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Decentralization and Regional Autonomy in Indonesia

Implementation and Challenges

Coen J G Holtzappel and Martin Ramstedt

Publication Year: 2009

In 1999, Indonesia embarked on a reform of regional governance that brings self-governance to rural districts and municipalities, i.e., the administrative and democratic capacity needed to apply basic services like healthcare, national legislation and environment policies. This edited volume is the first book, which not only deals with the 1999 legislation but also shows how the deficiencies and contradictions of this legislation reduced implementation between 2001 and 2004 to a try-out. The book also discusses the adaptations that were the focus of the debate on the revision of the 1999 legislation that resulted in the 2004 update legislation and the amendment of the 1945 Constitution. Anthropological case studies of five provinces complement and deepen the findings of the more general survey reports.

Published by: ISEAS–Yusof Ishak Institute

Title Page, Copyright Page

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Table of Contents

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pp. v-vii

List of Tables

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pp. viii-ix

List of Figures

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pp. x

List of Maps

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pp. xi

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pp. xiii

The compilation of the anthology greatly benefited from the intense and continual oral and written exchange between the contributors and the two editors. The result is a coherent line of reasoning which runs through the whole book and turns each chapter into a necessary, well-integrated part of the whole. We are deeply grateful to Mohammad Sadli who actually planted the seeds for the whole project. ...

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List of Contributors

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pp. xv-xxii

Adi Abidin holds a B.A. in comparative politics from Northern Illinois University and has been deeply involved in the implementation of the 1999 legislation on decentralization and regional autonomy in various capacities. He was programme officer for the unit “Decentralization and Local Government” at The Asia Foundation in Jakarta where he was engaged in the implementation of the Indonesia Rapid Decentralization ...

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pp. xxiii-xxviii

After the fall of Suharto in May 1998, an instantaneous wave of publications endeavoured to come to grips with what was going on under the label of “reformasi”, by taking stock with the achievements and failures of the rapidly waning New Order institutions. The first book in the English language to exclusively address the intricacies of the various processes of decentralization ...

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Introduction: The Regional Governance Reformin Indonesia, 1999-2004

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pp. 1-56

In 1999, interim President B.J. Habibie initiated an ambitious reform of Indonesia’s regional autonomy based on of the decision of the 1998 People’s Congress No. XV on the reorganization of regional autonomy. It provides rural districts (kabupaten) and municipalities (kota) with the freedom to regulate their internal as well as their external affairs with the consent of the provincial ...


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1. When the Burden is Shouldered Alone: Experiences in Autonomy at Regencies and Municipalities

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pp. 59-74

In the period of 2001–03, many independent steps were taken in regencies and cities to put decentralization into effect, including those which represent initiatives of regency or city governments, the Regional Representative Council (DPRD) and the various communities. The three quotations noted in the following boxes are a small sample to give a picture of such governmental initiatives. ...

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2. Indonesia’s Transition to Decentralized Governance: Evolution at the Local Level,

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pp. 75-98

In 2003, Indonesia’s decentralization reform was in its third year of implementation. The “big bang” start had marked the transfer of resources — assets, personnel and finances — to the regions to compensate for the newly added authorities and functions. While the speed and size of the changes to formal structure was phenomenal, the adjustment of non-formal ...

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3. Corruption and Decentralization

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pp. 99-113

Indonesia is rapidly moving from a highly centralized system of government to a largely decentralized one (World Bank 2003a). Law No. 22/1999 on Regional Governance devolves most functions except for national defence, international relations, justice, police, monetary policy, religion, and finance. The local governments are obliged to perform a set of key functions, including health, education, environmental ...

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4. The Role and Function of the Regional People’s Representative Council (DPRD): A Juridical Study

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pp. 114-144

The Implementation of Regional Autonomy according to Law No. 22/1999 (UU 22/1999) concerning local government has provided a new direction for managing decentralization. It has also entailed a complete overhaul of legal products that existed before it, specifically those that regulated regional autonomy. This study represents the first piece of research carried out by the ...

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5. Regional Autonomy, Regulatory Reform, and the Business Climate

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pp. 145-149

During the Conference organized by USAID-PEG and the Ministry of Industry and Commerce (Departemen Perindustrian dan Perdagangan) convened at Hotel Borobudur in Jakarta on 13 August 2003, a lot of complaints were heard, supported by surveys of credible research institutions, as regards new taxes, user charges (retribusi) and other levies that had been extracted by provinces, districts and municipalities ...

