Executive summary IGI bahasa inggris Rev

Governing Indonesia From The Regions

Executive Summary of Indonesia Governance Index 2014

Executive Summary of Indonesia Governance Index 2014 1

Governing Indonesia From The Regions

Executive Summary of Indonesia Governance Index 2014

Writers and Editor:

Abdul Malik Gismar Lenny Hidayat Inda Loekman Dadan S. Suharmawijaya Nicolaus Harjanto Hery Sulistio Ahmad Fawaiq S. Arif Nurdiansah Amalia Fubani Sitanggang Fitrya Ardziyani Nuril Riana Ekawati

Layout dan Design:

Zulikar Arief ISBN: 978-602-1616-29-1

Cetakan Pertama, Oktober 2014 oleh Astana Communication Copyright ©2014 The Partnership for Governance Reform (Kemitraan) Jl. Wolter Monginsidi No. 3, Kebayoran Baru, Jakarta Selatan 12110 Indonesia

Materi dari publikasi ini dapat diproduksi ulang untuk tujuan non-komersial (silahkan kirim salinan kepada infoigi@kemitraan.or.id). Segala bentuk produksi ulang dengan cara apapun untuk tujuan komersial harus mendapatkan izin dari The Partnership for Governance Reform (Kemitraan).

Published by:

Kemitraan bagi Pembaruan Tata Pemerintahan (The Partnership for Governance Reform) Jl. Wolter Monginsidi No. 3, Kebayoran Baru Jakarta Selatan 12110 Telp. 021-7279-9566, Fax. 021-7250-260/7204-916 Website: www.kemitraan.or.id; www.kemitraan.or.id/igi

Supported by:

Australian Government, Department of Foreign Afairs and Trade

Governing Indonesia From The Regions

List of Abbreviations

APBD : Provincial/District Local Budget DAK

: Special Allocation Fund DAU

: General Allocation Fund DFAT : Department of Foreign Afairs and Trade DOB

: New Autonomous Region DPR

: House of Representatives DPRD

: Council of Regional Representatives EDOB

: Evaluation of New Autonomous Region EKPPD

: Performance Evaluation of the Regional Administration HDI : Human Development Index IGI : Indonesia Governance Index IKK

: Construction Cost Index IPM

: Human Development Index Kemendagri

: Ministry of Domestic Afair KPU

: The General Elections Commission KPUD

: The Regional General Elections Commission KRC : Knowledge and Resource Centre LSM

: Non-governmental organization OMS

: Civil Society Organization PAD

: Local Revenues Parpol

: Political Party Pemilu

: General Election Pemprov

: Provincial Government Pilkada

: Regional Election Pilpres

: Presidential Election Prolegda

: Regional Legislation Program PNS

: Civil Servant RI

: Republic of Indonesia SDA

: Natural Resources SDM

: Human Resources Sekwan

: Local Parliament Secretariate SKPD

: Local Oice/Agency SPM

: Minimum Service Standard TTU

: North Central Timor UU

: Law

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Foreword from the Executive Director

Kemitraan’s mission is to broadly disseminate, promote and institutionalize principles of good and clean governance to government actors, civil society elements, and business community by ensuring the enforcement of human rights, implementation of gender equality, as well as provision of support to marginalized groups and establishment of environmental sustainability.

To achieve this, since its inception at the beginning of Reformasi, Kemitraan has been consistently playing a supervisory role and actively supporting changes and innovations in the transformation of governance in Indonesia. Its national scope, its impartiality and robust network have made Kemitraan an important player in issues related to governance.

Indonesia Governance Index (IGI) is an initiative of Kemitraan which constitutes a tangible contribution to improve governance in Indonesia. IGI was irst initiated in 2007 in an efort to measure the impact of governance reform program in various regions. Assessment at the provincial level in Indonesia has been done both in 2008 and 2012. However, these results have yet represented the complete picture of local governance in Indonesia, as the assessment did not include district level. The decentralization policy and local autonomy applied in Indonesia have positioned districts and municipalities as frontliners in bringing welfare to the people. Considering this huge authority the districts and municipalities bear in managing public services, measuring governance at this level has become an urgent matter.

In an efort to provide a picture that shows the state of governance at district and city level, since the irst semester of 2014, Kemitraan has begun to develop assessment model in 34 districts/municipalities. The indings from this assessment are presented in this executive summary.

I would like to humbly and sincerely express my gratitude to all District Heads/Mayors and all their staf who have helped us in the data collection. I would also thank the team of researchers of IGI and KRC (Knowledge & Resource Center) and our researchers in all research sites who have worked very hard to inalize IGI.

On this occasion, I also would like to thank the Australian Government Department of Foreign Afairs and Trade for providing the funding to support IGI.

Governing Indonesia From The Regions

To conclude, it is our hope and wish that the data and information herein presented can provide beneits and reference for us to further improve governance in Indonesia in the future.

