1 / 24

14. Regional Autonomy and Fiscal Decentralization in Indonesia

14. Regional Autonomy and Fiscal Decentralization in Indonesia. 14.1 . Underlying Forces for Implementation of Regional Autonomy and Fiscal Decentralization. Growing Dissatisfaction on Sentralistic Government System Central Government “exploit ” regions

jethel
Download Presentation

14. Regional Autonomy and Fiscal Decentralization in Indonesia

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 14. Regional Autonomy and Fiscal Decentralization in Indonesia

  2. 14.1. Underlying Forces for Implementation of Regional Autonomy and Fiscal Decentralization

  3. Growing Dissatisfaction on Sentralistic Government System • Central Government “exploit ” regions Unfair distribution of revenue from exploitation of natural resources • Top-down approach in development • Unequal development  Java > Outer Java

  4. Revenues from mining, especially mining declines from time to time,  Impossible to continue dependency of regions on the central government’s financial assistance  Sharing financial responsibility needs to promote • Political reformation  Open way for citizens for participating in process of politic and development. Centralistic system of government did not fit with

  5. Economic globalization  Exploitation of local comparative advantages for global competition

  6. 14.2. Legal Foundation • “UU No.22 Tahun 1999” about local government • “UU No.25 Tahun1999” about sharing of financial responsibility between the central and local governments • Thus, Regional Autonomy and Fiscal decentralization policy contains  distribution of governmental authority  sharing of financial responsibility

  7. 14.3. Authority of Local Government

  8. Include all matters, except : • Foreign Policies • System of legal trials • Monetary and fiscal policies • Religion affairs • Defense and internal security • Macro development

  9. But, local government has authority in such matters as • management of local natural resources and environment • administrations of local affairs • regulation of use of local space • enforcement of local regulations (PERDA) • provision of local public goods, such as management of local wastes, local roads and local parks

  10. 14.4. Local Fiscals

  11. Sources of Local Finance • Revenues generated locally (PAD) • Sharing Funds • Borrowings • Other sources

  12. Revenues generated locally (PAD) • Local taxes • Retributions • Profits from local public firms • Etc

  13. Sharing Funds • Share of local government on Tax on Building and Land (PBB), tax on transaction of land and building and natural resources’ exploitation • General Allocation Fund (DAU) • Specific Allocation Fund (DAK)

  14. Tabel 1: Sharing of Fund between The Central Government and Regional (Provincial) Governments According to “UU 25 Tahun1999”

  15. Tabel 2: : Sharing of Fund between The Central Government and Districts Governments According to “UU 25 Tahun 1999”

  16. 14.5. Facts of Sharing of Funds between The Central and Regional Governments

  17. Table 1: Allocation of Fund from the Central Government to Regional Governments in Years 2005-2008 Sumber: Laporan Keuangan Pemerintah Pusat (LKPP) *) Tidak termasuk dana otonomi khusus (untuk Provinsi Aceh dan Papua) dan dana cadangan

  18. Table 2: Actual Revenues of Provincial Government in 2003 - 2005 Sumber: Badan Pusat Statistik (diolah)

  19. Tabel 3: Actual Revenues of Districts Governments in 2003 - 2005 Sumber: Badan Pusat Statistik (diolah)

  20. 14.6. Potential Advantages • Public service and public goods will be more suitable for local needs • More effective control of publics on the governments • Better development at local level

  21. 14.7. Potential Disadvantages (1) • Weak coordination between the central and regional governments may prevail when dealing with national development issues, such as food security, poverty alleviation

  22. 14.7. Potential Disadvantages (2) • Potential abuse of power by local governments in generating revenues locally (PAD) • Emergence of local regulations may be in contradiction with the national constitution (UUD 1945) and other national laws • Emergence of regional sentiment

  23. 14.8. Readings (1) Badan Pendidikan dan Pelatihan Keuangan, Departemen Keuangan Rep. Indonesia. 2004. Dasar-Dasar Keuangan Publik. Jakarta: Badan Pendidikan dan Pelatihan Keuangan, Departemen Keuangan Rep. Indonesia. Chapters 13-21.

  24. 14.8. Readings (2) Suparmoko, M. 2001. Ekonomi Publik untuk Keuangan dan Pembangunan Daerah. (Chapters 1,2,3,4) H.A.W. Wijaya. 2001. Otonomi Daerah. Jakarta: PT RajaGrafindo Persada. (Chapters 5, 13,16)

More Related