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Significant changes with little progress: evaluation on the 3 rd year of the implementation of decentralization framework and its impacts on socio-economic local development

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Tri Widodo W. Utomo
Department of International Cooperation, Graduate School of International Development,
Nagoya University, 1 Furo-cho, Chikusa-ku, Nagoya, 464-0861, Japan

Proceeding Temu Ilmiah XII, 2003, Gifu University: held and published by Indonesian Student Association (PPI)

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Significant changes with little progress: evaluation on the 3 rd year of the implementation of decentralization framework and its impacts on socio-economic local development

  1. 1. Significant changes with little progress: evaluation on the 3rd year of the implementation of decentralization framework and its impacts on socio-economic local development (Case of Bandung City, Indonesia) Tri Widodo W. Utomo Department of International Cooperation, Graduate School of International Development, Nagoya University, 1 Furo-cho, Chikusa-ku, Nagoya, 464-0861, Japan Abstract By January 1st , 2004, Law 22/1999 will be entering into the fourth year of implementation. Unfortunately, it does not produce expected results yet, both at local and national context of development. From literature studies and cross-country evidences, however, policy on regional autonomy promises many significant improvements in varying sectors of development. This paper examines the correlation between decentralization framework and socio-economic development in Bandung City, Indonesia, with special reference to the six development fields: investment, physical infrastructure, education and human development, environmental protection, development planning and people participation, and public service delivery. The general conclusion is that there are many significant changes but only little progress. This might be caused either by incorrect implementation or insufficient time to implement the law. Whatever the causes are, this paper supports idea of revising some parts of the law in order to create a better atmosphere of local politics. Keywords: decentralization, socio-economic development, Bandung city Introduction Since its effective implementation on January 1, 2001, the decentralization law of 1999 has erected many hopes in realizing more democratic local governance and improving public welfare. Unfortunately, such expectations have not clearly materialized when Law 22/1999 is entering the fourth year of implementation. On the contrary, some negative practices of government management are perceived to be the direct impact of the law. However, it is fair enough to notice that 3 years or even 5 years is impractical to fully execute such fundamental policy. In other words, it should be considered the first 5 years of implementation of a basic law as a transition period. In the case of Law 22/1999, it is quite natural that during transition time local governments undergo some difficulties in executing new decentralization framework. Such situation should not necessarily lead to a conclusion of the significance of law amendment. The most important thing is how to recognize the obstacles and to consider the counter efforts in order to minimize the negative impact of such situation. In the case of Bandung City Government (hereinafter is referred as to BCG), it is also true that the performance of socio-economic development was quite low within some years before and after the implementation of decentralization framework. In other words, decentralization has failed to foster a better and higher developmental performance. In this sense, there are two possibilities of the inability to produce significant progress. First, decentralization policy is incorrectly implemented and managed; or second, it is still a transition period from old system (centralized) to new decentralized system of governance.
  2. 2. The Impacts of Decentralization: A Cross-Country Evidences From cross country data and experiences, decentralization may produce higher performance of certain field of development. Keith McLean and Elizabeth King (1999: 55) conduct research on decentralization and its impacts on the education sector. The initial evidence suggests that decentralization to sub-national governments may increase autonomy for communities and school actors to improve school and learning. By increasing the participation of the parents, community-managed school in El Salvador show significantly low rates of student and teacher absenteeism. In Nicaragua, controlling for similar household background and school inputs, students in school that make more of their own decisions about school functions perform better in tests. Similarly, as declared by Anne Mills (Kolehmainen-Aitken, 1999: 57), decentralization in health sector offers some advantages, those are: more rational and unified health service that caters to local preferences; improvement of health programs implementation; lessened duplication of services as the target of populations is defined more specifically; reduction of inequalities between rural and urban areas; cost containment from moving to streamlined, targeted programs; greater community financing and involvement of local communities; greater integration of activities of different public and private agencies; and improvement of intersectoral coordination, particularly in local government and rural development activities. However, without careful planning of appropriate organizational roles, relationship and structures, decentralization in health service may produce unproductive results, as occur in some countries like the Philippines, Zambia, and Papua New Guinea (Kolehmainen-Aitken, 1999: 59). In the infrastructure sector, Seddon (1999: 70) serves studies that indicate that decentralization can have varied effects on the infrastructure sector. For example, both aggregate and sub-national infrastructure expenditure increases as decentralization