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forumfed.org
FEBRU ARY | MARCH 2008 Federations
hile Indonesians pursue
their headlong plunge
into decentralization
and devolution of powers
to the provinces, the nation paused
recently to ponder the legacy of Suharto,
their former iron-fisted leader, whose 32-
year tenure brought them peace and
some economic development but denied
them the ability to contest his rule.
Suharto’s death on Jan. 27 came
almost 10 years after he relinquished
power. Despite more than 30 years of stability,
his critics, including human rights
groups and the international media, held
him responsible for political repression,
unresolved human rights abuses and
corruption that benefited his family and
his cronies.
Suharto was no supporter of federalism
for Indonesia, a view his detractors
claim was a cover for his corrupt profiteering
from the natural resources of the
provinces and for a kleptocracy that
would inevitably be curtailed with the
ceding of powers to the provinces over
the resource wealth.
Today, the style of President Susilo
Bambang Yudhoyono has been to build
consensus and form issue-by-issue coalitions
in the legislature. Dubbed “the
thinking man’s general,” the former military
man and first directly-elected
president – former presidents were
elected by the legislature – has allowed
the country’s decentralization program
to proceed in an orderly fashion.
His non-confrontational style stands
him in good stead, less than two years
before the next election.
The country, considered a centralized
state before the reforms began, has gone
through nine years of political decentralization
starting in 1999 and reached a
landmark with what Indonesians call the
“big bang” in 2001. Since then, the
country has implemented one of Asia’s
m o s t a m b i t i o u s
decentralization programs.
From 1999 onward, the program
has continued through
the administrations of four
successive presidents, transferring
powers, money and
even civil servants from the
capital to the provinces.
Many Indonesians feared
that such moves would lead to
the break-away of many provinces.
But except for East
Timor, which voted to secede
from Indonesia in 1999 and
became a UN-recognized
country in 2002, that has not
happened.
Instead, what Indonesians
call “special autonomy” –
something like the powers of a
Canadian province – has been
granted to the provinces of
Papua and Aceh, and the onetime
rebels from those regions
have laid down their arms and
become politicians. The recent
decentralization of powers in
Indonesia has been extended
to the rest of the country’s 33
provinces. In some cases it has
gone beyond decentralization
and has been more like devolution, the
ceding of authority by a central power of
a country to another order of government
within the same country.
Indonesia gained its independence
from the Netherlands in 1949. During the
country’s first 50 years of independence,
the word “federal” was considered an
expletive. Every patriotic Indonesian was
expected to support “the Unitary State of
the Republic of Indonesia.” This anti-federal
sentiment was firmly rooted in
Indonesia’s opposition to its former
Dutch colonial rulers, who sought to
impose a federal form of government on
an independent Indonesia after the
Second World War.
Today, the Dutch are long gone and,
ironically, Indonesia’s 33 provinces are
seeking increased powers from the central
government in Jakarta. Some
Indonesians are openly calling for federal
i sm, which would have been
unthinkable a few years ago.
What caused this major shift? First
came the downfall of Suharto’s authoritarian
regime in May 1998. Then
movements for democratization and
decentralization swept Indonesia and
gave provinces and regions wide-ranging
autonomy under four consecutive
presidents: B.J. Habibie, Abdurrahman
Wahid, Megawati Sukarnoputri and,
Suharto’s iron fist brought 32 years of
centralized stability to Indonesia
Ten years after his departure, Indonesia’s fractious provinces acquire new powers
By Ri dwan Max Sijabat
Ridwan Max Sijabat is a journalist on the staff of the Jakarta Post, where he has written
extensively on national politics, conflict , human rights and devolution in Aceh.
indonesia
W
A woman carries her child past a poster of former
Indonesian president Suharto, who died in January.
AP Photo
forumfed.org
FEBRU ARY | MARCH 2008 Federations
since 2004, Susilo Bambang Yudhoyono.
