Provinces want more revenues from natural resources

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)