proceeds, particularly in developing countries. This could be an indicator that local government prefer more infrastructure than would have been provided by the central government. In addition, performance indicators generally improve slightly or stay the same when infrastructure sectors are decentralized, although they do observe a few negative effects. A brief summary of nine countries case studies on the impact of decentralized governance on service delivery for the poor is served by Work (2002). He points out that decentralization lead to the improvement of health services in Belo Horizonte, Brazil; improvement of Municipal service delivery in Sinuapa, Honduras; successful project implementation in Jamunia Tank Gram Panchayat, India; improvement of education services in Ma’n and Irbid, Jordan; upgrading of squatter settlements in Pakistan; improvement of health services in three cities in the Philippines; generating local economic development in three Polish Cities; improvement of revenue generation in Ivory Park, South Africa; and improvement of market services through private partnership in Jinja, Uganda. Another interesting research conducted by Moore and Putzel (1999: 12) supposes that decentralization is a popular prescription for the governance problems affecting poor countries in particular. It is widely believed that decentralization will also have pro-poor impacts. The most common argument is that, because decentralization by definition involves bringing government closer to the governed in both the spatial and institutional senses, government will be more knowledgeable about and hence more responsive to the needs of the people. This is expected to lead to pro-poor policies and outcomes. However, it is difficult to evaluate these kinds of arguments, because decentralization covers a very diverse range of phenomena. That is the reason why decentralization produces both positive impact in a particular region (West Bengal), but it also creates negative impacts in other regions (other than West Bengal). To summarize the impact of decentralization, UNDP Poverty Report 2000 confidently asserts that decentralized governance, when carefully planned, effectively implemented, and appropriately managed, can lead to significant improvement in the welfare of people at the local level, the cumulative effect of which can lead to enhanced human development. In addition, if decentralization involves real devolution of power to local levels, the enabling environment for poverty reduction is likely to be stronger. On the contrary, badly planned decentralization can worsen regional inequalities. Left to their own devices, richer regions are likely to develop faster
  3. 3. than poor ones. And a system of matching grants, intended by central government to motivate local government to raise funds, typically exacerbates regional disparities. The richer regions can raise more funds – and thus receive more in matching grants (UNDP, 2000: 60-61). In the political aspect, there is also a direct link between decentralization and democracy, as exposed by Hadiz (2003: 16). He argues that decentralization imagines the enhancement of levels of transparency and accountability and the development of good governance practices. The idea is that local needs will be better identified as a result of decentralization, given higher priority, and that local leaders will be more directly under the scrutiny of their communities. Local initiative and creative energies will be unleashed as well due to the lifting of stifling centralized control over various aspects of local life. Moreover, democratic governance requires solid foundations in well functioning local institutions that could conceivably thrive in a decentralized environment. In the case of Indonesian decentralization, the Asia Foundation (2002: 10-17) finds out that decentralization is able to endorse the following three current directions. First of all, there is an increasing awareness and appreciation of peoples’ participation. In the sites covered, there are strong indications of increasing peoples’ participation, transparency and accountability. People are demanding better performance and in response, some local governments have become more ‘customer oriented’ and open to public discussion and dialogue about their performance and how they can improve. In Bandung, for example, the Bupati (Head of District) and technical staff have held weekly public dialogues with constituents at the sub district level for the past year. The dialogues give the public an opportunity to provide feedback on local government performance related to service delivery and social, political, economic and environmental problems. These forums have favorably impacted peoples’ image of local government and their perceptions of government accountability and transparency. Another finding is that local government agencies are committed to improve service delivery and are feeling the pressure to do so from citizens. Since public service delivery in the hands of closer and more accessible local governments, citizens have found it easier too express concerns about the quality of service and demand more. The quantity and quality of services has improved in some areas, but it has deteriorated in others. Generally speaking, however, local governments have managed to maintain the level of service that the central government used to provide. For instance, a perda (regional regulation) was passed in Pontianak in April 2001 to improve the quality of public services. Considering local potentials, community needs, and work efficiency, the Pontianak City established a benchmark of 5.6 (out of 8) working hours as minimum amount of time that should be devoted to service delivery. The remaining time is for administrative matters. Units that fail to meet this standard will be evaluated and face the possibility of being merged with other units. Finally, the last finding concerns with the fact that regional governments are cooperating and sharing information with one another and with provincial government