Jakarta, October 14, 2014

Wicaksono Sarosa, Ph.D Executive Director of Kemitraan

Executive Summary of Indonesia Governance Index 2014 7

Background

Decentralization and local autonomy policies which arose pursuant to the 1998 reform have introduced a fundamental change, particularly to the functions and authority of local governments. This policy is expected to bring services closer to the people, while improving the quality. It is expected that local stakeholders will have ample space to intensively participate in the formulation of local policies and regulations.

However, those expectations seem to remain unfulilled. The success rate of decentralization in reality varies from one region to another, depending on the quality of the governance performed by a local government, as well as the capacity of the relevant stakeholders in the respective region. This also afects the level of welfare in the regions, thereby creating relatively wide discrepancy among regions in Indonesia.

Indonesia Governance Index (IGI) was irst initiated by Partnership for Governance Reform (Kemitraan) in 2007, aiming to contribute to the betterment of development

governance in this country. IGI helps identify and map aspects of development that need to be put under careful scrutiny. Building a comprehensive governance-related database, IGI helps map key factors determining establishment of social welfare that is well distributed from West to East.

Assessment at the provincial level was conducted by Kemitraan in 2008 and 2012 in all provinces in Indonesia. The indings arising thereof have been used by the government, both at national as well as sub-national level as reference for improvement.

Starting from 2013, Kemitraan started to establish an assessment model for district/city level, recognizing that the true spirit of decentralization is actually embodied within disctricts/municipalities, along with the large authorities they have been mandated with to provide public services.

Since the beginning of 2014, assessment was carried out in 11 municipalities and

23 districts spread out in all provinces in Indonesia (with 1 district/1 city selected in each province as pilot site). Using Human Development Index (HDI) as basis for selection, districts and municipalities were selected to represent high, medium and low HDI. Another criteria to select the pilot sites was Performance Evaluation of the Local Goverment (EKPPD) issued by Ministry of Home Afairs, aimed at measuring the efectiveness of local leadership.

Governing Indonesia From The Regions

Applying 125 indicators which consist of 30 public documents, perception- based questionnaires to selected respondents, and researcher’s scoring card on accessibility testing towards various public documents, IGI measures the four

arenas’ political oicials, bureaucracy, civil society, and economic society— performance comprehensively. Each arena is assessed against six principles of good governance—participation, fairness, transparency, accountability, eiciency and efectiveness.

Public Participation = Government’s Social Capital

Decentralization has undeniably resulted in the birth of local leaders who have proven to bring development to their own region and to other regions, as well as positioning themselves at top rank quality of governance. Decentralization and democracy can proudly take the credits of having delivered the new generation of state leaders to Indonesia.

Nevertheless, IGI inds that good leaders are not enough, solid parliament and strong civil society are a necessity. Therefore, the success of a region depends very much on how all resources can be managed by the four governance actors who work as one integrated team. Local Parliament makes policies and oversees implementation, while Local Head and its bureaucracies implement the policies. Public, on the other hand, participate and supervise. This is why governance is an integrated issue, not solely

attributed to the government.

In reality, IGI Team inds that in the regions, governance was generally perceived as something that existed only within the government domain, not related to public domain. This is due to the perception of the political oicials and bureaucrates that governance issues are their sole “domestic and private afairs” which need to be kept secret, not subject to public disclosure. This inding certainly became a major constraint to the efective implementation of Law on Public Information Disclosure enacted by the national government and acknowledged by local governments.

Diferently to the perception above, Kemitraan believes that public participation in governance should neither be seen as an enemy, nor a taboo. Managed properly, this will constitute social capital for the government to help support the local development. On the other hand, the public needs to be prepared to build positive interactions. There are regions which still needing advocacy, while more stable regions need to focus on establishing productive rather than counter productive interactions. This view tends

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Comparative Analysis of Local Governance

IGI 2012 found that provincial governance‘s performance score has improved compare to four years earlier, i.e. in 2008. The average score of 5.1 in 2008 had increased to 5.7 in 2012, showed an increase of 0.6 index point. This shows a general trend that the quality of governance has slightly improved, and this can be as starting point towards something more substantial, i.e. good distribution of welfare.

Using this crucial moment of change, IGI intends to reemphasize each governance stakeholder’s mandates and functions as set forth by laws and regulations. However, in the absence of an assessment tool that can assess comprehensively, it is not easy for both the government and the people to know which functions have been well implemented and which should be reinforced, or where should we start the improvement, as there is no adequate information to conclude. The imbalanced relations between the government and the people that currently prevail reiterate this situation. Relationships which are formed are those transactional, centralized to political elites, closed or even counter productive in nature. With a map, depicting the “anatomy” of the regions, we can identify which point and which actors should be involved when we intend to start implementing changes.

