Transparency, crucial to success of authonomy

Joe Fernandez, Institute of Policy and Community Studies, Jakarta

Almost a year after the implementation of the law on regional autonomy and the related law on fiscal balance, arguments are still raging as new problems arise.

The latest public debate has been about the use of the general allocation fund (DAU), accompanied by pressure to reformulate the fund sharing mechanism. A statement by Benny Pasaribu, a member of the House of Representatives (DPR) budget commission, pointed to the mismanagement of funds by a number of regional administrations. Benny said that a portion of the funds had been used by officials to purchase personal items, including luxury cars.

Officials have raised high hopes concerning the importance of the two laws, but many of these expectations have yet to be realized.

Both laws were considered a breakthrough for democracy and social welfare in Indonesia. Indeed, decentralization has become a major experiment that is being closely observed by various countries in Asia and the developing world.

The actual problem with the allocation of funds does not lie in the way the distributions are calculated, but more in the impact of politics on the decision-making process and public participation.

The determination of most regions' budgets is not based on allocative efficiency, which prioritizes the public's urgent needs and strategic activities to activate the public economy. The decisions often neglect the voice of the people due to the "conspiracy" between the regional executive body and the regional legislature (DPRD).

Pressures for a more transparency in deciding budget priorities often encounter instrumental and institutional constraints. Our survey in 2001, conducted in 10 regencies and cities, revealed weaknesses in decision making.

The six-month long surveys combined various methods: Analysis of local media content, in-depth interviews of 60 members of the local elite, random sampling of 1,000 respondents and studies of regional budget and regulation documents. They revealed some interesting findings that could be taken as an initial evaluation of the decentralization process in Indonesia.

Public control of decision making, such as through political parties, was found to be very weak. While these political institutions are the modern components of a democracy, the most important role in decision making was that played by traditional leaders.

Likewise, the formulation of public opinion by the media is still far from meeting the people's actual requirements. The media even tend to be biased in favor of the interests of people living in cities over those in the villages and remote areas.

Most decisions on public policies were taken without consultation with the public. Political transactions in "closed rooms" were conducted just like under the past authoritarian regime.

The pendulum of authority, which has now swung in the direction of the legislature, is not entirely in favor of the people's interests, but has cultivated a new oligarchy comprising the elite of the local executive body and the legislature.

The surveys in the provinces of North Sumatra, East Java, East Kalimantan, South Sulawesi and West Nusa Tenggara also showed that proper attention had not been given to improving the quality of public services, one of the objectives of decentralization.

The survey found that political institutional factors (such as political parties) had not significantly influenced the level of public satisfaction with the entire decentralization process in their respective regions. Satisfaction depends instead on the quality of public services.

Decentralization needs two key prerequisites to achieve any success in building democracy and bringing prosperity to the people.

First, the introduction of active participation as the essence of a broadbased decision-making process, which would reflect strong legitimacy. Second, decision makers should have a spirit of accountability, which would support improvement of the public sector's performance.

Active participation can only occur if there is transparency and if the mechanism of public participation is clear and easy to understand, while accountability can only be developed when there is a smooth two-way flow of information between the elite and their constituents.

However, it seems that transparency and the flow of information have become very costly commodities. The flow of information, both in the form of public control and complaints, rarely reaches the local elite, let alone becoming a part of their policy agenda, as the survey revealed.

Many countries with a decentralized system also have weak and inadequate public control mechanisms. Improvements in accounting and the quality of the state budget report to the public would reduce power deviation in important decisions, such as the expenditure budgets in the public sector.

It has now become more urgent that an evaluation and monitoring mechanism be developed to determine the priorities of a region's budget. The mechanism should certainly involve the public, who provide legitimacy and who own the public assets managed by the local administration.

Without a broadbased mechanism, an oligarchic system at the local level would emerge, breeding a group of public rent seekers who appropriate the people's wealth for their own interests through manipulation of "the people's interest."

We recommend a simple and appropriate mechanism. Public hearings could be held at local councils as part of the decision- making process. The public hearings should not be mere formalities, but must be based on the spirit of disseminating information and stimulating rational reasoning.

This simple prerequisite would open up active participation by harnessing the people's interest in the decision-making process. This would also prevent the kind of decisions that do not positively respond to the public logic. This process needs to give ample time and space to public debates and discussions. Today's decision making process is frequently rushed, with the excuse that there is little time.

A public control and complaint mechanism should also be prepared to change those decisions considered hostile to the public interest. There is an urgent need to develop a smart and critical media community as well as modern political institutions -- especially political parties -- that are responsive to the public's interests. In this way, people's views and complaints would be taken seriously by the political elite.