to solve a variety of shared problems. A common interest in improving public service delivery, increasing revenue and resolving problems and conflicts arising from decentralization have motivated local governments to help each other. Though the roles and responsibilities between different levels of government remain unclear, and the central government has provided insufficient support for local problem solving and conflict management, local governments are being proactive in forming association to share information and approaches to common problems and to advocate policy reforms. Nevertheless, some negative impacts seem unable to be avoided. In their research report, SMERU (2002: 21-22) depicts that Cirebon District is preparing to launch 18 new tax / levies (pajak / retribusi) regulation; while Garut District has issued 24 new tax / levies regulation, 17 of which concerns with financial charges. The similar can be found in Ciamis, where it has 35 types of revenues: taxes (6), levies (27), and third party grants (2). These phenomena have propensities impeding economic investments and domestic businesses in the future if the government does not anticipate through proper policies. According to Soesastro (2001), one of the most hazardous impacts of such regulations is obstruction of inter-regional trade and the weakening competitiveness of local commodities. Likewise, Hadiz (2003: 16) observes that decentralization in Indonesia has given rise to highly diffuse and decentralized corruption, rule by predatory local officials, the rise of money politics and the consolidation of political gangsterism. In the Indonesian context, the main questions
  4. 4. to ask are, therefore, ‘who has benefited most from decentralization?’ and ‘who have been the main beneficiaries of the advent of democratic system that is primarily driven by the logic of money politics and of political violence? In fact, it is not difficult at all to identify who these are. By and large, they have been individuals and groups who had earlier functioned as the old New Order’s local operators, small/medium but politically connected businesspeople with big ambitions, as well as an array of the regime’s former henchmen and enforcers. But the Indonesian case is not unique. There are many countries that offer examples of decentralized democratic political life in which predatory elements of civil society – including political gangsters – have been major players. Post-Soviet Russia provides one of the better examples, as does the Philippines case mentioned earlier, and Thailand (Hadiz, 2003: 17). Decentralization and Socio-Economic Development in Bandung City Generally, it can be showed that in all sectors, many policy changes have been accomplished but such changes do not lead to substantial growth of socio-economic development. Therefore, we can compose an initial conclusion that “decentralization policy is able to produce essential changes, but not significant progress”. In the following part, 6 sectors of local development performance under a decentralized system will be examined. 1. Investment (Domestic and FDI) There are many studies indicate that the impact of decentralization on investment is not so significant. According to Jaringan Nasional Pendukung UKM (National Network for Supporting SMEs) and Perkumpulan Untuk Peningkatan Usaha Kecil (Association for SMEs Improvement), decentralization does not lead to the betterment of investment atmosphere. From their study in Bandung City and District of Bandung, they found three conditions or reasons why local regulations (Perdas) tend to impede investment activities: 1) there is no consultation mechanism with local entrepreneurs in the formulation of Perdas; 2) there is no study of advantage and disadvantage of a given Perda on the investment climate; and 3) there is no review and control mechanism over the Perdas (Bank of Muamalat). As a matter of fact, it becomes public opinion that in the wide-autonomy era local governments in Indonesia have promulgated many regulations, which are discouraging companies to invest and entrepreneurs to innovate. To some extent, local autonomy is even seen as a calamity (Media Indonesia, April 1, 2003). In addition, levying additional taxes disregarding the connection with government specific services for the tax is simply no good deed and just the violation of customer satisfaction principles, which is the essence of NPM (New Public Management). In this sense, KADIN of Bandung City criticized Local Regulation on tourism charge (No. 31/2001) and labor affairs (No. 18-19/2001) as burdensome for local entrepreneurs.1 Countering to this issue, a member of Bandung City Parliament claims that during the last four years BCG has issued 90 Perdas, of which only 10% is dealing with taxes and charges (Media Indonesia, April 1, 2003). Under such circumstances, it is somewhat logical that investment growth in Indonesia, particularly in West Java area (including Bandung City) is decreasing. During 2002, 341 projects have been approved on the total investment of Rp. 8.32 trillion. It composes of 34 domestic projects at total investment of Rp. 1.19 trillion, and 307 foreign direct investment projects at total amount of Rp. 7.03 trillion. Compared to 2001’s figure, the number of projects is increasing by 57.1% but the value of investment has reduced by 35.3%, of which 74.4% is deprivation of domestic investment. The biggest four sectors of the investment are metal industry, chemical industry, food industry, and textile industry, while the most preferred areas are District of Bekasi, District of Bandung, District of Karawang, District of Bogor, and City of Bandung. Entering the 1 Interview with Mr. Herman Muhtar, Head of Chamber of Commerce and Industry (KADIN), City of Bandung. Although he disclosed that there are some obstacles encountered by local entrepreneurs, he admitted that in general, the investment climate is getting better under the recent decentralization. He pointed out that the current system on investment permit is much easier than the previous time.