Unveiling the Local Governance

Through 125 indicators, IGI indings in 34 districts/cities shows that in general, governance at this level appeared to be low (with the average score of 4.92,

from the scale of 1 to 10). This proves that both government 1 and the society 2 have not collectively made relection to advance their region 3 . On the other hand, other elements, such as the Central Government and National Parliament (DPR RI), have

1 Government here means all elements of state including elected oicials, i.e. Local Heads and Local Parliaments, and Bu-

reaucracies who implementi policies (SKPD).

2 Society consists of civilsociety (i.e. all forms of mass organizations including NGOs, universities, media) and economic

society (business associations).

3 Government (DPRD, Regional Head and Bureaucracy) contributed 62% of the governance performance, while the society

(civil and economic) contributed 38%. Good governance can be achieved if and only if the government and the society could work together.

Governing Indonesia From The Regions Governing Indonesia From The Regions

(IGI Provincial vs & District/City Level)

problem. Surprisingly, political oice found as

the institution actually pulls down the quality of local governance, whether at provincial or district level, mainly the local parliament.

The efect is huge. Local governments have become irresponsive toward the needs of the public, since the oversight and recommending functions (of the local parliaments) are almost non-existence, while their mandate is to ensure suicient budgets can directly reach the public. For example through suicient allocations for basic education, health poverty alleviation at district/city level which can respond to the needs of the people. The absence of efective mechanism of check and balance as the key factor in

a democratic system has led to the poor performance of local governance. This matter should be urgently addressed.

One of the most concerning issues is the widening public service gap. An extreme example is shown in the disparity of length of school between boys and girls in district/ city level. In Sampang, average length of boys’ school is 5 years, while girls only 4 years. On the contrary, the city of Banda Aceh has fully achieved the implementation of 12 years of compulsory education. Similar case also occurs in other sectors througout Indonesia, such as in health, poverty reduction and women empowerment programs.

The above facts have strongly indicated that government and state must be present to ensure that parents are able to put their children to school; people can access good and afordable health services, and women can be properly empowered.

In reality, government often prioritized to build their luxurious oices, vehicles, while bureaucrats are more focusing on how to spend all budget allocation so that they are not punished by budget cuts in the following iscal year. This assumption is based on the ability to spend money rather than quality delivered.

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Graph 2. Length of School Disparity Between Boys and Girls in 34 Districts/Cities 2014

Photo 1. Students riding bicycle to cross the Dutch bridge heritage above the irrigation, to go to school at Bolon Village, Karanganyar, Central Java.

Governing Indonesia From The Regions

Meanwhile, many parliament members seem to be oblivious of what should be their main responsibilities and functions. They prefer travelling to Jakarta, or even overseas to do the so called “comparative study”. Very seldom do they appear among their constituents. This is contradictory to their primary function which is to listen to their people and in return to channel their aspirations. But the question remains, if it is diicult to even meet them, how can constituent be able to have the chance to express their problems to their representatives .

Facing by so many problems in their region, people are often feeling dissatisied. As a result, they express their dissatifaction on street (demonstration). When their demands are not fulilled, they tend to be anarchic which potentially inlicted greater loss to the public. To cool down the situation, oicials usually release a statement and make promises, and by doing so they consider that the problems have been properly addressed. Gradually people forget about their demands because they are simply exhausted and they need to go back to their daily routines.

IGI sees that these cases exist because there are lack of positive interactions and

coordinations between government and the people. The four main actors in local governance seem to walk in their own world, having very diferent understanding and level of information. This can be seen, for example, from how voting mechanism is often used to make decisions at the parliament, simply because parliament members tend to see it as the implementation of the the fourth tenet of Pancasila, which says “Democracy lead by the inner wisdom in the unanimity arising out of deliberations amongst representatives” (or in Indonesian: “Kerakyatan Yang Dipimpin oleh Hikmat Kebijaksanaan, Dalam Permusyawaratan dan Perwakilan”). This principle should actually

be implemented by optimizing performance and transparency of all members of parliament in serving the people they represent throughout their entire oice term, not only by voting system.

In this context, IGI tries to emphasize all governance actors and reiterate their functions and roles. Based on concrete data and evidence, IGI provides a picture of the performance of local governance which allows the regions to be benchmarked against one another. Although many analysis can be conducted, IGI intends to focus on alternative recommendations constructed based on the general and speciic trends identiied in 34 districts/cities by unveiling the key factors which enable changes in the regions.

Executive Summary of Indonesia Governance Index 2014 13

Seven Recommendations to Govern Indonesia from the Regions

Governing Indonesia From The Regions

1. Evaluation of the Central-Regional Policy Relations

IGI Findings:

Consequently to decentralization, central government policies signiicantly afect the region’s development capacity. Large number of important afairs which inluence the overall regional performance are highly depend on the national policies. Among the very crucial and urgent issues to evaluate are Law Number 33 of Year 2004 concerning Central-

Region Fiscal Transfers 4 /Budget Transfer (preceded by Law Number 17/2003 regarding

State Finance), policy on recruitment of civil servants, mining regulations, and other critical issues. The evaluation of these issues is crucial due to the fact that local fund resources are already tight and could not provide further space to increase their local resources.