Indonesia would be a difficult country
to run with a completely centralized
government. The nation has a population
of 230 million living on more than
17,000 islands. It also has the largest
Muslim population of any country,
although the population is also nine per
cent Christian, two per cent Hindu and
one per cent Buddhist. There are 2,500
ethnic groups with their own languages
or dialects of Indonesian. Until 1998, the
country’s 33 provinces and more than
480 regional governments and municipalities
had few powers of their own.
Increasing decentralization
Since Indonesia’s decentralization program
began, the central government has
handed over an increasing number of its
powers to provinces and regions, allowing
them to deal with their domestic
affairs in almost all sectors, except
defence and security, matters dealing
with foreign affairs, monetary policy and
judicial and religious affairs.
The regional administration law of
1999 and the fiscal balance law of the
same year have been revised three times
since then to give increasing autonomy
to the regions. The regions now handle
most domestic affairs, particularly local
elections, fiscal matters, investment and
natural resource exploration. As well,
Papua and Aceh, two provinces in the
country’s western and eastern tips, both
of which had secessionist movements in
the past, have received a special form of
autonomy with enhanced powers in all
areas. Significantly, both provinces now
have shared jurisdiction with the central
government over natural resource exploration
and management.
Agus Alua Alue, chairman of one provincial
government, the Papua People’s
Assembly, says demands for greater
autonomy have been increasing.
“Federalism might be unavoidable in the
coming decades because of Jakarta’s
strong policy of controlling provinces
under the Indonesian unitary state,” he
added. “But in fact, provinces have
(already) implemented principles of
federalism.”
In an interview with the author, he
acknowledged that autonomy for Papua
had one negative consequence: the province
has become a fertile ground for
corruption, and the target of the corrupt
has been the annual disbursement of
large sums of capital meant to finance
the province’s special autonomy. A larger
part of the province’s budget over the
past three years was allocated to pay for
bureaucracy than for increasing services
and facilities for the people of Papua.
Suffering from AIDS
Papua is home to a population of 2.4 million
and to several major mining
companies, including U.S.-based copper
and gold miner Freeport McMoran Ltd.
The province has received about US$5.6
billion annually in special autonomy
funds from Jakarta and has managed
about US$16 billion of funding since 2001.
Despite its new funding, Papua has
remained Indonesia’s least developed
province, with most of its tribal people
living in remote areas, lacking sufficient
schools and suffering disproportionately
from HIV and AIDS.
The other autonomous province,
Aceh, managed to form a democratic
government thanks to a peace agreement
between Indonesia and the rebel
fighters of the Free Aceh Movement. The
agreement was reached through mediation
by a Swiss-based NGO, the Henri
Dunant Center, in August 2005. This year,
Aceh has managed about US$28 billion
in annual revenue to carry out development
in the province of just 4 million.
Local elections held in Aceh in
October 2006 were won by independent
candidates, mostly former rebels of the
secessionist movement. However, they
have had difficulty implementing programs
to improve the economic situation
of people there. Most local politicians are
building local parties with the goal of
winning seats in the provincial and
regional legislatures in the 2009 legislative
election.
Separation feared
Yet the former rebels’ sweeping victory in
the 2006 local elections has raised fresh
fears in Jakarta of a possible outright separation
by Aceh from Indonesia.
Nasir Djamil, a legislator from the
Islamic Prosperous Justice Party (known
by its Indonesian initials PKS), is still
worried about the province’s possible
separation. He is nervous because most
of the senior and strategic positions in
Aceh have been taken by former rebels,
resulting from the recent local elections
called for by the peace agreement signed
by Indonesia and the Free Aceh
Movement in Helsinki in August 2005.
Djamil does see one hopeful sign. He
believes the central government will
regain the confidence of the people of
Aceh under the special autonomy
arrangement, especially if major progress
is made in implementing the peace
agreement. The peace pact called for the
reintegration of ex-combatants into society
and the resolution of unsolved cases
of human rights abuses during the
conflict.
