INDONESIA DECENTRALIZATION: DIRECT LOCAL ELECTION VS PUBLIC SERVICES DELIVERY

INDONESIA DECENTRALIZATION:

DIRECT LOCAL ELECTION VS PUBLIC SERVICES DELIVERY

Nurliah Nurdin

Dr.Nurliah Nurdin,S.Sos, MA is a lecture in Institute of Local Government Affairs,

ABSTRACT

It is the function of government to provide public utilities and services. Citizen could argue whether their government really work or not strictly by having the basic need of society provided, such as health care, cheap or even free education, easily to find a job, safety and confort pedestarian, clean and healthy environment, and reliable public transportation. Two bills of Indonesia decentralization have been implemented as decentralization becomes the most important global trends of the new century, yet there is still no consensus on how to design political institutions to realize its benefits. In other side, centralization has been blamed to prolong the nation services during Soeharto Era. However, in remote regions and specific sectors, decentralization has meant aweaker state, more clientelism, and continued environmental destruction. Aconceptual puzzle by academics by question how to have Indonesia decentralization benefit both nation soveregnty and people need fulfilled. To have a strong decentralization on public need, is a institutional work among executive,legislative and judicative at the national level. Further, surveilance on how local election has a strong impact on the public services delivery. Three focuses of this paper are : institutionalism of decentralization, the influences of local election to the decentralization, and Local election’s perfomance on Public Services. Data and respondens are gathered since 2011-2012 as the writer become a research expert on Grand Design of Regional Autonomy cooperated between Minister of Home Affairs and the World Bank and The Advisory Board of President on Reformation of Government and Bureaucracy.

Key words: Decentralization, direct local election, public services.

Introduction

Decentralization in Indonesia has been written in the beginning of independence. Article 18 of the 1945 Constitution provided for the creation, maintenance and development of local governments in Indonesia and for the enactment of a local government act. Then, law concerning local government in Indonesia was Act Number 5 of 1974, which was entitled Governance at Regional Level (hereinafter referred to as the Local Government Act of 1974). This title is intended to indicate that the territorial division and sub divisions of Indonesia were not only administered locally, but also nationally as well as jointly. The entire territory of the Republic of Indonesia was divided and sub divided with regards to the principle of deliberation and consensus in administration and the traditional rights of the regions that have a special character according to the Constitution. This last provision is concerned with the great diversity of people constituting the Indonesian nation. The different ethnic cultural groups not only have their own customs and dresses, but even languages, cultures and attitudes that vary from one part of the country to another. This diversity enriches Indonesia's unity.

Following the reformation momentum, the regional autonomy law No 22 Year 1999 and law of Finance No. 25 in 1999, Indonesia has seriously implementing the regional authomoy law and the Finances Policy. However, some problems have occured that make the goals of regional authonomy to increase public interest fulfilled and public services were not provided as a expectation of decentralization. Then the revision of regional autonomy law has born Law No 32 year of 2004 which is implemented as a better version of the previous law. Nonetheles, the decentralization still emerge some problems expecially on the public services delivery. Further, direct local election that enacted in 2005 as expected to be local participation to increase the democracy values as well to provide a better public services seems to ruin the goals of decentralization. Beside consumpt local and national budget to conduct election, direct local election has openly risen new problems such as local conflict that tend to be a massive demonstration, riots and violences among candidates’s supportes, cultural and social unrest, politization of bureucracy, the use of public budget for supporting the election, the attention of elected head of region for public concerns were left out and the concern of reelected and secure the position is mostly the elites focuses instead of guaranttee the public services. This paper is written to explore on decentralization and local election, how they are interrelated to increase public services and how local election has partly ruined the decentralization. How is the decentralization and local election has a negative impact on public services delivery. To answer the question, some studies present on decentralization concept, local election concept, the fact of Indonesia decentralization and the relation of decentralization and local election in providing public services institutionalism of decentralization, the influences of local election to the decentralization, and Local election’s perfomance on Public Services.

A. Institutionalism of Decentralization

Generally, decentralization has been perceived as a transfer of authority from central government to local government with the aims to implement closer the public

services delivery. Decentralization basically is a reduce of authority of central government to the provincial and local government. Expecting to be closer to their constitutient then local election was also held in Indonesia since 2005. The Regional Autonomy Laws No 25 year of 1999 and the extended revision Laws No 32 Year of 2004 were intended to have a better local government performance in building their own regions. In other words, these laws were meant to solve regional and local problems which will free central government from spending much time and energy dealing with local problems; such as number of schools needed, hospital, road, and any public utilities. It is expected that the central government will focus thinking on strategy and supervisory, to deal with globalization issues and to provide and promote the best need of the country. to maintain the national integration and most important is to guide, to supervise, to guard and to control the implementation of decentralization.

