Deadline Scholar's Passages from: "Political reform and regional politics in Indonesia"** by I Ketut Putra Erawan* Asian Survey

v39, n4 (July, 1999) I. INTRODUCTION One of the most important manifestations of the reform process shaking the country has been the resurfacing of an old discourse on the proper form of the state for a country as big and complex as Indonesia.(2) Is the unitary state, in which all power is concentrated in the national government in Jakarta, the best form for dealing with Indonesia's needs? Several prominent intellectuals, social activists, and even presidential candidates have questioned the adequacy of this form of state. Breaking a long-held taboo, they argue that there is a need to consider a federal state. This bold position has in turn been fiercely challenged by defenders of unitarism. II. IMBALANCE IN REGIONAL AREAS FINANCIAL DISTRIBUTION Financial imbalance was the main characteristic of the economic dimension of center-region relations in New Order Indonesia. A region's income was derived from five sourcesOf the five sources, the proportion of income derived from central subsidies was by far the largestIn short, even though the proportion of subsidies has tended to decline, subsidies remain the main regional source of income. The second manifestation of financial imbalance is the significant variation in the rates of regional economic development. Some regions developed economically much more quickly than others. Unfortunately, the regions that grew fastest tended to be the more developed ones, while the less-developed areas (some of which are in fact rich in natural resources) grew much more slowly. In short, the analysis above indicates two characteristics of imbalance. One, the regions were heavily dependent on subsidies for finances, and two, the amount of subsidies allocated was often directly proportional to a region's contribution to the GDP rather than to its need, as might otherwise be anticipated or hoped. Accordingly, it can be said that the imbalances and changes in the pattern of fiscal allocation among regions under the Suharto government seem to have been based closely on both political and economic logic. The political logic was that more fiscal resources were allocated to those regions with large populations and where interests were assertively articulated compared to the amounts given to less assertive areas. As shown in Table 3, the percentage of central government subsidies allocated to North Sumatra, Jakarta, West Java, Central Java, and East Java - all populous and assertive areas - was relatively high. Some politically sensitive areas, such as East Timor and Irian Jaya, also received relatively significant subsidies. Some scholars believe there is a positive correlation between previous electoral support for the ruling party, Golkar, and the number of projects allocated to certain regions. According to this view, changes in the fiscal allocation pattern followed the changing pattern of support for the party.

III. POLITICAL UPHEAVAL OVER GOVERNORS. The debate over regional political autonomy was manifested in several of the 1997-98 gubernatorial elections, although there were significant variations in the dynamics of these contests. Some were peaceful; others were not. The degree and strength of support for autonomy likewise varied, as did the level of interest and willingness of particular localities to adapt the electoral process to meet their needs. The dynamics of gubernatorial elections were also colored by demands or the withdrawal of those candidates thought to be involved in corrupt practices. In Bali and West Sumatra, reformists demanded that their provinces' previous governors now serving as ministers in Habibie's cabinet step down because of malfeasance in their earlier positions. Elsewhere, demands were also made for district heads and mayors accused of corruption to resign. IV. REDISTRIBUTION OF POWER BETWEEN CENTRAL AND REGIONAL GOVERNMENT Confronted with multiple pressures to reform the relationship between the center and the regions, the central government responded by proposing and implementing several policies. These included the Second-Level Pilot program and the passage of one new law governing the regional legislatures and another on the center-regional government relationship. All of these efforts have been carefully assessed by both analysts and practitioners, and the presidential candidates are scrutinizing the policies' impact. Their assessments offer different perspectives that challenge the proposals offered by the government. The effort to shift the location of implementation or delivery of government services has serious administrative consequences. As the transfer of functions from the branches of central government departments and provincial governments to pilot areas has been implemented, the number of local government service agencies has proliferated. While this project will have significant implications with respect to administrative reform, its implementation faces several limitations. Primary among these is that the transferral of functions has not been followed by a shift of both decisionmaking authority and financial resources. Without giving second-level governments such authority, their ability to execute their new functions is limited. Some central and provincial government agencies still retain important functions. Another limitation is the lack of accountability in administrative decentralization. As Devas argues, accountability for the pilot governance project was not given to the local electorate or local legislatures; it remained in the hands of the central government. Without empowering local institutions, the very essence of the pilot project - to bring not only services but also the governance processes closer to the people - could not be implemented. While the relationship between the regional executive and legislature will be more balanced, the new law did not change the substance of inter-level, vertical relationships. The central government still has ultimate authority in virtually all matters. For example, Chapter 2 of the new law indicates that the

province is both an autonomous and an administrative entity. As an administrative apparatus, the provincial government is therefore the local representative of central authority. In previous experience, this ambivalence was the source of and justification for central political involvement in regional political and governmental affairs. In terms of gubernatorial elections, the law requires that the legislature consult the president over potential candidates (Chapter 38). The central government's involvement in such elections has more often exacerbated existing frictions than resolved them, as discussed above. V. CONCLUSION Finally, the power to create, dissolve, or merge autonomous regions is given under Chapter 115 to a central government institution, the Consultative Assembly for Autonomous Regions (DPOD, Dewan Pertimbangan Otonomi Daerah), chaired by the minister of home affairs. The finance minister will give this institution recommendations concerning various important matters affecting the regions, and the DPOD can also make changes to the center-regional financial balance. While Assembly membership will include regional representatives, they may not constitute a majority. The central government proposed two major solutions to the economic and political problems in center-regional relations. One was administrative, namely, the pilot project at the district/municipality level. This project was initially greeted with considerable skepticism, and its critics have argued that the issue is more one of balancing economic and political relations than simply relocating the service activities to another level of government. The second solution was one that may be termed institutional engineering, namely, the development of new laws covering elections and regional government. Despite their relative merits, both of these efforts have been criticized substantially for the way they reflect the vested interests of the ruling elite. On the other hand, it should also be noted that the bold counterproposal to replace the unitary state with a federal model has been an extremely controversial subject for many political actors. Clearly, achieving substantial reform in the centerregional relationship will take much time and effort. 2. A brief discussion of the historical debate between the proponents of the unitary state and the federal state is in "Otonomi Federasi: Debat Ide Negara Federasi" (Federation autonomy: Debates on the idea of a federal state), Tempo Interaktif 17:27 (January 26-February 1, 1999) on the Internet at <http://www.tempo.co.id>. 3. Budhy Tjahjati S. Soegijoko, "Perencanaan Regional dan Pembangunan Kawasan Terpadu" (Regional planning and development of integrated areas), in Budhy Tjahjati, S. Soegijoko, and B. S. Kusbiantoro, eds., Bunga Rampai Perencanaan Pembangunan di Indonesia (Mengenang Prof. Dr. Sugijanto Soegijoko) (Collections of development planning in Indonesia Remembering Prof. Dr. Sugijanto Soegijoko ) (Jakarta: Gramedia, 1997), p. 397. *I Ketut Putra Erawan is a Ph.D. candidate in the Department of Political Science, Northern Illinois University, DeKalb, Illinois. The author is grateful for the assistance of Dwight King, William Liddle, Donald Emmerson, and Takeshi Kohno. An earlier version of the paper was presented at the 51st Annual Meeting

of the Association for Asian Studies, Boston, April 1999. ** COPYRIGHT 1999 University of California Press