The issue of Fiscal transfer is crucial because Local Revenue (PAD) expected to help the development of a region apparently only contribute on average 9-10% of the total

APBD 5 , 90% of which still relies on Central-Region Fiscal Transfer.

The current formula to calculate DAU (General Allocation Fund) is not responsive to the needs of the people as factors taking into account

in the formula is merely based on physical capacity of the regions 6

without considering regional performance. This tend to make regions to neglect performance improvement and only focusing on increasing the number of civil

servants (PNS) to maintain DAU amount. Among the 5 factors, i.e. population, size of area, HDI, economic growth and Construction Price Index (IKK), three factors actually have shown reversed correlations. The higher the HDI and the economic growth are, the lower the DAU will be, and the more populated a region is, more “punishment” in terms of lower DAU will be applied.

As consequence to the above, the only way to maintain the allocation of DAU 7 is through recruitment of civil servants. This motivates regions to always recruit and increase the number of their civil servants, without carefully anaylizing workloads, and improving their evaluation and appraisal system. As a result, the increase the number

4 Balance fund is fund transfer from the state budget allocated to the regions to inance the needs of the region in implementation of decentralization.

5 PAD’s contribution to the budget ranges between 3-18% 6 There are 5 factors in determining formula of DAU and DAK ie population, size of area, HDI, economic growth and Construc-

tion Price Index (IKK). The basic assumption of the DAU and DAK calculation formula, agreed upon by all economists Indo- nesia in 2004, is to increase the number of civil servantsthat will increase the market potential in the area. Through market, it enables good investment climate and at the end regions will create incentive to increase local investment and receive revenue (PAD). The ideal benchmark is DKI Jakarta where its local revenue contributed to 70% of the total budget. However seeing , the widening gap, it’s time for DAU formula to be evaluated in accordance with the changing conditions.

7 DAU is set based on the Basic Allocations which are the PNS salary in the region and the iscal space.

Executive Summary of Indonesia Governance Index 2014 15 Executive Summary of Indonesia Governance Index 2014 15

allocation of development fund depends on the iscal space 8 .

It was not surprising when IGI found that there were civil servants whose job were only to update and maintain one ile in the Human Resources data while other civil servants who seemed to be responsible for everything. This uneven distribution of workload leads to waste of public money. The necessity to recruit newly employees does not translate into addition of services or goods for the people.

IGI also identiied a rather startling operational spending ratio, as 70% of the piloted districts/cities spent their budget on employees’ expenditures as much as 1-3 times higher to the amount they spent for programs. An analogy would be: to run a program that costs IDR 1,000, human resource expenses of IDR 1,000 to IDR 3,000 are spent. Therefore, it is not surprising to see that funds made available for the delivery of public services are continuously cut of to make room for the evergrowing operational expenditures.

Graph 3. Composition of 2012 Regional Budget (APBD) Realization in 34 districts/cities 9

8 Fiscal space is the diference between iscal needs and iscal capacity. One of the indicators to determine iscal needs is the area coverage or population size. The bigger it is, the higher the allocation will be for balancing funds.

9 2012 Audited Local Expenditure Reports (APBD Realisasi) and published in December 2013. Some regions, like Gorontalo,

still used 2011 Audited Report, due to the 2012 report was yet published with reason being investigated by the Prosecutor’s Oice. In the case of Manokwari and Pulang Pisau, 2012 reports were not released yet and also unavailable at the Ministry of Finance. In Seuluma case, report could not be completely accessed hence excluded from the calculation.

Governing Indonesia From The Regions

Similar trend also showed in Yogyakarta Province and City even though they are on top of the other 32 provinces 10 , the city of Yogyakarta spent for their employees twice as much as what they spent for programs. Scorewise, they scored 6.85 out of the maximum

10 for the district/city level. If spending more on operational budget can lead to better performace, Yogyakarta should have gain a higher score than that. This shows that high operational expenses do not guarantee high performance in governance.

Siak is an example of a district which its operational (human resources) expenditures did not exceed 30%. This district was ranked as the ifth best of this local governance index. More importantly, this shows that creativity can promote eiciency. This is an example of a region that can manage itself in such a way that they can control their operational expenses and allocate more funds to promote the region’s welfare.