Related to this authority transfer, a working paper of UNDP and Germany also proposed a definition of decentralization as stated below:

“....decentralization or decentralization governance , refers to the restructuring or reorganization of authority so that there is a system of co-responsibility between institutions of governance at the central, regional and local levels according to the principle of subsidiarity, thus increasing the overall quality and effectiveness of the system of governance, while increasing the authority and capacities of subnational levels...... Decentralization could also be expected to contribute to key elements of good governance, such as increasing people’s opportunitinies for participation in economic, social and political decisions, assisting in developing peoples capacities; and enhancing government responsiveness, transparancy and accountabulity

Indonesia actually has law of decentralization year of 1974, somehow under President of Soeharto rule, the strong centralization of any lives of government was applied. Then, riot and demand for reformation happened in 1998, the heaviest strikes ever occured in Indonesia that parliament stood to step down President Soeharto. The flows of reformation then insist in four areas of changes, namely : law enforcement, civil-military relation; regional autonomy and a support for economic development. When Presiden Habibie replaced President Soeharto, there have been tremendous changes have been made to answer people demand. One of the system changed is the regulation of regional autonomy. Somehow, due to the lack of supervisory from the central government, the decentralization has been applied in different perspectives, not only among local governments, power relation between local government and provincial level but also central government and local government. For example, the head of Kabupaten/Kota make government organizations more than the actual need.

There is proposition that electoral incentives can play a central role in the success of decentralized delivery of local public goods. The presence of formal local institutions, particularly electoral rules that enable voters to reward and punish locally-elected officials, is key for reaping the benefits that decentralization can provide. When constitutional rules do not support electoral accountability, introducing other mechanisms of political rewards and citizen control becomes all the more important.

However, making local government organizations without a necessity assesment only consume local revenue and budget including to pay all the officials expenses. As the impacts, so many program for public services were abandoned due to the insufficient budget, for example training for physician and nurses, training for teachers, local economic empowernment, and other program for public benefits.21Therefore, the law of regional autonomy in 1999 was revised and the law of decentralization 2004 become more details in what ares that the local government response for and what is the central government obligation. As stated in UNDP-Germany research recommendation below, decentralization essentially for the much benefit for the local public services.

 “.... while decentralization or decentralization governance should not be seen as an end in itself, it can be a means for creating more open, responsive and effective local government and for enhancing representational system of community—level decision making. By allowing local communities and regional entities to manage their own affairs and though facilitating closer contact between central and local authorities, effective system of local governance enable responses to people’s needs and priorities to be heard, thereby ensuring that government interventions to meet variety of social needs. The implementation of strategies is therefore increasing to require decentralized, local participatory processes to identify and address priority objectives for poverty reduction, employment creation, gender equity and environmental regeneration22

This statement clarifies that decentralization is not enough by only transferring authorities to the local government. It needs further participation of local society to make decision. The system should assure that the effective local government is to enable responses of people need. Therefore as one package of decentralization is to count local society participation in the decision making process. It is no longer applicable for any public decision inclusively only determined by elites without people’s concern.

Role of Central Government vs Local Government

Eventhough the practice of local governance in Indonesia has made progress since the reform period, as a enactment of Law No. 22 of 1999 onRegional Government. The relationship between central and local governments become more decentralized, except six powers that remain in the central government, most of the authority delegated to the regions in the field of governance. In general, the law No. 22 Year 1999 on Regional Government has a lot to bring progress to the region and also for the improvement of people's welfare.

The balance of power between central and local government is matter to improve the lives of local society and communities. If there is balance of power between central and local government lies, then there lies the responsibilities and accountabilities for the delivery of improvement. A need for central government to set and monitor national strategic goals, while local government must have its own autonomy to shape the development of their communities. However, as it is also statad in the research done by the World Bank, that the actual balance between central and regional authority is not justabout a conscious division of labour but also about concrete struggles overpolitical and economic resources as illustrated in Indonesia, where decentralizationhas resulted in confusion about the distribution of power andauthority between different levels of government. Rather than a technicalgovernance issue, the confusion stems from a tug of war between competinginterests which has a concrete, material basis.