  5. 5. first quarter of 2003, however, there is a promising trend, which is demonstrated by the improvement of approved projects and total amount of investment by 62.5% and 106.96%, respectively (See West Java Province Government – hereinafter is referred as to WJG – official website). Even though there is a good fashion of investment climate, it is rather dubious to say that decentralization plays a central role in promoting domestic and foreign direct investment (FDI). If decentralization is well managed and implemented, it is assumed, it would produce a conducive business atmosphere from which it would able to accelerate a bigger and faster investment growth. In other words, the better situation of investment in many local areas is a result of better macro political economy such as stable currency, finer security, good relation with donor countries, etc. Local Investment Office of Bandung City has also confirmed on the inability of decentralization to speed-up the transaction of investment. Some conditions might be engaged in this problem. First of all, District/City Investment Office has authority to manage and promote domestic investment only, while foreign investment remains the authority of central government. In addition, since fiscal affairs are also central government’s domain District/City government has no power to deliver fiscal incentives to vitalize the condition of local investment. Secondly, the Presidential Decree on investment authorities has not been launched yet, so that Province government and District/City Government have in many cases, encountered a kind of confusing mechanism, not to say overlap, investment authorities. The last reason is about technical aspect in which Local Investment Office of Bandung City was established just in 2001. Consequently, it focuses its programs on internal consolidation such as collecting data on local investment, discussing and establishing local regulation on investment, and even constructing building and providing equipments to support the new office.2 2. Physical Infrastructure The dysfunctional of infrastructure system in Bandung City is very widespread. Not only can this situation be observed under the current decentralization era, but it also happened in the previous system, which was very centralized. This is to say that neither centralization nor decentralization system can provide with a well-developed physical infrastructure networks. In other words, there is an insignificant correlation between the local government system and the quality and quantity of infrastructure development. The more influential factors affecting infrastructure development are budget sufficiency, participatory effective development planning, and commitment of local officers to implement the development planning consistently. Lacking of these three qualifications will lead to the devastation of physical development. As reported by the Head of Dinas Bina Marga (Road Service Department), about 50% or 1,000 km of 2,000 km drainage construction in Bandung City is damaged the most severe damage has been found in the trade and business centers and expanding areas such as Ujungberung, Gedebage, Bandung Selatan, Cigondewah, and Caringin. In addition, only a little portion of road infrastructure has been geared up with drainage networks. This situation contributes much to the incidence of flood during the rainy season (Pikiran Rakyat, September 19, 2003). Similar feature is also occurred in road infrastructure aspect. From the 2000’s data, of the total of 932,701 km, 242,570 km (26%) of road is sensibly damaged; 39,823 km (4.3%) is damaged; and 2,400 km (0.3%) is heavy damaged. It means that only less than 70% of total roads is considered to be satisfactory. Ironically, the new road construction was extremely sluggish, as indicated by the length of road in Bandung City area in 2000 and 2001, which were 932,701 km and 1,078 km, respectively (Bandung City in Figure, 2001). The Mayor of Bandung City has also confirmed that one of the most crucial problems in Bandung is the limited carrying capacity of roads. The average growth of new road constructions is only 1% per year, whereas the average growth of automobiles is around 11% per year. As a result, traffic congestions in Bandung City are becoming more severe day by day. This situation is aggravated by abandoned informal traders and traditional markets, which in many cases occupy 2 Interview with Mr. Yosep Heriansyah, Head of Information and Promotion of Investment Section, Local Investment Office (KPMD) of BCG.