Graph 4. Ranking of the assessed 34 districts/cities in IGI 2014

10 Yogyakarta Province occupied the top position in the ranking of IGI 2012 with the index point of 6.8 (scale 0-10)

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Apart from DAU incentives, which can also be provided for regions in the form of Revenue Sharing Fund (DBH) as well as Local Revenue, have triggered the issuance of many mining regulations and other concessions, particularly in regions with rich natural resources. On the other hand, some public services that are still centrally regulated, especially those related to high cost infrastructures, such as energy infrastructure to generate electricity.

Recommendation:

The core of the relations between the national and subnational governments lies in the budgeting policies. To create a condusive atmosphere which can secure good regional governance, evaluation of Law Number 33 of the year 2004 is urgent.

The evaluation can focus on the reviewing of the formula for DAU or DAK, as well as the percentage of distribution of DBH which will signiicantly afect the regional iscal capacity. Governance performance need to be inserted in the formula, accompanied by incentive and punitive schemes based on region’s performance.

The above mentioned policies will afect recruitment practice and human resources management at the regional level. Workload analysis that is conducted on annual basis is required, so that when new civil servants come on board, they will contribute to the improvement of local governance, and not merely function as new customer or market in the region or just to increase population, hence the investors become interested to put in their money. To improve the local human capital is necessary considering that as ten years have passed since the irst application of DAU and DAK formulas, widening gaps remain throughout the regions. This indicates an urgent need to readjust the formula.

On the other hand, the central government policies which relate to natural and energy resources management in the regions, which govern among others mining, marine, and energy activities, are in urgent need for evaluation to fulill the local needs.

2. Maintaining the Balance between Economic Growth and Equal Distribution of Welfare

IGI Findings:

In terms of policy, IGI simulation of provincial ranking in 2008 and 2012 demonstrates that there are two major groups of provinces based on priority of policy in the ield of economy, environment and poverty. The irst group which shows the ability to maintain

Governing Indonesia From The Regions Governing Indonesia From The Regions

While the second group of regions which prioritizing economic growth alone (also 11 provinces), only 27% were able to reduce the level of poverty by average of 1 %. For example, Indramayu in West Java indicated that environmental degradation resulted of priority on the economic growth policy was tightly associated with social inequality shown by high income gap ratio (gini ratio = 0.33).

Graph 5. 2011 & 2012 Poor Population vs. 2012 Economic Growth in 34 Districts/Cities

At district/city level, this research pilot is only able to demonstrate that the higher economic growth does not necessarily reduce poverty. In terms of trend, it is indicated by insigniicant correlation between economic growth and poverty rate (r = 0.1).

These indings indicate that when local natural resources are exploited only for achieving short-term economic growth, not only does it cost natural resources, but the most severe impact is actually on the overall development performance of the region, especially human resources in the form of human capital loss. The real example is agricultural sector.

Executive Summary of Indonesia Governance Index 2014 19

When the environment and human resource managements are sacriiced, exploitation of natural resources will likely to occur. When a land is sold or cultivated for the beneit of other regions, younger generations tend to leave their village. What is happening now is Indonesia has a deicit of human resources who are willing to become farmers or engage in agricultural sector. Ultimately, this sector is neglected. For example, the regions that have critical land of great size tend to be in the lower rank, such as Bangka Selatan, Timor Tengah Utara, and other regions with similar case.

Recommendation:

Therefore, IGI recommends the government (both central and regional) to balance the economic interest and social equality in policy making, because ultimately social equality actually create greater investment in the long term. The more prosperous the population of a particular region is, the better the supporting conditions for improving the investment.

For regions that are struggling to escape from high-level poverty, boosting the economic sector and sustainable natural resources are absolutely necessary in order to absorb the local workforce. For example, in Indramayu that has poverty rate of 15% with high child and maternal mortality rate, low Human Development Index and an enclave of human traicking, policy on creative and strategic economy touching the region’s potentials should be strongly promoted.

For districts that have potential prosperity, investment should be made in human resource development, infrastructure and technology. Regions, such as Siak, Semarang, Yogyakarta, should be able to move forward to a more strategic policy level by using the social capital that is strong enough to improve the quality of regional development.

3. Comprehensive Evaluation of the New Autonomous Regions (DOB)

IGI Findings:

During 1999-2013, regional expansion was recorded to increase by 220 regions (at the provincial and district/city level), bringing the total number of provinces and districts/ cities throughout Indonesia to 542. Expansion of 102 regions (50%) was an initiative of the House of Representatives, while the rest was upgrading of regional status from administrative to autonomous regions.

Among the 34 samples of regions evaluated by IGI, there are 10 new autonomous regions 11 . Out of the 10 regions, only two regions had economic growths above the national average, namely Siak and North Lombok District, while the other eight regions

11 Sinar Harapan review - http://shnews.co/detile-27823-dpr-kangkangi-pemerintah-lewat-pemekaran-daerah.html)

Governing Indonesia From The Regions Governing Indonesia From The Regions

Timur, Tanjung Pinang, Pulang Pisau, Seluma, Bangka Selatan, Tangerang Selatan,

and Sigi. Most of these regions had been established for more than 10 years, except Sigi and South Tangerang that had only been established for six years. Seluma should also

be particularly noted because of its very poor quality and closed governance. The IGI team was not able to make an analysis due to lack of accessibility and availability of data.

