2003年-世界发展银行全球_Decentralizing_Indonesia___A_Regional_Public_Expenditure_Review_Overview_Report_145页_938kb

Summary of "Decentralizing Indonesia" Report

Core Content

This report provides an in-depth analysis of Indonesia's decentralization process, focusing on the legal, fiscal, and administrative aspects of regional autonomy. It evaluates the outcomes of the 2001 "Big Bang" decentralization, the challenges faced, and the potential reforms needed to ensure the success and sustainability of the decentralization program.

Main Points

1. Decentralization Overview

• Indonesia has undergone a radical and rapid decentralization process, transforming from one of the most centralized to one of the more decentralized countries.
• The 2001 Big Bang decentralization significantly shifted responsibilities to local governments, increased regional spending, and transferred over 16,000 service facilities to the regions.
• A new intergovernmental fiscal framework was introduced, based on general grants rather than earmarked grants, and included mechanisms for sharing natural resource revenues.

2. Regional Autonomy and Legal Framework

• Regional autonomy is now embedded in the constitution, with the Supreme Court playing a role in protecting regional rights.
• The legal framework is still evolving, and there are ongoing conflicts between laws and regulations, particularly between the civil service law and decentralization law.
• The law provides for the assignment of functions to regions, but this is not always clear or consistent, leading to confusion and inefficiencies.

3. Clarifying Functions

• The assignment of functions between central and regional governments remains unclear, which affects accountability and fiscal system design.
• The constitution now requires specification of central government functions by law, not just regulation, but this is yet to be fully implemented.
• The government should:
  • Clarify which functions are obligatory for local governments.
  • Adjust sectoral laws to align with decentralization principles.
  • Remove central regulations that conflict with regional responsibilities.

4. Building Regional Capacity

• Despite the transfer of government apparatus, many regions lack the human and administrative resources to deliver public services efficiently.
• The role of provinces is limited, which restricts economies of scale and the ability to perform cross-regional functions.
• The government should:
  • Reinforce the role of provinces in service delivery and coordination.
  • Create financial arrangements that encourage regional cooperation.
  • Sharpen criteria for the creation of new regions and remove fiscal incentives for splitting.
  • Review and revise central regulations that hinder regional civil service reforms.

5. Intergovernmental Fiscal System

• The new fiscal system has strong features, including an equalization grant and financial reporting requirements.
• However, it remains highly unequal, with the richest regions generating 50 times more revenue per capita than the poorest.
• Regions are heavily dependent on transfers from the center, with less than 5% of their revenue coming from own taxes.
• This high dependency limits local accountability and increases fiscal risks for the center.
• Improvements are needed in the fiscal system to:
  • Increase regional taxing power.
  • Design a more equalizing general grant.
  • Provide specific grants for central priorities.
  • Implement a regional borrowing framework with hard budget constraints.

6. Accountability and Civil Society

• A new accountability system has been introduced, with regional heads elected by regional parliaments.
• Civil society has become more active at the local level, with regional associations acting as powerful lobby groups.
• The report emphasizes the need for stronger accountability mechanisms, including:
  • Clear minimum service standards.
  • Regular monitoring and performance reporting.
  • Institutional support for citizen accountability.
  • Greater access to information and transparency.

Key Information

• Fiscal Year: January 1 to December 31.
• Currency Equivalence: US$1 = Rupiah 8,250.
• Decentralization Laws: Law 22/1999 and Law 25/1999.
• Regional Budgets: APBD (Regional Budget), RAPBD (Regional Annual Budget Proposal).
• Transfers: DAU (General Allocation Fund), DAK (Special Allocation Fund).
• Civil Service: The transfer of 2.1 million civil servants was a major step, but challenges remain in managing them at the local level.
• Challenges:
  • Inequality in regional revenue and expenditure.
  • Limited local capacity and administrative resources.
  • Conflicts in legal frameworks.
  • Fiscal risks from regional borrowing and improper taxation.
  • Need for better accountability and transparency.

Directions for Reform

• Clarify Functions: Amend laws and regulations to specify clear obligations for local governments.
• Strengthen Regional Capacity: Improve human and administrative resources, and enhance provincial coordination.
• Improve Fiscal System: Increase regional taxing power, design a more equalizing grant system, and implement a robust regional borrowing framework.
• Enhance Accountability: Establish minimum service standards, strengthen monitoring, and promote transparency and access to information.

Conclusion

The report concludes that while Indonesia's decentralization has made significant progress, much work remains to ensure its long-term success. The government must address legal ambiguities, build regional capacity, and reform the fiscal system to support efficient and accountable service delivery at the local level. The process of revising laws and regulations should be guided by a clear vision for the future of regional governance in Indonesia.