What is regional autonomy?

Down to Earth No. 46, August 2000

In Indonesia, regional autonomy (otonomi daerah, or "Otda") is a loose term used by government ministers and the media usually to describe transfer of authority and functions from central to regional government, as set out in Law No 22 of 1999. Because the term is used so loosely there is often confusion between devolution of authority - government by the region - and delegation of authority - government in the region. Also, because the public debate has been stifled for so long, the term "regional autonomy" has never been unbundled from the closely associated issues of federalism, local democracy and the impact of the economic crisis.

Laws 22 and 25, 1999

Law 22, 1999 on Regional Governance and its partner, Law No.25, 1999 on the Fiscal Balance Between the Central Government and the Regions set out the framework for transferring responsibilities and human and financial resources from central government to the regions.

Here, the term 'regional autonomy' is defined as "the authority of an Autonomous Region to govern and administer the interests of the local people according to its own initiatives based on the people's aspirations in accordance with the prevailing laws and regulations." (Clause 1h).

Under the laws, regional autonomy is expected to give these areas greater powers and responsibilities over the use of 'national assets' and to change the financial relationship between central and local governments. According to the Explanatory Notes to Law 22, this should be implemented "along democratic lines; with community participation, equity and justice and taking into account the diversity and potential of the regions." It is also meant to "empower local communities and stimulate creativity." (p.54). Throughout the Law, references are made to maintaining the unity of the Republic, promoting economic development and respecting the sovereignty of the people.

Law 22 states that the authority of autonomous areas covers "all fields of governance", except international policies, defence and security, the judiciary, monetary and fiscal matters and religion. Central government retains the authority over policy-making in many areas including natural resources utilisation and national planning.

"Autonomous areas" are defined by the Law as Provinces, Districts (Kabupatens) and Municipalities. The relationship between these is non-hierarchical - a break with the highly tiered system of the past.

Provinces retain their role as part of the central government's regional administrative structure as well as being autonomous areas - one area of the law where the line between central and regional powers can be easily blurred.

The emphasis on decentralisation of authority to the Kabupatens, of which there are around 300, rather than the provinces, of which there are 27*, was designed to avoid encouraging separatist tendencies which might be more prominent at provincial level.

Under Law 22, regional heads at both province and district level are to be selected by local assemblies and are accountable to these. Provincial governors, who are selected in consultation with the Jakarta, have a dual role because they continue to represent the centre in the regions as well as fulfilling the role of autonomous area head. District heads (bupati), however, no longer act as representatives of the centre. The role of local parliaments increases greatly, with the responsibility for drawing up local regulations and budgets based on what their local electorates want.

Law No. 25/1999 also sets out in some detail the division of financial income and responsibilities between central and local government. The levels of tax and levies will continue to be set by national legislation.

Regulation 25/2000

Nearly all Indonesian laws depend on subsequent 'operating regulations' and ministerial or presidential decisions to determine exactly how they are implemented. For Laws 22 and 25 the main operating regulation is No. 25/2000 on the Authority of the Government and the Authority of Provinces as Autonomous Areas, passed by the Wahid government in May 2000.

This regulation sets out the aspects of government that are to remain under the control of central government and the authority of the provinces. It does not give details of the authority of district level governments. According to the explanatory notes accompanying the regulation, the authority of the districts and municipalities are not included, because law 22/1999 "basically releases all authority of central government to the districts/municipalities" and the regulation just covers the exceptions.

The timetable for implementation is very short, scheduled to start in January 2001 with all changes due to be in place by June 2001. However, the legislative process is still far from complete. There are eight regulations related to implementing laws 22 and 25 due for completion in September. These include a regulation which will rule on the levies and taxes regional administrations can set and a new regulation on mining. (Jakarta Post 20/June/00)

Apart from these, there are an estimated 1,200 regulations that need to be amended or abolished before the laws can be fully implemented.

Further aspects of the laws and regulation are discussed later in this newsletter.

*The division of Maluku into two provinces brings the total back to 27 after East Timor's independence.
 

Key points in the regional autonomy debate

The main questions asked about regional autonomy are: what degree of local autonomy is central government offering? Will regional autonomy actually go ahead and if so, when will it be implemented, who will control the process and what will the impact be?

Discussions on regional autonomy have tended to concentrate on:

• definitions and interpretations of what the new laws and regulations actually mean;
• whether or not some measure of control really will be transferred to local governments and if so, how will power be divided between provinces or districts/municipalities;
• the process: how the laws have been drafted, consultations with civil society (or lack of them);
• the likely impacts of laws and regulations; positive and negative; at national level (their succes or otherwise in preventing the 'disintegration' of Indonesia) and regional levels;
• the "readiness" or not of regions for autonomy and the state of democracy in Indonesia;
• the demands from communities in the regions - an alternative, "bottom-up" implementation strategy.

The impact and progress of implementing regional autonomy cannot be separated from the economic and political uncertainties facing Indonesia. These will be crucial in determining the direction and chances of success for regional autonomy. Important concerns include:

• the economic crisis and the position of the IMF-led creditor group;
• the political situation: the perceived weakness of the Wahid government, unrest in Maluku and elsewhere and the possibility of a military or Suharto clique backlash;
• Jakarta's refusal to countenance independence as an option for West Papua or Aceh;
• the attitude and potential influence of foreign investors.