Graph 6. IGI 2014 Results in 10 New Autonomous Regions

The latest result of the evaluation of the new autonomous regions was conducted in 2009 by the Ministry of Home Afairs (MoHA). The evaluation results showed that 80% of the new autonomous regions were unable to bring prosperity to their people. MoHA noted that 7% of the new 57 autonomous regions (DOB) evaluated in the period of 2007- 2009 obtained relatively poor score. Unfortunately, although the evaluation of these regions showed poor results, the government and the house of representatives were unwilling to reintegrate them to their origin districts/cities as the motivation underlying the establishment of new regions was not to equally distribute the welfare, rather it was for giving out positions, releasing the load of the origin district, and making transactions between regional government and the house of representatives.

Whereas the state had spent at least around Rp 50 trillion for establishing new regions since 1999, the impact of this disbursement was not evident. Some of the new autonomous regions even raise problems, such as dispute over boundaries, regional election-related dispute, corruption, and others. Some of these regions were not even able to run the administration, only selling their natural resources to business actors, and unable to manage the budget.

Executive Summary of Indonesia Governance Index 2014 21

Graph 7. Average Index of Each Arena on 34 Districts/Cities

So far the more rigid criteria have been set for local governments. By establishing a new law on Local Government, local governments are expected to make a more thorough preparation for three years, and the establishment of a new autonomous region can be annulled if the new administration does not meet the criteria. Mechanism of punishment is necessary to ensure the efectiveness of public services in the regions.

Recommendation:

Based on the above indings, it can be concluded that regional expansion without proper preparation in terms of human resources and social capital has adversed impacts on people. Interregional disparities are more increasingly widening and public services are inequitable. Therefore, IGI appeals to the government to make evidence- based evaluation on annual basis rather than on a ive-year basis, so the progress can

be measured annually. Furthermore, the evaluation results should be accessible by all stakeholders of the relevant regions so that the local people are aware of and understand about the development of their own region.

The latest evaluation of the new autonomous regions only assessed government performance highly based on administration procedure instead of using comprehensive approach to measure all actors. Therefore, it is recommended to make a comprehensive evaluation of new autonomous regions including physical, iscal, governance and performance aspects, as well as review the performance of government (including political oice) and societies (civil and business). The evaluation results should be published openly and can be accessed directly as reference to decision-making process.

Governing Indonesia From The Regions

4. Scrutinize Performance of the House of Representative/ Local Parliament (DPR/DPRD)

IGI Findings:

IGI scores 12 for all actors prove that political oice, who is supposedly contribute the most, have the lowest score of performance compare to Regional Head, Bureaucracy and Society.

The main function of political oice is to develop a policy framework by the

executive and supervisory function by the House of Representatives. Unfortunately, the national/local parliament has rarely established a strategic and visionary policy, so political reform is what is actually needed. Without political reform, reform of the bureaucracy cannot be accomplished. Current condition shows on the contrary: the competence of bureaucrates is higher than political oicials.

The Region Head which we have so far believed in is apparently not the only key factor of changes, because no matter how good is the quality of the Region Head, s/he is only allowed to lead maximum of 10 years. However there are no regulations that limit the maximum number of times an individual to be re-elected as a member of national/ regional parliaments. Thus it is not suprising if incompetent and corrupt members of national/regional parliament can be re-elected and remain unnoticed by the voters. There have been several cases of mass corruption occurring at the provincial and district/city levels where all members of local parliaments were arrested for corruption, such as Provincial Parliament of Banten and West Papua, and District Parliament of Kutai Kertanegara District (East Kalimantan) and Bolaang Mongondow Timur District (North Sulawesi).

As a result, the working mode of local governments tends to rely on the government’s budgeting cycle and merely answers to the short-term interests (only during the period of holding the power of authority) of political parties. But when their cadres have become members of local parliament, the political parties avoid the responsibilities over their members quality i.e convicted of corruption.

The institution responsible for creating political cadres is political party, because most of the key members of the management board of a political party sit as a legislative

12 IGI shows that the performance of society tend to be better than that of the government. Although in general the scores were below the standard, among the actors evaluated, the top position was occupied by the bureaucracy with score of

(4.73), followed by the performance of civil society (4.65) and Economic Society (4.18), while the performance of political oice occupied the lowest position with score (3.69).

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Graph 8. Performance Score of Local Parliament in IGI 2014

Nevertheless, people rarely demand for accountability of the political parties and none of the institutions in this country can “punish” the political party that has cadres with poor quality.

