Regional opportunities open up as power shifts from the center
AFTER 18 MONTHS OF REGIONAL AUTONOMY INDONESIA'S REGENCIES AND PROVINCES ARE EMBRACING THEIR NEW-FOUND FREEDOM AS LOCAL PEOPLE AND LEADERS TACKLE THE ISSUES WITH ENERGY AND ENTHUSIASM

ON THE MOVE Power is devolved from Jakarta, a city of 12 million people, to the provinces.

For Americans, living in a federation of states, it is easy to understand why the modern republic of Indonesia adopted the federal system. Territorial integrity was paramount for the government when independence was gained 57 years ago.
The big difference between the United States of America and Indonesia, however, is that the former consists almost entirely of a single land mass, whereas the latter comprises more than 17,000 islands strung out in a long archipelago in the Indian and Pacific oceans.

Under its first two presidents, Sukarno and Suharto, Indonesia became a highly-centralized state. Control of the country’s resources and decision-making was concentrated in the hands of the central government in Jakarta.
But it soon became clear that it was not going to be easy for a central government to administer a nation of so many islands whose land area totals more than 741,000 sq. miles – more than 18 times the size of Virginia. With regional disparities in resources and the level of infrastructure development it was inevitable that economic growth would be uneven.

The unequal distribution of the population – which numbers more than 220 million – also meant that central government would find it difficult to maintain a standard on public services like education and welfare. Some provinces, particularly in Indonesia’s more remote regions, are sparsely populated, while the capital Jakarta is a city of more than 12 million that, when combined with other conurbations in the province of West Java, creates a metropolis of more than 35 million people.
Now Indonesia has embarked on a course of government which heralds a bold and ambitious era of democracy. Authority has been devolved to some 30 provinces and 370 regencies, giving them control over administration, public welfare and public health.

The process began on January 1 last year when two laws were enacted to establish regional autonomy and fiscal balance.
Law 22/99 provides for decentralized authority in all fields except foreign affairs, defense, security, justice, monetary and fiscal policy, religion and certain economic policy areas.
Law 25/99, permits the regions to retain 80 percent of revenues from forestry, fisheries and general mining, 15 percent from oil and 30 percent from natural gas. It allows for the re-allocation of 25 percent of the central government’s budget to the regions.

Some Indonesians worried that, as the provinces gained more autonomy, the nation would suffer the same difficulties as those of, say, the former Yugoslavia. But President Megawati Sukarnoputri emphasizes that there is an enthusiastic drive to make the much-coveted autonomy work. She also recognizes that it is impossible to manage the island nation from a single central point, and is determined that devolved power will strengthen the country’s unity.
A survey conducted by a team of researchers funded by the Asia Foundation found that more people were becoming involved in the workings of local government and that there was a new awareness among officials that democratic practices should be supported.

The survey also revealed that it is easier for local people to exercise control over their regional authority rather than the central government. This in turn has encouraged local administrations to provide transparent and
accountable governance.
In addition, the researchers found that decentralization has allowed the provinces to embark on major improvements to the quality of public services without having to wait for Jakarta’s instructions.
Currently, the central government is discussing improvements to the regional autonomy law, but the positive impact of the legislation and progress so far has more than justified the move to decentralize.