwhile, legislator Alfian Darmawan admitted the two bills
failed to address several crucial issues, including revenue
sharing, the demand for transparency in the management of local
natural resources and local administrations' accountability in
managing financial resources.

"We realize the government still is not ready to address the
demands for decentralization, both in political and economic
issues," he said. (gis)