Political parties are only punished by the electability rate after ive years, but there is no signiicant penalty in the form of sanction of not being allowed to participate in general

Governing Indonesia From The Regions Governing Indonesia From The Regions

Recommendation:

Scrutinizing political oicials means preventing potential abuse of authority as well as the entry of incompetent cadres in the next election. This change can be promoted by holding one-for-all general elections in all regions, just as we all experienced in the 2014 election, in which all components acted and all functions ran simultaneously.

Therefore, the society should have a reference in voting for and overseeing their representatives. In the context of a democratic society, people holds the sovereignty, but once an individual is elected, the power s/he holds tend to be abused when there is no control at all.

By utilizing assessments that are independent, objective and neutral, the society can provide input, criticism or recommendation that is more comprehensive, thorough and productive. For example, the society can support the creation of an online platform containing the proile of political party cadres.

Overseeing political oicials and one-for-all general elections can reform the political culture and the local society compare to appointing Regional Heads by local parliament. The appointment of Regional Heads must not

be in the hand by an allegedly most corrupt institution in this country 13 .

A proposed plan by the current National Parliament to give the authority to the Local Parliament to appoint Regional Heads are too vonishing the Regional Heads without relecting on the Local Parliaments’ performance themselves.

One-for-all local elections will also have an automatic positive impact on the Regional Electoral Commission (KPUD), because until today KPUD rarely keeps the history of the previous elections. It is not a surprise if KPUD produces poor quality of legislative candidates due to poor facilitation process. For example, almost all websites present the election-related regulations but none of them contains the information about the history of KPUD performance until today. For a commission that has a very important mandate, it is unfortunate when the host does not make any documentation at all about the celebration of the people’s democracy happening in their own area.

13 KPK’s Bureaucratic Corruption Index shows the three most corrupted institutions, i.e. the police, parliament and the courts.

Executive Summary of Indonesia Governance Index 2014 25

5. Optimizing E-Government (in DPRD & Bureaucracy) in the Region

IGI Findings:

Four arenas have diferent way of communication and coordination. The governance domain of these four actors is apparently diferent and likely to be in parallel, rarely intersect and are yet synchronized. This resulted in the diferences in development priorities, implementation and public’s expectation. Despite the diferences, there should similar degree of openness which in turn could stimulate interactions among these governance actors. IGI indings show that the annual reports of Regional

Heads (LKPJ) never concretely report the progress of targets according to the

5-year development plan (RPJMD).

On the contrary, IGI shows evidence through calculating the correlation between the score of the principles of transparency and the efectiveness of political oicials, which indicated that the more transparent the political oicials, the better their performance are (r = 0.3).

Figure 1. Accessibility to Civil Society’s Work Plan in 34 Districts/Cities

Figure 2. Accessibility to Bussines Society’s Financial Report in 34 District/Cities

Governing Indonesia From The Regions

One of the major contributing factors is when the members of DPRD open direct channels with the society. The more DPRD allows public access to their documents and reports, the better the public and their constituents can help them. In other words, when they are not transparent, their performance goes down drastically. The same principle applies to the bureaucracy and its relationship with the public. The inding

of IGI shows that the bureaucracy and the (civil and economic) society rarely share their activities or programs.

Concerning the bureaucracy arena, out of 33 provinces and 34 districts/cities, only two provinces (DKI Jakarta and Yogyakarta) have had e-budgeting system. While at district/ city level, only Banda Aceh, City of Yogyakarta, Semarang, Karangsem and Balikpapan have uploaded the summary of local budget (APBD) into the website.

E-budgeting and competent human resources allow the government to run more eiciently and faster. On the other hand, the civil and business societies at districts/cities rarely share information about their inancial reports, programs and institutions that are accessible by the public. In many cases, the civil society also closes their reports as they are bound by the regulations set forth by donors. For the business society, transparency tends to be minimal since they do not feel the need to report to the public and the government.

The Accountability Report of the Regional Heads (LKPJ) only contains percentage of how the budget is spent. For example, 100% of the budget has been achieved, or 200% of the budget has been realized. It does not explain what 100% or 200% means in terms of development results. The report should include the answer of, for example, with the realization of 100% of the budget, how many people are alleviated from poverty? What is the percentage of educational problems that can be solved?, etc. The report should address the issues and needs of the society in a comprehensive manner.

Another inding that has become a public issue but left unaddressed is that none of

DPRD in 34 districts/cities provides individual work report as DPRD members

and or on behalf of the DPRD institution to the public. In fact, the List of Local Legislation Programs (Prolegda) which is mandatory to be prepared is not found in most of the samples of IGI which are taken from Prolegda 2012 and the previous years. In other words, one of the most referred institution like DPRD has never reported both institutional and individual performance. It has been the situation for years despite the fact that one member of DPRD represents tens of thousands to hundreds of thousands of people. It means that the legitimacy granted by the people has been violated by the absence of accountability report to the public.

