Transparency, crucial to success of authonomy

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.