Marianne Kearney, Jakarta – Confusion over the powers of local regents, or district heads, who have been empowered under Indonesia's messy autonomy laws, has finally come to a head with Jakarta delegating powers to governors.
This move, based partly on the increasing number of complaints that regents are undermining governors, will prevent inexperienced regents from trying to negotiate foreign investment deals, issue business licences and balance local government budgets.
Under Indonesia's autonomy laws, regents have been empowered to manage most government functions.
However, Minister for Home Affairs Hari Subarno complained on Wednesday that regents had become too powerful and were making decisions that should come under the purview of the central government.
He said the central government also wanted to give more power to provincial governors who were taking a back seat in managing local affairs. "Currently, several regencies have held business agreements with foreign parties without approval from their governors," said Mr Hari.
Under the new guidelines issued by the Home Affairs Ministry, provincial governors will be responsible for city and district planning, issuing licences for logging or mining, supervising local budgets, maintaining security and supervising any foreign investments or agreements. Observers say the former Habibie government's attempt to limit the power of the provincial governments – on fears that they would become far too independent of Jakarta – is now backfiring.
"I think the government realises that in cases where the provinces have become too weak to assume strong roles, then the kabupatens are becoming a pain in the neck," said Mr Bernard May, a regional autonomy adviser from the German Agency for Technical Cooperation (GTZ).
In several regions, there is tough competition between kabupaten (district) governments and provincial governments for control over natural resources and administrative duties, say officials from the Ministry of Home Affairs.
For example, regents in resource-rich provinces such as Kalimantan or Sumatra are often keen to issue logging licences, but the provincial government may want to restrict logging or industrial plantation in certain areas for environmental reasons.
"Wherever money is involved, such as the licensing of businesses, there are heavy contenders between districts, but if it is welfare or security issues involved, then the district governments don't mind if regional governments take control," said Mr May.
Under Indonesia's sweeping but confusing regional autonomy laws introduced in January 2000, district kabupaten governments manage most government affairs. However, the laws on regional autonomy often conflict with other laws and only vaguely describe the powers of the central and provincial governments.
The central government still oversees defence, the budget, foreign policy, religious affairs and the legal system.
As a result of these unclear laws, many regents have passed local laws and raised local taxes which Jakarta late last year decided to revoke.
The Finance Ministry last year said about 71 regulations issued by regency governments either overlapped with central government laws or hindered investment and trade.