Rendi Akhmad Witular, Jakarta – The delays in the spending of development funds by many local administrations are believed to be partly the result of rent-seeking practices involving collusion between a number of national legislators and local administrations, a minister says.
Under the regional autonomy scheme, local governments are entitled to receive specific allocations out of the annual state budget under the general allocation fund (GAF) and special allocation fund (SAF) arrangements, in addition to a share of taxes and natural-resource revenues.
State Minister for National Development Planning Paskah Suzetta said Thursday that some of the funds allocated to local governments could not be immediately employed because of delays in the completion of their regional budgets.
Paskah said that these delays were often deliberately engineered in order to give the local administrations time to seek higher allocations out of the GAF. For this purpose, many provincial administrations employed the services of national legislators as lobbyists, who then pressured the central government during the deliberation of the national budget.
"Approval of a lot of regional budgets is delayed due to the fact that the local administrations are seeking higher allocations from the GAF. That is why there are so many brokers providing such services," said Paskah after a meeting with Vice President Jusuf Kalla. A GAF allocation to a local administration cannot be disbursed until such time as its budget has been approved by the regional legislature. However, in a Catch-22 situation, local administrations claim that they cannot accelerate the adoption of their budgets as they first have to wait for the approval of the national budget.
This year, the central government has earmarked a total of Rp 145 trillion (around US$16 billion) in GAF allocations.
"It is simply unacceptable that the local administrations cannot approve their budgets in line with the adoption of the state budget in December. They are inventing reasons so as to allow them to secure higher GAF allocations with the help of brokers," said Paskah.
Paskah said that the central government normally disbursed the GAF payments to all of the regions in February, around two months after the adoption of the national budget.
Paskah should be fully au fait with the situation as he served as chairman of the House of Representatives finance commission from 1999 until 2004. He may also be able to help identify the corrupt legislators who act as brokers.
A number of legislators are currently under the spotlight after seven of their colleagues were accused of acting as middlemen who pressured government officials to secure disaster relief money for their regions.
The scam was uncovered a few weeks ago after a lawmaker was dismissed from the House for acting as a middleman in a government-funded haj-dormitory project.
The lobbyists received hefty fees for their services.
Aside from rent-seeking, some local administrations have also been accused of delaying projects after the funds had been disbursed so that they could earn interest on them by putting the money in government bonds or bank deposits.
The central bank recently discovered a staggering Rp 43 trillion in development funds that were supposed to be used for regional projects lying idle in the banking sector.