Camelia Pasandaran – The Ministry of Home Affairs on Friday said it was examining the effectiveness of decentralization and preparing new rules on how regions should manage their finances.
The announcement comes amid rising concerns about the impact of giving greater autonomy to regional authorities. The Law on Regional Autonomy, adopted by the government in 2004, provided the legal basis for local authorities to manage their own budgets, as part of efforts to accelerate development in the regions.
More regions are trying to benefit from the policy, which has led to the establishment of 205 new regional administrative entities, including provinces, districts and municipalities.
However, the policy has come under fire following the claims of some officials that it has failed to spur regional development.
Former Home Affairs Minister Ryaas Rasyid, one of the architects of regional autonomy, recently said that the prosperity promised to many regions had failed to materialize. "Poverty rates have not dropped significantly and the unemployment rate has increased," he said.
President Susilo Bambang Yudhoyono also indicated his displeasure over decentralization during his budget presentation to the House of Representatives this month, when he called for a moratorium on the establishment of new regions.
Further, the Supreme Audit Agency (BPK) this week told the government that only eight of 500-plus autonomous regions had produced positive financial reports.
Ministry of Home Affairs spokesman Saut Situmorang said on Friday that the government now planned to evaluate the effectiveness of the policy in the newly created regions.
"Based on the results of that evaluation, the ministry will offer them training and supervision, especially in financial management," Saut said.
He also said the ministry would review demands for autonomy from several proposed regions. "We're developing a master plan on the ideal number of regions in Indonesia for the next 15 years," he said. "It will take into account economic, geographic, social and cultural factors."
Saut said that the ministry also planned to issue regulations on financial management in newly established regions.
Bambang Brodjonegoro, dean of economics at the University of Indonesia, said on Friday that demands for regional autonomy should be temporarily put aside until the government finished evaluating all of the country's newly established regions.
He said this would give the government enough time to evaluate the current policy. "Take a break for five years to evaluate whether the regions can be managed properly," he said.
Bambang said that older provinces, districts and municipalities should also be reviewed.
"If they have not performed well, the regions must not be divided again, or they should be [dissolved]," he said. "Budget allocations need to be reviewed. They should be reviewed by local people to determine if their needs have been met."
Financial management is a problem, he said. The government should evaluate public services at the regional level, he added. "There should be minimum standards for public services,"he said.
Sofjan Wanandi, chairman of the board of trustees for Regional Autonomy Watch (KPPO), said that regional autonomy had been a failure. He said that declining regional economic growth simply highlighted these failures.
"According to our survey, only 10 percent to 15 percent of about 500 districts and municipalities have developed successfully," he said on Thursday.
The central government should work together with regional authorities to help meet the objectives of regional autonomy, Sofjan said.