In the Central government, powerful coalitionsretain a vested interest in maintaining some controlover local resources and authority over taxes, royalties and investmentpolicy, while attempting to balance this against aspirations for greaterlocal autonomy. On the other hand, local elites (especially at the subprovinciallevel) are intent on taking direct economic control, typicallyciting the injustice of past practices that allowed Jakarta to exploitIndonesia’s vast riches. In the meantime, provincial authorities are stuckin the middle, struggling to retain some power and not to fall into theoblivion of political and administrative redundancy. The result: ratherthan breaking up centralized state intervention and promotinginvestment,decentralization has so far opened the door to a host of uncertainties whichfrighten investors.

Further, the research also stated for cautions that decentralization ‘may not always be efficient, especially forstandardized, routine, network-based services’. It can also ‘result in the lossof economies of scale and control over scarce financial resources by thecentral government’. In fact a central theme has been a wariness that ‘weakadministrative or technical capacity at local levels may result in servicesbeing delivered less efficiently and effectively in some areas of the country’

central government only has six powers over the local government, they are Foreign Relations; Defense; Security; Judicial; Monetary andFiscal; Religion. On the other hand, local government has been transferred 31 decentralization authorities in addition to 8 optional authorities. Having that lots of authorities supposedly make the local governments worked more with establishing downward accountability to citizen levels.

Further the authorities make the local government perform the public goods levels maximized under decentralization. Centralization, on the other hand, produces the surplus maximizing public goods levels only if the districts are identical. Thus, with identical districts, decentralization dominates when spillovers are small and dentralization dominates when spillovers are large. With non-identical districts, decentralization is still better when spillovers are small.

One of the most important matters in decentralization is the accountability from local elected governments to the central government level. Transfer of expenditures and political responsibility to the local authorities may be supported to alleviate the burdens on the central government. It may also be a means of more revenue generation by mobilising more local resources. This means that decentralisation can be a “win‐win situation” for both central and local governments. Decentralisation processes may simply provide positive development and democratisation options which a centralised governmental system does not offer

.

Chart 1. Indonesia Central and Loval Government Authorities

Central Government 6 Authorities

Provincial Government, Local Government/Municipality: 31 Decentralization Authorities + 8 Optional Authorities

6powers in the Central Government: Foreign Relations; Defense; Security; Judicial; Monetary andFiscal; Religion

31 Compulsary Action: Social environment; Trade;Marine and Fisheries; Forestry; Education; Health; SMEs; Workers & Transmigration;Farms and Estates Mining; Transportation; Investment; Culture and Tourism; Population; Empowerment of Women; Family Planning and Family Welfare; Industry;PU;Management of space; Youth and Sports; Information and Communication; Housing; Archives; Defense; The Unity of Nation and Politicsl; Statistics;PUM; PMD; Personnel; Library ProposedAction: Marine and Fisheries; Agriculture; Forestry Energy and Mineral Resources;Tourism;Industry;Trade, and Transmigration

B. The Influence of Local Election to Decentralization

Local direct election in Indonesia has been implemented as extension of local government laws ( No 32 Year of 2004) to make the public services and local interest closely implemented.It was firstly applied in regency of Kutai Kartanegara in June 2005. One year after the first direct election for president and the house of represnetative member. As written in dictionary of babylon, election is one way to make the public services closer to the need of people. Having local executives and legislatives are elected directly supposedly make the relation of member of representatives and their constituents

of no boundaries. In other words, people’s need and interest can be easily heard by the representative and as outputs to increase people’s prosperity.

Election is the process of voting in order to select one person from a specific group to perform certain duties in a government, society or corporation. Local elections are the elections held for the purpose of choosing representatives for local government or for a county council, town or city. Elections can also be held for the purpose of deciding a state public question.

Somehow, as mentioned before, local election and decentralization have made the bureucracy in patology which is only serve for elites in power. There is a swift corruption from central government to the local government to the broad power wealth management and financial areas as well as "money politics" that occur in local elections.

The World Bank lists that at least five criteria are necessary for successfuldecentralization. These requirements are ensuring that local financial resources match theability to provide local public services, the local community should be aware of the costof services, the community should be able to express their desires in a meaningful way,there should be transparency and accountability of local government activities and thelegal and institutional system should match the political objectives.28 All these criterias have not been implemented as a result of direct local election to decentralization.

The evidence shows that public services are still minumum rate due to the high corruption as actually increased after local election. It seems the corruption only sphered out from central government to local government. Some research and publication showed Indonesia was in a chronic corruption state. Corruption ranked by Transparency International Indonesiain 2009 on Corruption Rating Index (CPI) placed Indonesia at 111 of 180 countries in the world.While for the ASEAN, Indonesia is ranked 5 of 10ASEAN countries, namely Singapore, Brunei Darussalam, Malaysia and Thailandare at 1-4, while Vietnam, the Philippines, Cambodia, Laos and Myanmarwho finished 6-10.