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6. Decentralization, Regulatory Reform, and the Business Climate

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pp. 150-182

This chapter examines the many regulatory problems in local government in Indonesia and proposes simple models for regulatory reform. From the outset, it is important to stress that decentralization is not the major cause of regulatory problems in the regions. Many of the problems discussed in this chapter represent nothing new and have been documented elsewhere. For ...

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7. Small Enterprises and Decentralization: Some Lessons from Java

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pp. 183-195

In Indonesia, decentralization means more responsibility for provincial and district (kabupaten/kota) authorities in the formulation and implementation of a wide range of services and programmes including small enterprise development. This chapter concentrates on small and medium-scale manufacturing enterprises (SMEs). The provincial and district governments ...

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8. Fiscal Decentralization and Its Impact on Regional Economic Development and Fiscal Sustainability

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pp. 196-221

During the time leading up to the second general elections of 2004, the issue of decentralization and regional autonomy had not been widely considered as a critical issue in nation-building, and hence failed to become a major issue in platform-building by the major political parties. There could be many causes for this development. First, the process might have been considered as quite successful. ...

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9. Origin and Development of the Urban Municipality in Indonesia

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pp. 222-242

The meaning attached to the city is placed centrally in the works of Castells. According to him, cities are liable to change because all sorts of parties are permanently struggling over the meaning the city should have. He defines “urban meaning” as “the structural performance assigned as a goal to cities in general (and to a particular city in the inter-urban division of labor) by the conflictive process between historical actors in a given society”. ...


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10. Regional Autonomy and the Issue of Land Rights: The Case of the PT CPM Mine in Central Sulawesi

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pp. 245-255

The issuance of Law No. 22/1999 and Law No. 25/1999 resulted in the opening of more forests for mining activities. Since 2001, there are intense complaints by local communities about their land — mostly forest land — having been taken away from them. This has frequently generated conflict. The state, however, has not recognized the customary rights of the indigenous communities who live in this area. ...

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11. Reshaping Tana Toraja: A Century of Decentralization and Power Politics in the Highlands of South Sulawesi

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pp. 256-292

This quotation of an American anthropologist is referring to the political situation that prevailed at the beginning of the 1970s in Tana Toraja, a regency or district (kabupaten) in the province of South Sulawesi. After a long period of depoliticizing local customs and tradition by the New Order regime,1 it is not surprising that the Indonesian decentralization laws of 1999 ...

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12. Recentralization and Decentralization in West Sumatra

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pp. 293-328

When in 1999, decentralization policies were being developed in post-Suharto Indonesia,1 West Sumatra was the first province that set out to restructure its administration. The region has received much attention for this, but it became particularly famous because it immediately used the opportunity provided by Law No. 22/1999 to reorganize village government. The territorial ...

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13. Regional Autonomy and Its Discontents: The Case of Post-New Order Bali

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pp. 329-379

Habibie’s 1999 governance reform — implemented and revised during the legislatures of Abdurrahman Wahid and Megawati Sukarnoputri, and supported by international donor agencies such as the Asian Development Bank, the World Bank, the German GTZ (that is, Gesellschaft für Technische Zusammenarbeit or Society for Technical Cooperation), the United Nations Development Programme, ...

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14. Reflections on the Development of Intellectual Property Rights Legislation: An Account from Riau

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pp. 380-387

If we look back at the past six years of the present reform era, we recall that B.J. Habibie’s rise to presidency was highly controversial, due to the fact that he had come to this office as vice-president of the last cabinet under Suharto’s regime. Many high-ranking reform politicians in Jakarta therefore opposed Habibie’s succession of Suharto as president. However, on 21 May 1998, he ...

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15. Global Spread and Local Fractioning: Indigenous Knowledge and the Commoditization of Livelihood Resources in the Growth Triangle

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pp. 388-409

In this era of revolutionary changes, processes of transnationalization are seen as re-structuring spatial relations to form a borderless world or “space of flows” (Castells 1989; 1993; 1996). Such processes have led to innumerable political choices and state decisions to embark on respective development programmes so designed as to facilitate an entry into what is perceived as the ...


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pp. 411-432

IIAS/ISEAS Series on Asia

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E-ISBN-13: 9789812308214
Print-ISBN-13: 9789812308207

Page Count: 433
Publication Year: 2009

Edition: 1