  6. 6. some parts of highway (Pikiran Rakyat, August 24, 2002). There is another critical point contributing to such problem i.e. unsupportive endeavors from local parliament (DPRD). For example, in the FY 2002 BCG has proposed infrastructure projects at total cost of Rp. 45 billion, but only Rp. 7 billion was approved by DPRD. In this sense, there is a contradictive vision between the parliament members who did not see infrastructure development as a priority in Bandung area and executive officers that have different viewpoints.3 In fact, BCG needs more than Rp. 50 billion to construct new infrastructures and to maintain the existing one. To compensate the lack of funds, the government of Bandung City has requested grants from WJG and Central Government at total of Rp. 53 billion (Pikiran Rakyat, November 15, 2003). In anticipating such kind of traffic complexity, the government of Bandung City has underpinned three strategies of infrastructure development, those are, improving public transportation system, arranging vile surface environment, and building highway network system by manufacturing new highways, restructuring highway network, and broadening highway to integrate the whole area of Tatar Bandung or Bandung Raya (The Greater Bandung). In realizing those strategies, BCG is building flyovers (in Kiaracondong) and downtown toll roads (Paspati), and operating an “Excellent Service Route”, a new service of executive bus way. Furthermore, WJG in cooperation with PT Indonesia Transit Central has signed an agreement (MoU) to construct monorail networks in Bandung (Pikiran Rakyat, August 24, 2002 and September 8, 2003). 3. Education and Human Development As found in other sectors, decentralization framework does not produce significant progress in human development and education sector. The improvement in human development indicators is mainly because of recovery in macro economic aspects as well as political conditions. Economic turn down and up has indeed affected government’s performance in education sector. In Bandung City, for example, the number of schools has decreased during economic crisis from 1996/1997 – 1998/1999, and has started to improve in the period of economic recovery from 1999/2000 – 2001/2002. The idea is that decentralization has not brought about positive results in education sector yet, i.e. school facilities. However, decentralization allows local government to take strategic actions in dealing with awful problems faced by local citizens. When the number of school age children’s drop out was increasing, for instance, BCG and WJG has decided to abolish tuition fee for elementary school. From the available data, it can be seen that BCG’s performance in education is relatively good, both before and after the implementation of Law 22/1999. In terms of human development, for instance, Bandung City has experienced the best achievement in 1996, when it reached Human Development Index (HDI) at 74.3 point. Since then, in line with economic and political crisis, human development had also undergone deterioration up to 1999. Fortunately, in the following years, some progress shed light on the human development characterized by the improvement on HDI in 2000 and 2001 at 71.20 and 73.63, respectively. In addition, Bandung City’s HDI is always the highest among other Districts and Cities in West Java region. Even though the total index of human development was increasing, there was a slight decrease in the educational index particularly mean year of schooling in 2001. It means that many school age children had dropped out during that time. BCG and WJG reply this situation by composing plan on the deletion of tuition fee for elementary school starting from 2004. For sure, Bandung City’s budget will be very much depending on subsidy from central government to execute such policy (Pikiran Rakyat, November 5, 2003). In this case, BCG allocates Rp 270.15 billion for education sector in 2003, 29.4% bigger than the last year’s allotment (Republika, February 11, 2003). The other attempt to achieve BCG’s target of HDI at 80.00 point in 2010 is recruiting 1,700 new teachers in FY 2003 (LIN, 2003). In fact, improving the quality and quantity of teachers for all levels of school is only one of its policies. However, it is not so easy to realize such policies. As quoted by STPDN (2002: 157), UNDP 3 Interview with Mr. Asep C. Cahyadi, Head of Local Autonomy Development Section, Division of Governmental and Local Autonomy Affairs, BCG.
