New govt told to revise autonomy law

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.