Open discussion vital for federalism

By Oliver Draper

JAKARTA (JP): The interest in changing the Indonesian government from a unitary to a federal one is fueling a lively debate. The key participants are students, political scientists and constitutional experts, although to date they have not been successful in moving public opinion.

The supporters of the unitary state -- which includes government, many of the main political parties, such as the Indonesian Democratic Party of Struggle (PDI Perjuangan), Golkar and the Indonesian Military (TNI) -- still hold the high ground and can convince society of the preservation of the unitary state system. The big challenge for the federalists is the public's perception that their ideas are new and lack understanding of the central issues.

The demand for a federal system is largely the product of a feeling of injustice against central government, and its abuse of local revenue distribution accompanied by authoritarian actions by members of the armed forces and government officials.

This has created an unhealthy undercurrent of resentment against the system, which has been surfacing in different ways for several years now.

The particularly open declaration for a federal system in East Kalimantan has led to an important development. The provincial authority has gone so far as to submit a clear and detailed request listing three specific demands, despite considerable political pressure from PDI Perjuangan.

The first point deals with local revenue distribution, stating that 75 percent should be retained for use by the province, with the balance being made available for central government.

The second request is for the provincial government to have full authority to manage its natural resources, without central interference, an approach taken by corrupt regimes of past governments.

Thirdly, the provincial government has requested a degree of repatriation of profits earned within the province by state owned enterprises (SOEs) and private companies originating outside it.

The students' argument for a move towards federalism also addresses the possible impact on the army of such a reform. A reduction in the power of the military would mean a gradual elimination of their involvement in local politics and economic development.

Another significant group of participants backing federalism is the growing pool of young well-educated people who support the National Mandate Party (PAN).

Their chairman, Amien Rais, Speaker of the People's Consultative Assembly (MPR) has spoken in favor of the federal system at the risk of protest from PDI-P and Commission II of the House of Representatives (DPR).

Noted economist and secretary-general of PAN, Faisal Basri, also supports the federalist movement. He believes that real regional autonomy must be founded on a federalist framework because that will be the only way for each of the regions to exploit their particular characteristics to the fullest extent possible, and survive in a globally competitive environment.

There are several other political observers in favor of adopting a federal state system. Arbi Sanit says in trying to maintain a unitary state, Indonesia would be in danger of dissolution since half of the provinces have requested independence.

Indeed it is the early days of Indonesia's history to which historian Anhar Gonggong refers in his argument when he says that the debate in favor of a federal structure dates back to the proclamation of the republic. Gonggong believes that in the implementation of a well thought out federal structure there would be no reason for the regions not to survive, given the mandate to regulate them.

There is a fundamental difference between the decision-making process implied by a federalist structure and that of a system of regional autonomy.

In the former, the authority is transferred to the province while the latter case rests within the central government. The union of states making up the federation act separately for the benefit of their state, deferring to the central government only on questions of national interest such as foreign, defense or national economic policy.

All domestic or development issues would be under provincial jurisdiction. It goes without saying that the implementation of such a system would require the agreement of all provinces.

The complete agreement over the delegation of authority and implementation procedures needed for the establishment of an Indonesian federation will not be easy to come by.

The unitary state ideology is already deeply ingrained. The whole process would require agreement on an overhaul of the current system, as well as major provincial details to be worked out such as tax raising powers, for example, and the equally major details to be agreed upon in the realm of defense, foreign and central monetary policies.

Whichever road is taken, the potential will be there for empowerment of the provinces and development of a sense of belonging within each province. Therefore it is important to recognize the two laws in place dealing with the issue of devolution -- Law No. 22 (1999), the focus of attention of Ryaas Rasyid, State Minister for Local Autonomy Affairs on regional autonomy and Law No. 25 (1999) on the financial arrangement between the central and provincial authorities -- as the immediate drivers of change.

For supporters of the unitary state -- such as the Chairman of the newly founded National Economic Board (DEN) Emil Salim -- these laws are considered to meet the criteria of a compromise approach. He argues that they are adequate to satisfy the demands of a federal structure, if properly applied, the Indonesia to emerge would be one of the most decentralized countries in the world. In addition to meeting community demands, their implementation would result in 40 percent of funds returning to the local government.

The federalists, however, are skeptical about the implementation of those laws. In the event that they are successfully enacted, they claim that there would be greater opportunity for abuse of the system under the new Indonesia. The objective should be to work together to find a suitable solution for the benefit of the people as a whole.

In this regard, constitutional law expert Soemantri has suggested amending article No.18 of the 1945 (provisional) Constitution, where federalism was freely discussed, and where the question of establishing a realistic system of local autonomy is clearly laid out.

The parties involved should be able to reach a resolution, but it will require open dialogue between central and local governments as well as other important national institutions. This must be actively encouraged to break the stalemate between the federalists and the autonomists.

The writer is president director of Strategic Intelligence, Jakarta.