  7. 7. predicts that literacy rate of 100% in West Java region can only be achieved in the following 10 years, while nine-year basic education program can only be entirely completed in the next 13 years. Likewise, households’ full access to clean water will be ready after 37 years. 4. Environmental Protection It is rather deplorable that environmental quality has tended to decelerate in the decentralization era. Such tendency is also happening in Bandung City. The former Mayor wanted to build a modern apartment and business mall in Babakan Siliwangi, which is water-reservation area. Some amount of local income is expected from the project, though it will lead to deforestation of urban forest and depletion of ozone layers. At the same time, the Mayor also wanted to build shops or kiosks for informal traders (Pedagang Kaki Lima) in Tegallega area, which should be utilized as urban parks according to the local regulations. In this regard, the Local Regulation on Green and Open Space (Perda Ruang Terbuka Hijau) provides that green and open space in Bandung should be 20% of total area. The other violation of the rules is that all business centers/buildings are built without space for car parking and any other kind of open space. In fact, Local Regulation on Building Coverage Ratio (Perda Perbandingan Bangunan dan Lahan Terbuka) provides that 40% of the land should not be built.4 The other critical factor contributing to environment degradation is the changing functions of land uses. Many catchment areas have been altered into housing complexes and agricultural fields. There are two kinds of catchment areas, i.e. forest and non-forest. In the Greater Bandung, forest area comprises of 74,672.49 ha (45.87%), while non-forest area embraces 88,133.36 ha or 54.13% of the total of catchment area. The condition of forest area is relatively fair, but non-forest area is declining, both in quality and quality (Pikiran Rakyat, October 25, 2003). It is not surprising then, that the quality of environment in Bandung City has been dramatically dwindled. Otto Sumarwoto, an emeritus Professor in environmental science, said that the environment quality of Bandung City has reached outrageous level now, which can be observed from the increasing air and water pollution, and the shrinking of urban forest. It can be predicted that serious health problems such as respiratory syndrome and mental retardation would occur in the following 5-10 years (Kompas, July 14, 2003). To prevent such problems, land rehabilitation is substantially required. In this case, Bandung City needs at least 26,000 trees to be planted. Among those, 400 Mahoney and Golden Teak would be planted at Babakan Siliwangi area (Kompas, July 14, 2003). In addition, the new Mayor has declared his commitment to switch back the changing function of catchment area, including Tegallega area. The Mayor has also suggested Bandung residents to plant at least 1 tree in their surrounding house and to build a 1m-width and 2m-depth well as absorption of rainwater. This campaign will be prompted from Village Government and other institutions’ offices (Pikiran Rakyat, October 2, 2003). The new concern of BCG to formulate and implement sound and environmental-friendly policies is expected to improve not only the quality of environment, but also the quality of life for Bandung inhabitants in the future. 5. Development Planning, People Participation and Community Development In the recent era of decentralization, there are many promising phenomena of increasingly active public participation in the development process in Bandung City. People tend to have a willingness to, directly or indirectly, involve in a small or larger scale of developmental projects in their communities. In Sub-District of Marga Cinta, for example, motivation and awareness of inhabitants to realize a better environment is increasing. This is indicated by self-help capacity (swadaya), which increases from time to time. In a case of ditch channel construction in Rancabolang Street, it costs more than Rp. 86 million with only less than 15% (Rp. 11,5 million) is borne by Sub-district government. More than 85% of total expenditure (around Rp. 75 million) relies on charitable donation of local people. Astonishingly, the Head of Sub-District of Marga 4 Interview with Mr. Dada Rosada, Mayor of Bandung City.