Regional parties in the provinces do
take independent political positions.
Nationwide political parties, however,
have quite different political interests to
defend. They support a unitary state for
Indonesia and have tried to maintain
their monopoly over state institutions,
In 2007 former rebel leader Irwandi Yusuf became governor of the Indonesian province of
Aceh, which gained special autonomy from Jakarta in 2001.
REUTERS/Tarmi zy Ha rva
Canada’s
federal
government
reluctant to
fund cities
By RO BERT YOU NG
anadian municipalities are
con tinuing to press the federal
government in Ottawa
for increased funding – this
despite the fact that municipalities
in Canada fall
squarely within the jurisdiction of the
provincial governments. Economic
forces seem to be accentuating the
importance of the larger cities, which
are growing fast, while municipalities in
peripheral areas struggle with decline in
population. Financial stress is widespread
among Canadian municipalities
of all sizes. Business interests, labour
and academic allies of municipalities
have pushed what they call their “cities
agenda” in and around Parliament Hill
in Ottawa. And the federal government
has responded, especially during the
forumfed.org
FEBRU ARY | MARCH 2008 Federations
10
C particularly the executive and legislative
bodies. However, most regions have
been dissatisfied with the current powersharing
and what they view as a fiscal
imbalance which favoured Java, an
island that is only one-third the size of
Papua, but contains almost 65 per cent of
the country’s 230 million people.
“Java, which has attracted the most
qualified human resources, has grown
too rapidly, while many provinces outside
the island have been lagging behind,”
said Yopie S. Batubara, a regional representative
from North Sumatra province
in a recent interview with the author.
“Unqualified human resources have been
moved to least-developed provinces
under the resettlement program,”
Batubara added.
The second house of Indonesia’s legislature,
the Regional Representatives
Council, has demanded a revision of the
1945 Constitution to give the regional
council more authority. It is asking for
increased power to make laws, plan state
budgets and control Indonesia’s executive
body. These steps would increase the
regions’ bargaining power and implement
a true bicameral parliamentary
system, according to their proponents.
The chairman of the Regional
Representatives Council, Ginandjar
Kartasasmita, has expressed optimism
that the president and political parties
will support the proposed constitutional
amendment following the 2009 general
election. In that election, support for the
proposed empowerment of the council
is expected to be a key campaign issue
that will probably be supported by candidates
for posts of governors and
regional heads.
Treated unfairly
Kartasasmita said resource-rich provinces
such as Riau and East Kalimantan
have demanded special autonomy
because they believe they were treated
unfairly by Jakarta, which gave local
authorities only 15 per cent of the taxes
on oil produced there.
The chairman, Kartasasmita, said
most provinces and regions have supported
the idea of fair distribution of the
country’s wealth. He said Jakarta should
not monopolize the fiscal domain, but
instead should transfer more funds than
it has in the past to resource-rich provinces
; otherwise, they will either
demand federalism or seek separation.
Ikrar Nusa Bhakti, a political analyst
at the Indonesian Institute of Sciences,
and someone who believes in Indonesia
remaining a unitary state, has warned
that devolution in the country’s changing
political system is the equivalent of
Indonesia becoming a federation.
Bhakti predicted that the increasing
demands for additional authority and
autonomous funding for the provinces,
combined with the central government’s
habit of ignoring problems such as
mounting levels of poverty and unemployment,
would inevitably lead to the
implementation of “a federal system” in
Indonesia such as that of the United
States and Germany.
Smoke billows from a palm oil refinery on the
island of Sumatra. Every year, an area of
forest the size of El Salvador is lost to
logging, agriculture and development. Some
provinces, like Aceh and Papua, have
clamped down on illegal logging and have
cut deforestation.
AP Photo/dita alang kara
SPECIAL SECTION
Cities and their
agendas