In 42 Kabupatens and Cities and 5 Provinces in Indonesia
27 38. Both these provinces did relatively well on the expenditure side during 2007-09: they were
generally within 10 of APBD-M and APBD-P spending targets.
The government of West Nusa Tenggara NTB managed to keep its SiLPA at less than 8 for the four years studied. In 2007 NTB
’s realized budget income was a mere ±1 above or below APBD-M and APBD-P targets; and its expenditure was 96 of original APBD-M projections and 92 of revised
APBD-P targets. Thus only 7 of expenditure in 2008 was financed by SiLPA from 2007. The provincial government maintained this relatively good record on revenueexpenditure levels in the
following years, making SiLPA a minor source of budget financing.
4.3 Analysis of Fiscal Space
In real terms, fiscal discretion or fiscal space
13
of provincial, kabupaten and city governments declined during the period studied. Although provinc
es’ fiscal space expanded, in nominal terms, by 5 in 2009 and 2 in 2010, it actually shrank in real terms: by 5 in 2009 and 3 in 2010. The situation was even
worse for kabupatencity governments: their fiscal space contracted constantly over the period —albeit
less in cities than in kabupatens —declining in cities by 9 in 2008 and a further 13 in 2009; and in
kabupatens by 13 in 2008 and a further 15 in 2009. The downward trend continued in 2010 at a slightly slower pace in the cities down 9 but more steeply in the kabupatens down 18.
Kabupatens and cities with large populations generally had more fiscal space than other areas studied graph 4.8. The city of Surabaya had substantial funding available for discretionary spending: almost
Rp 2.2 trillion in 2009 based on current prices. Kabupatens or cities with discretionary funds in excess of Rp 250 billion invariably had populations above 900 000 people. By contrast, kabupatens or cities
with small populations had limited fiscal space. The exception was West Lombok. In 2009 it had only Rp 96 billion worth of fiscal space, despite its population of just 800 000.
Funds available to governments studied for discretionary spending varied enormously, from as little as 8 to as much as 67 of total revenue. In the cities of Pekalongan and Banjar and the kabupatens of
North Gorontalo and Padang Panjang fiscal space represented a substantial proportion of total revenue more than 42, but the amounts of money involved were not large. By contrast, in the city of Surabaya
fiscal space was large both in monetary value and as a proportion of total revenue 68. It ranked ahead of all other regions studied on both those counts, followed in second place by the city of Pekanbaru.
Graph 4.8 Kabupatens’ and Cities’ Fiscal Space in 2009 as a Proportion of Total Revenue
This graph is available only in the Indonesian text of this publication Source: APBD-Rs for 2009, processed by the LBS team.
Among the 5 provincial governments studied, East Java and West Java outperformed the other three in terms of fiscal space both in monetary terms and as a proportion of total revenue. In 2009 these two
most densely populated provinces had fiscal space at the provincial government level, valued at Rp 6.7 trillion
—86-87 of total revenue at constant 2007 prices. The governments of South Sumatera and Central Java had almost identical proportions of fiscal space: but South Sumatera
’s amounted to 41 less money than
Central Java’s. West Nusa Tenggara had limited fiscal space: just Rp 815 billion 69 of total revenue.
13
Fiscal space refers to the amount of funding not part of earmarked expenditure programs which is available to a government for spending at its own discretion. Fiscal space is total revenue minus special purpose funding
—
DAK, grants, emergency funding, adjustment funding and special autonomy funding
– and non-discretionary expenditure civil service costs and payment of interest on loans.
In 42 Kabupatens and Cities and 5 Provinces in Indonesia
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5. Analysis of Local Infrastructure Budgets