Corruption in local election has a nightmare impact on decentralization. Guidance and guard to track the decentralization and transffered power as well as authority must be redesigned. Direct local election has made political transaction between the head of regions with investors, businessman, bureucracy and any level of government to be involved in corruption by bribing, preveledge trading and monopoly and using bureucracy as campaign supporters.

By looking at a variety of data, a major challenge to the results of recruitment political leadership through Direct Election is to minimize the impactmoney politics that cause negative political reciprocation before electionimmediate progress. Another challenge is the increasing professionalism of the headareas. Formulation of good policy  is largely determined by the understanding of the regional head of the policy formulation process that putscommunity as a major public policy benefit designed. System of direct election still contains the possibility of the election of regional heads less capacity

A recent USAID document on decentralization in Indonesia replicate that local governments have little experience with participatory self-rule and will need assistance to create adequate mechanisms for participation, transparency and accountability. They also have limited technical capacities, particularly to perform functions that have been provided by central agencies, and they will need assistance to demonstrate to citizens that autonomy does lead to improvements in services and the environment. Particular attention will be paid to ensure women’s participation and concerns are included at all levels.

Then what can be done to force elected local head of government only concern to the local public interests as so many political transaction occured during the campaign time. How to make any policies are responsed to the public’ need and avoid the accumulation need of the campaign team and the business cooperation behind the screen? The results thus far correspond to a simple model of political agency. It requires that voters are informed of and care about the program’s impact, and mayors with re-election incentives exert effort on program delivery in order to increase their chances of re-election. A prediction of this model is that first-term mayors are more likely to get re-elected in municipalities where the program performed better. Clearly, re-election responds to the quality of performance in a broader set of public functions which are presumably correlated with effective management.

is largely determined by the understanding of the regional head of the policy formulation process that putscommunity as a major public policy benefit designed. System of direct election still contains the possibility of the election of regional heads less capacity

A recent USAID document on decentralization in Indonesia replicate that local governments have little experience with participatory self-rule and will need assistance to create adequate mechanisms for participation, transparency and accountability. They also have limited technical capacities, particularly to perform functions that have been provided by central agencies, and they will need assistance to demonstrate to citizens that autonomy does lead to improvements in services and the environment. Particular attention will be paid to ensure women’s participation and concerns are included at all levels.

Then what can be done to force elected local head of government only concern to the local public interests as so many political transaction occured during the campaign time. How to make any policies are responsed to the public’ need and avoid the accumulation need of the campaign team and the business cooperation behind the screen? The results thus far correspond to a simple model of political agency. It requires that voters are informed of and care about the program’s impact, and mayors with re-election incentives exert effort on program delivery in order to increase their chances of re-election. A prediction of this model is that first-term mayors are more likely to get re-elected in municipalities where the program performed better. Clearly, re-election responds to the quality of performance in a broader set of public functions which are presumably correlated with effective management.

Indonesia Condition on Decentralization

It is expected that the human development index (HDI) is getting better by implementing decentralization. Since applied in 1999, the regional autonomy has not been able to fulfllled the expectation. Indonesiais stilllagging. HDI is stilllackbehind onpublic services.United Nations DevelopmentProgram (UNDP) stated thatIndonesiaonly0.617of HDI. This figuredropped toposition124 of187 countries, fromlast yearranks108 of169 countries. IPMis a measure ofthe success of developmentof a nationby looking atthreekey indicators, namelyeconomic development, health, and education.

For the level for Human Development Index, Indonesiaranks in the sixthlevel inASEANwith index0.617. This position isunder theSingaporeranked26th(.866); Brunei, sequence-33 (.838), followed byMalaysia, ranked61st(0.761), Thailand, the order of103(.682), and the Philippines, ranking -112(0.644).The position ofIndonesiais onlybetter thanVietnam, whichwasin the order of128 (.583); Laos, position-138 (.524); Cambodia, order-139 (.523), and Myanmar, the rank-149 (.483).One indicator ofdecline in the indexisthe average length ofschoolingof Indonesiais only5.8 years.

Analysing the decresing of HDI after Indonesia applied regional authonomy, then, some questions rised, what is decentralization for if the index of human development even lower and the public services are not achieved by local society. Decentralization has its advantages and disadvantages. Theoverall impact of decentralization on service delivery depends critically on its design andprevailing institutional arrangements.Some literatures determine on factors that are likely to influencewhether decentralization improves the efficiency of resource allocation, promotes costrecovery and accountability, and reduces corruption in public services.