  8. 8. Cinta asserts that the accumulation of swadaya in Marga Cinta reaches more than Rp. 800 million / year. Similar features can be found in Gumuruh Village, Sub-district of Batununggal. Voluntary private funds in this region during the last three years (2000-2002) totaled at Rp. 1,2 billon.5 In the business sector, local entrepreneurs admit that BCG always include and invite them in the forum of formulating Local Government’s policies, especially regulation on levies and charges. Moreover, there are no discrimination policies and treatments between indigenous local businessmen and Indonesian Chinese descent. KADIN of Bandung City has even established a Chinese Committee in its structure to accommodate Chinese-descent businessmen’s interests.6 The most surprising phenomenon is probably the establishment of social groups and organizations as a basis for strengthening civil society. From 1998 now on, hundreds of social organization were formed, varied from labor advocacy, small scale business promotion, environmental protection, community forum, public service delivery, educational provision and cultural encouragement, etc. In this sense, the case of Sawarung, an independent, non-partisan, and non-profit organization, might be worth to explain the fact of emerging civil society power in Bandung City. Sawarung was set up in 1999 and it has now built a network and coordinated 45 civic organizations. It was built aimed to fortify people’s bargaining power through the instigation of civil organizations and the intensification of their roles as social control over governmental bodies, provider of basic services, and development actor in local level. (Sawarung, 2003: 2). Gerakan Lumbung Kota or GLK, one of the Sawarung’s members, is another outstanding case. It played a crucial role in social development during most severe economic crisis (1999-2001). By mobilizing around 400 heads and secretaries of neighborhood associations, it disseminated three main social actions: initiating moral movement, collecting funds as scholarship for school age children, and empowering micro enterprises by giving soft loan to local entrepreneurs. The method of accumulating funds is by gathering and selling second-hand and recyclable things, which is handled by Cepi Radio Station. On average, it could earn Rp. 6-8 million / year that would be utilized to buy sembako or daily basic needs such as rice, sugar, cooking oil, wheat, etc. Those sembakos are sold to the poor at a lower price, i.e. only 40% of normal price. The money collected, then, would be granted to poor people through scholarship and micro finance program. At most, each micro entrepreneur might get Rp 200.000.7 The other notable impact of decentralization on community development in Bandung City is the potential of neighborhood associations to be entrepreneurial. The neighborhood association in Cigadung Village Government, City of Bandung, is probably an extraordinary case. Previously, the functions of neighborhood associations are simply related to social affairs such as conflict among members, incidence of mourning, sport and religious activities, etc., and, to some extent, dealing with population registration activities. Moreover, they often associated with government’s “agents”. Surprisingly, they have an aptitude to be an entrepreneur society. There is a piece of land in the area of Wijayakusuma housing complex in Cigadung. It was used to collect and store garbage that not only bothered the inhabitants due to awful smell and view; it was also harmful for health and environment. Under the agreement of all dwellers, the operation method was changed. The association (RT) built some small kiosks and leased them competitively to local businessmen that should pay monthly fees. The changed use of the land leads to a cleaner, healthier atmosphere and wealthier neighborhood association. In turn, their financial capacity is getting improved, which indirectly, supports local government’s financial capacity. This is just an example of empowered community in the development management. The basic notion is how to enlarge community groups’ rights and give them trust to manage their own residence, interests, and all of their household affairs. Despite the excellent picture of people participation appearance, there are at least two remarks should be underlined. Firstly, it is true that City Government has practiced consultation forum with all stakeholders before coming up with decision making. Head of Chamber of 5 Interview with Mrs. Tiny Rahayu, Head of Marga Cinta Sub-district and Mr. Medi Mahendra, former Head of Gumuruh Village Government, Sub-district of Batununggal. 6 Interview with Mr. Herman Muchtar, Head of Chamber of Commerce and Industry (KADIN), City of Bandung. 7 Interview with Mr. Dedi Hidayat, Chairperson of Gerakan Lumbung Kota (GLK).
  9. 9. Commerce and Industry, City of Bandung, and some NGO activists has confirmed on this matter. Unfortunately, the final decisions made by the City Government are oftentimes do not accommodate discussion and agreement in the consultation stage.8 In that sense, local authorities seem to deploy a “benign neglect”, where consultation forum is viewed merely as a formalized democratic mechanism of developmental decision-making process. The second highlighting is related to the sustainability and consistency of social organizations’ movement and programs. Many programs are, in fact, temporary. In the case of GLK, its missions are shrinking as its members are decreasing. Consequently, its programs on moral enforce, scholarship for elementary students and empowerment of micro business might be halt in the near future. In such a case, the power of civil society would weaken, whereas government’s superiority would reenergize to dominate the local development process. In other words, the building structure of local good governance would be failed to reconstruct a more balanced relation between public and private sectors. 