New balance of power between central and local governments

Owen Podger, Jakarta

Law 22/1999 on regional government was meant to bring government closer to the people while maintaining the unitary state of Indonesia. It led to a fundamental redesign of how the country is governed, but it has not overall resulted in better government. In her last days of office, President Megawati Soekarnoputri signed Law 32/2004 that replaces it. So how does this new law score compared with the previous one?

Modern public management associates the following attributes with good regional government:

o Democracy -- regional government should be by the people for the people.

o Relevance -- regional governments should be responsible for those functions that it is best capable of dealing with, following the principle of subsidiarity. Functions should always be undertaken at the lowest level of government unless there are compelling reasons for managing them at a higher level.

o Empowerment of managers'Regional leaders and managers should have the authority and responsibility to manage without interference, and only good managers should be allowed to manage

o Accountability -- Managers should be accountable to leaders, and leaders to both the people and those who provide their funding.

o Clarity, consistency, and appropriateness of policy -- Laws on regional government (as with any subject) should be clear, unambiguous, practical and principle-based statements of policy, consistent with other laws and the Constitution.

High scores are given on the introduction of direct elections of heads of regions. Low scores for withdrawing the policy of democratic elections of village councils.

Low scores are also given for allowing the central government to override decisions of elected leaders on what is in the public interest; and on granting the governor the right of final say on disputes between districts.

Lots of plus points for allowing further devolution of functions from districts to villages, but no change in score for lack of principles for determining what level of government does what. No points for allowing provinces to take over functions when districts cannot resolve disputes between themselves.

An additional half point is given for adding effectiveness and efficiency as fundamental to good management, for including integrity and competence among the factors for promotions.

But Law 32/ 2004 reduces the capacity of regional governments and their managers to manage effectively. Budgets can be controlled by higher levels of government. District secretaries are now appointed by the governor -- district leaders submit names of three candidates and the governor appoints one. District organization structures are now also controlled by the governor. And staff establishments are defined by the State Minister for Administrative Reform, without mention of the role of managers in determining the staff they need to perform. Without power to organize or staff, planning is strategic only in name.

There is no reduction of the span of control to manageable limits. There is still one head, one deputy, one secretary, then a mass of operational units, agencies, offices, bureaus and sub- district offices -- too many to be managed effectively by the leaders.

There is still no guarantee of competition and transparency in appointments. With limited authority to manage their own teams, managers have limited accountability.

There are very few sanctions in the law. Corrupt leaders cannot be investigated without first having the agreement of the local council. There are around 30 regional regulations required, but no sanctions against regional leaders who fail to pass them. While supporting performance budgeting, there is no mention of sanctions for failures to perform. The law calls for a government regulation on guidance and supervision, which is to include sanctions. Wrong place. Sanctions should be in the laws, because accountability is to the people.

The dominant feature of Law 32/2004 is that it makes regional government different from the rest of government, creating special provisions for elections, for financial management, for personnel management and treasury, for organization, and just about everything else. Its approach to fiscal balance is inconsistent with Law 33/2004 which was passed on the very same day, requiring duplication of government regulations in several instances.

There are several articles listing principles (asas) for this and that, but as few of these are explained, and there are no sanctions for breaking principles, they are unlikely to be effective.

Forty eight implementing government regulations are identified. Articles provide guidance to drafters for only some of these, and provide the underling principles for even less. Over half of them would appear unnecessary. Why is a government regulation required by this law for accounting standards? Why is there a separate government regulation for helping the handicapped to vote, and two government regulations for election of village chiefs?

There are many strange loops and peculiarities. For example, control of land use planning regulations is covered under financial management, and the paragraph headed mid term interchange of elected representatives has no articles in it on such interchange.

Revision of Law 22/1999 was needed because of its lack of clarity, consistency, and appropriateness. In Law 32/2004, as many new such problems have been created as old ones have been solved. I urge the new minister, the DPR and DPD, to urgently revisit this law. It will still not deliver what people wantgood regional government for them and by them.

The writer is a freelance consultant, and co-author of a recent report for Asian Development Bank (ADB) entitled Government for All People, and can be contacted at micah68@centrin.net.id