Executive Summary of Indonesia Governance Index 2014 27

The Secretariat of DPRD tends to be powerless and closed in terms of access to public documents. In all districts, almost none of DPRD Secretariat shares report of any kinds such as ield visit (kunjungan kerja/kunker) or recommendations in a comprehensive manner. There are some copies of Prolegda and several minutes of meetings but they are merely for formality and do not actually show the process of decision-making or considerations during the decision-making process.

Figure 3. Accessibilty to Prolegda in 34 Districts/Cities

Figure 4. Accessibilty to DPRD’s Recess Fund Utilization in 34 Districts/Cities

When the IGI team tried to access the individual reports and activity reports and conducted content analysis, very few DRPD members have published strategic reports and written recommendations to the bureaucracy and the public. In fact, both the local government and the public do not know and understand the process of DPRD in deliberating the law.

Governing Indonesia From The Regions

Recommendations:

IGI recommends the government and the civil society publish their reporting through online system. This will facilitate transparency as reports are opened and uploaded on formal and non formal websites for open access by both.

Therefore, a system which is linked to the payroll system of DPR/D is needed to require reporting on the performance and contributions of individuals and factions to the public. The reports can be prepared by DPRD Secretariat, the Advisory Team or a new unit under DPRD and uploaded to DRPD website and or social media accounts of each member. Incentives could also be given to members of DPR/D who actively upload the report individually and on behalf of the institution.

6. Budget Synchronization for Welfare

IGI Findings:

One of the provincial government’s mandates is to narrow the inter-regional inequality. In terms of social justice, budget allocation for basic services in education and health, poverty and accommodation of women’s rights tend to be minimal.

Photo 2 & 3. Mobile cataract surgery, a car designed to be able to conduct cataract surgery. This car has been moving around the village in the province of Bali, even to the island of Nusa Penida.

For example, in 2012 the West Java provincial government must put special attention to Indramayu which was still far behind compared to other regions on allocation per capita for health and poverty alleviation. The budget allocation was only Rp. 788

per capita/month and Rp. 4,227 per capita/month. This provincial assistance is

insuicient to minimize gap of all districts.

The allocation of education fund for each child is also similar. The spending for education

at the district/city take nearly an average of 50% of APBD, yet an average of 85% is spent for salaries of teachers who are civil servants and non civil servants.

Executive Summary of Indonesia Governance Index 2014 29

When combined with the allocation of the provincial government from the previous year, we found that the budget for the 12-year compulsory education program per

child is ranging from Rp300,000 - Rp3,600,000 per year, which means it is Rp20,000

- Rp300,000 per month per child. It is diicult to imagine how to apply equality or even to improve the quality of the curriculum and teachers’ capabilities at districts/cities with that small fund allocation.

Graph 9. Budget for poverty alleviation per capita per month in 33 Provinces 2012

Governing Indonesia From The Regions

Graph 10. Budget for Health per capita per month in 33 Provinces 2012

This has also resulted disparity in length year of schooling between girls and boys among districts/cities. An example of this is found in Karangasem (Bali), Sampang (East Java), Indramayu (West Java) in which boys and girls only go to school for 4-6 years, which means that they do not complete the 9-year compulsory education. Meanwhile, the central government has launched the 12-year compulsory education. Obviously, the governments need to focus their budget and strategy to ensure that the targets of 12- year compulsory education can be gradually achieved.

Executive Summary of Indonesia Governance Index 2014 31

Graph 11. Budget for Education Per Student Per Month in 34 Districts/Cities

Recommendations:

It is recommended to use data and igure per capita (or per beneiciary) per year as reference in determining the budget and policy. Regions having less just budget allocation as shown by IGI should increase the budget allocation in order to meet the standards of public services quality.

Governing Indonesia From The Regions

Therefore, all major items of the budget for SKPD (local oice) should be linked to the substantial analysis via e-monitoring and evaluation of SKPDs. To-date, there has not been any local monitoring and evaluation system conducted in the region that can be accessed even by the head of the relevant region. whereas the quality of governance can be compared by referring to the key indicators (such as in IGI). By doing this, the government or the people can immediately obtain the same information to be taken into account in the decision-making process and public engagement.

Good results in the evaluation not only stimulate the internal improvement in the government but also to provide opportunities for the public to participate in thinking about the progress of each region. Thus, establishing a monitoring and evaluation system not only depends on the sophistication of the tool, technology or complex indicators, but more to whether the information is user friendly, or in other words, how the information enables people of any class to be informed and understand about the condition of their region.

7. Strengthening Cooperation between DPRD and the Civil Society

IGI Findings:

The absence of the supervisory function causes huge loss for regions. However, the approach of the civil society has only touched the downstream, or new oicials are monitored when they are already elected.