PRR Task Force Urges Optimisation of Regional Transfers and Acceleration of Inter-regional Grants

The utilisation of Transfers to Regions is being urged for immediate optimisation to accelerate the recovery of areas affected by hydrometeorological disasters in Aceh, North Sumatra, and West Sumatra. Chairman of the Post-Disaster Rehabilitation and Reconstruction Task Force for Sumatra, Muhammad Tito Karnavian, stated that optimising regional transfers is crucial to speeding up recovery in the disaster-affected areas. According to Tito, regional transfers are one of the key instruments that regional governments can immediately harness to run recovery programmes, while awaiting the disbursement of the permanent rehabilitation and reconstruction budget under the Sumatra Post-Disaster Master Plan. The central government had previously prepared additional regional transfers amounting to Rp10.6 trillion for the three affected provinces. This support is provided to strengthen the regions’ fiscal capacity in accelerating the restoration of basic services, infrastructure, and the community’s economic activity post-disaster. In its implementation, part of the regional transfers is also channelled through an inter-regional grant mechanism. This scheme acts as a form of fiscal solidarity, particularly to assist Aceh as the province suffering the most severe impact from the hydrometeorological disaster. Through this mechanism, regions receiving large allocations of regional transfers can grant a portion of their support to other regions that are more severely affected but have received relatively smaller budget allocations. Consequently, Tito has asked both granting and receiving regions to immediately settle all outstanding administrative processes. Tito observed that the distribution of inter-regional grants is still hampered by bureaucracy. In grant-awarding regions, a frequent obstacle is the slow issuance of a Regional Head Regulation concerning Financial Assistance. Meanwhile, in grant-receiving regions, the process of drafting grant proposals as the basis for fund allocation has also not been fully completed. ‘I am somewhat disappointed. Why is it so slow? Because the agreement was reached quite some time ago. This problem can be overcome. Firstly, the receiving district has not submitted a grant proposal. So, the grantor cannot give without a grant proposal,’ Tito stated during a Coordination and Evaluation Meeting on Development Achievements and the Acceleration of Post-Hydrometeorological Disaster Recovery at the Aceh Governor’s Office. According to Tito, there is no reason for regional governments to delay completing the grant administration, especially in a disaster recovery situation that requires swift action. To speed up the process, Tito has coordinated with the Minister of Law, Supratman Andi Agtas, so that the Head of the Regional Office of the Ministry of Law in the affected areas can help accelerate the harmonisation of the Regional Head Regulations. Tito also reminded regions that receive large amounts of regional transfers not to withhold grant disbursement to severely affected areas. According to him, such support is critically needed to accelerate community recovery, particularly in areas where the damage is more extensive. As a firm measure, Tito stated that the government could propose an evaluation of grant-awarding regions that deliberately stall. One option that can be pursued is to propose a reduction in the regional transfer allocation for regions deemed to be in default during the next fiscal year, and then reallocate it to the grant-receiving regions.