Provinces want more revenues from natural resources

JAKARTA (JP): Finance Minister Bambang Subianto said on Monday that regional administrations wanted a greater revenue share from their natural resources, but at the same time they also wanted the central government to continue to cover their spending.

"Almost all provinces want their spending to be covered by the central government. This is something impossible," he told reporters on the sidelines of a gathering with governors of the country's 26 provinces and speakers of the local House of Representatives which was aimed at socializing the autonomy plan.

Bambang said that greater autonomy should also mean a greater responsibility including financial affairs.

But Bambang declined to say whether the governors had rejected the government autonomy formula, explaining that the governors so far had only expressed their general aspirations.

The government plans to introduce autonomy to provinces and regencies early next year. Thereafter, the regions will have more authority in managing their affairs and receive a larger portion of revenue from their natural resources.

The autonomy plan is based on Law No. 22/1999 on regional government, and Law No. 25/1999 on intergovernmental fiscal balance.

But details of the delegation of authority will be stipulated in a government regulation that has yet to be completed.

Bambang said that the government regulation would be finalized in September, at the same time as the debating of the next state budget with the House of Representatives.

The new government regulation will describe in detail those authorities that will remain with the central government and those handed over to the regions.

The central government will maintain authority to set policies on foreign affairs, defense and security, monetary and fiscal affairs, the legal system and religious affairs.

Under Law No 25, resource-rich provinces including Aceh, Riau, East Kalimantan, and West Papua could get between 50 percent and 75 percent of the profits of natural resource exploration in their provinces instead of the 1 percent they currently receive.

The government regulation will also specify the division of authority between the central government and provinces in other sectors including mining and energy, industry and trade, and forestry and plantation.

Business sectors, particularly foreign investors, are anxiously awaiting the government regulation on the autonomy plan.(rei)