Law revisions should aim to reduce poverty: Regents

Law revisions should aim to reduce poverty: Regents

The Jakarta Post/Jakarta

The next government has been told to revise the Law No. 22/1999
on regional autonomy and Law No. 25/1999 on the fiscal balance
between regional and central administrations to arrest the
widening gap between rich and poor across the country.

North Sumatra's Dairi Regent Master P. Tumanggor, whose
regency won an award from the Regional Autonomy Watch (KPPOD) for
providing the best institutional environment for investors last
year, said for most regencies the autonomy laws were "too much,
too fast".

"With the autonomy law, only five sectors, namely national
defense, religion, law, and fiscal and foreign affairs, are left
to the central government to manage. All other areas have been
given to the regencies and provinces," Tumanggor told The Jakarta
Post over the weekend.

For rich regencies, such big responsibilities would be less of
a problem as they had enough funds to deal with them. But for
poor regencies, they were too much to bear, he said.

There are about 440 regencies in the country and they are
mostly poor.

Tumanggor, who holds a PhD in public finance from the
University of Paris Dauphine in France, compared Dairi regency
with Kutai in East Kalimantan. Both have more or less the same
population of about 300,000 and are the same size in area.

Dairi is a poor regency with an annual budget of about Rp 150
billion, of which more than 90 percent is provided by the central
government. Locally generated income only amounts to just over Rp
4 billion a year.

Kutai, meanwhile, is rich, with an annual budget of Rp 6
trillion mostly derived from local sources.

According to autonomy laws, regencies have the right to retain
a portion of local income and the rest must go to the central
government. The bigger their local income, the bigger funds they
can retain.

Such conditions have enabled Kutai to give extra allowances to
its teachers and cheap loans to the poor to start new businesses,
something regencies like Dairi could only dream of doing.

"I'm afraid (autonomy laws) will widen the gap between rich
and poor," he said. "This could easily turn into social upheaval
if it is not addressed seriously."

He proposed that the autonomy law revision should enable the
central government to take back some of its powers to manage
certain areas -- education, health and agriculture.

"I think these three sectors are key points in eradicating
poverty. While giving some of its authorities in these three
sectors to regencies, the central government should maintain
other certain authorities, such as providing cheap books and
cheap health services," he said.

Under the existing laws, regencies could set development
priorities that were contrary to the national interest, he said.

Simalungun Regent John Hugo Silalahi said during the last few
years he had found it very hard to make ends meet in developing
Simalungun. "I can understand (Dairi's) difficulties, as I've
experienced them myself," he said. Only a small number of
regencies could generate most of their income from local sources,
he said.

Simalungun with a population of 808,000 had an annual budget
of about Rp 400 billion, of which over 90 percent came from the
central government. Only about Rp 17 billion of the regency's
income was generated locally.

Silalahi said the central government should maintain its
management of vital sectors that catered for the public good
until regencies had the capacity to manage them.