The literaturesuggests that decentralization may work best, indeed may only be meaningful, if there isa local democracy; local democracy may work best in socially and economicallyhomogeneous communities; and the devolution of the power to tax can create verticalexternalities in terms of tax rates that are too high. The most sensible form ofdecentralization may therefore be to create local democratic governments, matchjurisdictional design to communal lines, and to primarily devolve expenditures ratherthan taxes (using transparent and formula-driven fiscal transfers).

As seen in Chart 4, there are 15 local government expenditures on public it is only around 20 percents of the total local budget. Another 80 percents of budgets were primarily used for offices, local employment, and other bureucracies expenses. This imbalance expenditures for public versus local government were the pictures of most local government buggetary. The expectation to have a prosperity by decentralization and direct local election will not be achieved any soon if the figure of local government expenditure ration 80:20 percent which are 80 percent for bureucracy and 20 percent only for public need including to build road, provide health services and educataion.

Chart 4. Local Government Expenditure on Public vs Office

NO	LOCAL GOVERNMENT	% TOTAL LOCAL BUDGET for OFFICE
1	Kabupaten Tulang Bawang Barat	76,08%
2	Kabupaten Klaten	75,13
3	Kabupaten Lampung Tengah	74,57%
4	Kabupaten Pringsemu	73,35%
5	Kabupaten Boyolali	71,66%
6	Kabupaten Purworedjo	71,56%
7	Kabupaten Mojokerto	71,24%
8	Kabupaten Karanganyar	71,17%
9	Kabupaten Tanah Karo	71,04%
10	Kabupaten Kulon Progro	70,93%
11	Kabupaten Pidie	70,85%
12	Kabupaten Magetan	70,83%
13	Kabupaten Bireun	70,62%
14	Kabupaten Banyumas	70,62%
15	Kabupaten Kuningan	70,27%

SUMARY

Some research have been done to evaluate the decentralization impact on the fulfilment of local public needs. There is a finding in the research of Grand Design of Regional Autonomy40 that bureucracy has been damaged as an implication of local direct election. Each employees is expected not to be neutral but to take side on one to another candidates. If, for example, the major and the vice were both running for the next election, then most of bureucrats were forced to support one to another candidate. If then, the candidate supported won, all good position in the office will be easily transferred to the “man of elected government. On the other hand, if PNS has supported a lose candidate, then all the position that they have being involved would be directly take from them. No carrier path for PNS .

Direct election raises many problems. Instead of producing a regional head of qualify and effective work for the people, some elected leaders actually involved in corruption. This condition can not be allowed because it will continue to cause harm (adverse effects) for the community.There are six major performance to measurea program success or failure. they are: 1)local governments should increase their own-source revenues. Dependence on central transfers should decrease and the local proportion of budget financing should increase after dcentralization for sufficiency of local government. 2)government actions are transparent and civil society is permitted to operate freely—devolution should increase the accountability of government officials and discourage most forms of corruption. 3) The advocates of decentralization, moreover, argue that decentralizing the delivery and in some cases the financing of local public goods (i.e., public goods that do not have substantial inter-jurisdictional spillovers) improves the allocation of resources, cost recovery, and accountability, and reduces corruption in service delivery.

Decentralization is thought to bring government closer to the people by way ofintroducing or strengthening the electoral process at subnational levels, the formation ofcouncils and citizens committees, and direct participation of the users of services and

beneficiaries of public goods delivery. Even where not locally elected, sub-nationalgovernment is thought to have greater knowledge of local preferences, so decentralizationmay encourage allocative efficiency. An efficient division of responsibilities amongdifferent levels of government requires, however, that the role of each level ofgovernment must match its capability, and a set of rules defining who has authority andwho will be held accountable. These rules should be explicit and transparent.Fundamental rules are most often spelled out in the constitution, leading to laws andregulations covering specific implementation of the fiscal system and public goodsdelivery.

As has been written by one of Indonesian Regioal Autonomy promotor, Ryaas Rasyid that dealing with issue of provincial and local regulations that are considerd in violation to the law, it should have been avoided if the central government consistenly fulfilled its obligation to provide guidelines, to supervise and control the implementation. Even after the enactment of all those thousand provincial and local regulations, the central government still as an authority to invalidate them. If the central government dose the job excellently, then the implementation of local election and decentralization policy could be succesful in reaching its destination to maximaze public serivices at the provincial and local level. It needs a lot of political will to implement the decentralization and local direct election proportionally .

Continue Reading