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Ten Years of the Implementation of Indonesia's Decentralization:
Reformulating the Role of the Province

Jakarta, 25 June 2009 -- State Ministry for National Development Planning (BAPPENAS) and the United Nations Development Programme (UNDP), held a national policy seminar in Jakarta to review the impacts of the implementation of Indonesia’s Decentralization, 10 years down the road. Supported by Decentralization Support Facility (DSF), the event called for further clarification of the currently ambiguous roles of provincial governments, in terms of five core development dimensions: (1) law, policy and institutional relationships among central, provincial and district government, (2) provincial governance, (3) inter-governmental fiscal relations, (4) spatial dimension of regional development, and (5) economic relations between province and district. The event also launched new reports, the Study on the Alternatives to Proliferation of the Regions, and UNDP Policy Issue Paper on the role of the province. 
“Decentralization has become a reality in Indonesia,"  Prof. Sofian Efendi, Senior Decentralization Advisor at UNDP, elaborated. “After ten years of implementation, Indonesia devolved key public service provisions to district/municipal level, reassigned 2.5 million civil servants, and provided direct accountability of local governments to their constituents,” Sofian explained.
“Effort on strengthening the role of provincial government is actually outlined in Law No. 32/2004 that still needs further elaboration on what exactly the ideal roles and functions of the province within the country’s decentralization and regional autonomy context,” stated Dr.Ir.Arifin Rudiyanto Msc, BAPPENAS’ Director of Regional Development and Autonomy,  in his opening remarks. According to him, national Long-Term Development Plan for 2005-2025 recommended significant improvement of decentralization and regional autonomy implementation to be included in the national Mid-Term Development Plan for 2010-2014.  “Furthermore, the review serves as an essential input for the revision of Decentralization Law No. 32/2004, as well as reformulation of Indonesia’s regional autonomy policy in the future,” Rudiyanto concluded.
Concerns surrounding Indonesia’s decentralization policy are centered on the lack of legal clarity to support its implementation at the provincial level. On the fiscal side, most of the local governments are highly dependent on transfers from the central government. The tight fiscal situation leaves little room to initiate programs for development, though programs in the health and education sectors have increased over the last few years.  Furthermore, the importance of the provincial government’s roles and functions are not clearly elaborated in the decentralization laws (Law no.32/2004 and Law no. 33/2004). This jeopardizes the planning, budgeting, and monitoring processes that will have direct consequences on the way public services are administered by local governments. Moreover, although the provincial governments have no clear functions, they are needed by the national government to represent them in undertaking a range of national government functions.
Actual governmental functions remain unclear. It is not yet clear whether functions of policy-making, monitoring, and implementation should be divided or shared and neither is it apparent to whom the local governments should be accountable. Provinces do not have administrative power over the districts/municipals, the latter are not answerable to the former and, hence, render monitoring difficult. This resulted in the lack of provincial financial power over the districts/municipals.
The national policy workshop comprised of officials from various central government ministries, as well as representatives of regional governments, donor agencies, international development agencies, universities, think-tank groups, and decentralization experts. Released during the event were the findings of UNDP-BAPPENAS-DSF Study on the Alternatives to Proliferation of the Region in Indonesia, and UNDP Policy Issue Paper on The Role of The Province. The reports provided policy alternatives and trade-offs to be considered by the government, to be carried out at provincial level.
For more information, please contact:
Loui Thenu (Communications Officer) at loui.thenu@undp.org or +62813 1957 3346
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