6. Public Service Delivery There are at least two delightful phenomena concerning public service delivery in Bandung City. Firstly, the services provided by the city office (public register and permits issuance) were in need of improvements. One-stop service units (Kantor Pelayanan Satu Atap) were established, where citizens could obtain identity cards, business permits, etc. at a single counter, at a fixed fee within a fixed period of time. The establishment of these units resulted in the rationalization of other local government business processes. This initiative has spread to other local government organizations, and with that to the need for more professional staff, and better working procedures. Some responded to these developments by preparing handbooks detailing local government procedures, and introducing a system of “fit and proper” tests, often conducted by independent outsiders, to select the best candidates for the managerial positions within the local government. Secondly, many of community members and groups are enthusiastic to directly participate in the basic service delivery particularly clean water. It is widely recognized that public participation leads to a better picture of citizens’ satisfaction with service delivery and the need for improvements in public efficiency and effectiveness. During field survey, two cases of self-managed and self-delivered of clean water services were found, i.e. in Rukun Warga (neighborhood association) No. 11 of Cibangkong Village, and in neighborhood association No. 1 of Gempol Sari Village. Generally, they dig a deep artesian well (around 60m) and sell the water to the community members in the vicinity of the well at a cheaper price compared to that sold by the government. There are two reasons why community groups have initiated a self-help mechanism on service delivery. On the one hand, from the government side, it is deemed that government has failed to provide public services at satisfactory level. Clean water service might be the worst among the other government services. People can barely obtain sufficient water in a day, so that many times they must fulfill their daily needs from water peddler. On the other hand, people is getting more conscious on their strengths and resources, so that they are becoming more eager to take part in the process of local development activities. Based on these grounds, people is trying to optimize the three basic roles of community organization, i.e. improving public pressure, expanding alternative social institution, and accumulating local resources. From this perspective, people are not only seen as customers or users of government’s services, but rather, they have potential to be public service provider. At the same time, oftentimes they also take part as concern groups or pressure groups to monitor the government policies and performances in providing public services. The FP3 or Forum Pelanggan Pelayanan Publik (Public Service Consumer Forum), for example, is a self-donated private organization aims at cultivating public participation as well as compelling local government to improve its accountability in the process of public service provision. The case of FP3 as well as community groups in Cibangkong and Gempol Sari clarify the varied roles played by social organizations. 8 Interview with Mr. Hikmat N., staff of Program Division, Sawarung
  10. 10. Concluding Remarks The above description implies that Law 22/1999 has successfully brought local government to a right path to be democratic. In addition, Law 22/1999 brings about a new paradigm to empower all social elements in order to accelerate good governance in the regions. Good governance in this sense means a harmonious interaction and cooperation among governmental elements and citizens in the region in order to build up participatory, transparent, and sustainable regional development programs. Even though it does not reach an ideal stage of democracy yet, but local citizens’ awareness to participate in the development process and local government’s acquiesce to be more transparent and accountable are much better than those under centralized regime of New Order. It can be judged that the era of “nominal democracy” has steadily been passed through. Nevertheless, it can also be implied from the previous parts that acceleration of development process and performance are still far from satisfactory. In other words, there is a slight gap between the rapidity of democratic movement and the velocity of development progress. In such circumstance, the role of capacity building is very essential to bridge and minimize the gap. One more thing, revision of Law 22/1999 is required in order to accelerate local development. This should be accompanied by proper capacity of the legal drafters to revise it truthfully, and dedication of government’s officials to implement it consistently.
  11. 11. Bibliography Asia Foundation, 2002, Decentralization and Local Governance in Indonesia: 1st Indonesian Rapid Decentralization Appraisal (IRDA), Jakarta, February 28. Hadiz, Vedi R., 2003, Decentralization and Democracy in Indonesia: A Critique of Neo-Institutionalist Perspectives, Working Papers Series No. 47, City University of Hong Kong: Southeast Asia Research Center. Kolehmainen-Aitken, Riitta-Liissa, 1999, “Decentralization of the Health Sector”, in World Bank Institute (ed.), Decentralization Briefing Notes, WBI Working Papers. McLean, Keith and Elizabeth King, 1999, “Decentralization of the Education Sector”, in World Bank Institute (ed.), Decentralization Briefing Notes, WBI Working Papers. Moore, Mick and James Putzel, 1999, Politics And Poverty: A Background Paper For The World Development Report 2000/1. Seddon, Jessica, 1999, “Decentralization of Infrastructure” and “Decentralization and Economic Growth”, in World Bank Institute (ed.), Decentralization Briefing Notes, WBI Working Papers. SMERU, 2002, Regional Autonomy and the Business Climate: Three Kabupaten Case from West Java, research report, Jakarta. Work, Robertson, ed., 2002, The Role of Participation and Partnership in Decentralized Governance: A Brief Synthesis of Policy Lessons and Recommendations of Nine Country Case Studies on Service Delivery for the Poor, New York: UNDP.

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