Presentation Questioning Public Sector Integrity

Questioning the Decentralization System in Managing Public Sector Integrity in Indonesia I  Made  Bram  Sarjana   The  Government  of  Badung  Regency,  Bali   Presented  on  EROPA  Conference  2018  in  Nusa  Dua,  Bali,  Indonesia  

Background •  Trust  is  an  essen+al  element  for  public  sector  integrity     •  Without  trust  there  will  be  no  par+cipa+on,  without  par+cipa+on   there  will  be  no  development   •  Public  trust  shall  grow  when  government  works:  public  services   running  well,  responsive,  easy  to  access,  effec+ve,  and  accountable.   •  An  interes+ng  fact  on  trust  was  revealed  by  Transparency   Interna+onal  :  most  of  the  people  do  not  trust  the  government.  

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•  Transparency  Interna+onal   through  their  TwiCer  status   in  29  June  2018  at  2:00  AM     •  hCps://twiCer.com/ an+corrup+on/status/ 1012621747600941057     3  

•  In  Indonesia,  public  trust  is  also  an  important  issue   •  The  abundance  of  public  distrust  has  even  driven  the  people   movement  for  change  in  Indonesia:  the  change  of  regime   •  Reforma+on  movement  reached  its  peak  in  1998,  by  the  stepping   down  of  President  Soeharto   •  The  spirit  of  reforma+on  movement  was  to  create  a  trustworthy   government  and  democra+c  system   •  A  new  system  was  then  assembled  and  prepared:  decentralizaJon,   believed  and  expected  to  answer  the  need  for  democra+za+on,  good   governance,  economic  and  poli+cal  stability   4  

Indonesia  before  decentraliza6on •  Before  decentraliza+on  everything  was  about  chain  of  command,   from  central  government  to  local,  from  president  to  the  people  (very   strong  state  control  over  people)     •  A  very  strong  state  however,  brings  nega+ve  side:  lack  of  check  and   balances  mechanism,  monopolis+c  governance,  tends  to  corrupt   •  Under  such  system  transparency,  accountability  and  integrity  as   basic  principles  of  public  administra+on  (Armstrong,  2005)  were  not   able  to  be  established.   •  Decentraliza+on  then  was  chosen  as  a  new  path  for  a  reformed   Indonesia,  star+ng  in  1999   5  

Theories  of  decentraliza6on •  General  defini+ons:  transfer  of  authority  and  money  from  na+onal  to   sub  na+onal  level;  consists  of  administraJve,  poliJcal,  and  fiscal   decentraliza+on   •  Decentraliza+on  includes  the  transfer  the  responsibility  star+ng  from   planning  stage,  execu+on,  and  accumula+on  of  financial  resource,   flowing  from  naJonal  into  lower  level  (Rondinelli  in  Tambulasi  &   Kayuni,  2007)   •   An  instrument  to  manage  policy  governance  with  bigger  authoriJes   distributed  to  local  governments  in  order  to  make  governance  and   development  becomes  more  effecJve  and  efficient  (Kumolo,  et.  al.,   2017).     6  

Why  decentraliza6on? •  Decentraliza+on  is  essenJal  to  implement  good  governance   principles  (Green,  2005;  Bevir,  2009)   •  Decentraliza+on  associated  with  the  process  of  democraJzaJon  and   empowerment  in  developing  countries  (Bardhan  &  Mokherjee,  2006)   •  An  instrument  to  build  trust  between  central  and  local  government,   increases  government’s  accountability,  efficiency,  and  becomes   closer  to  the  people  (Crook,  2003)    

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Precondi6ons  for  an  effec6ve  decentraliza6on •  World  Bank  (Green,  2005):   •  •  •  •  • 

ensuring  local  financial  resources  match  the  ability  to  provide  local  public  services     local  community  should  be  aware  of  the  cost  of  services   community  should  be  able  to  express  their  desires  in  a  meaningful  way     transparency  and  accountability  of  local  government  ac+vi+es       the  legal  and  ins+tu+onal  system  should  match  the  poli+cal  objec+ves    

•  Bevir  (2009):  

•  the  func+oning  of  local  democracy  which  make  local  government  legi+mate     •  fiscal  autonomy  that  meet  local  needs   •  competent  local  governments’  officials  

•  (Keban,  1999):    

•  capacity  building  should  be  improved  at  local  level,  enabling  them  to  formulate  and   implement  policies  correctly       8  

Indonesia  Under  Decentraliza6on  

•  Decentraliza+on  was  not  long  and  well  planned  before  implemented   •  During  the  first  phase  there  was  a  euphoria  of  decentraliza+ons   •  Poli+cal  elites  proposed  the  crea+on  of  federal  states   •  Chain  of  command  were  shortened;  head  of  local  governments  become   “small  kings”  

•  Decentraliza+on  in  some  degrees  have  been  introduced  during  the   Netherlands  and  Japan  occupancy;  but  only  to  serve  the  interests  of   the  colonial  authority     •  In  the  independence  era  un+l  Soeharto  era;  decentraliza+on  was  to   consolidate  the  layers  of  government   9  

•  Afer  reforma+on  movement  (1998),  some  new  laws  were  set  up  to   implement  poli+cal,  administra+ve  and  fiscal  decentraliza+on   •  The  first  package  was  Law  Number  22  Year  1999  on  regional  autonomy  and   Law  Number  25  Year  1999  on  Financial  Balance  Between  Center  and  Local   Government.     •  In  2004,  Law  Number  22  Year  1999  on  regional  autonomy  was  changed  by   Law  Number  32  Year  2004,  and  recently  changed  by  Law  Number  23  Year   2014.     •  Following  the  improvement  of  law  concerning  poli+cal  decentraliza+on,   Law  Number  25  Year  1999  on  Fiscal  Balance  Between  Central  and  Local   Government  also  changed  by  Law  Number  33  Year  2004  Fiscal  Balance   Between  Central  and  Local  Government     10  

•  Decentraliza+on  occurring  since  1999  un+l  present  day  in  Indonesia  can  be   considered  as  a  revolu+onary  one     •  Under  this  new  system,  people  use  their  rights  to  build  the  government    

•  directly  vote  their  member  of  house  of  representa+ves  at  local  and  center  level,   their  senator  to  represent  their  indigenous  rights,  vote  for  the  governor,  vote  for  the   head  of  regency  or  mayor,  and  also  vote  for  the  president.    

•  Local  governments  have  authori+es  to  develop  their  economic  poten+al   •  Decentraliza+on  also  open  opportunity  for  the  forma+on  of  new   autonomous  governments  at  provincial  and  regency  level     •  Since  the  star+ng  of  decentraliza+on  in  1999  un+l  December  2017  there   are  34  Province,  416  regencies  and  98  ci+es  in  Indonesia     11  



Number  Regencies  in  Every  Province,  2013-­‐2017   Province   (1)  

Aceh   North  Sumatera     West  Sumatera     Riau   Jambi   South  Sumatera   Bengkulu   Lampung   Kepulauan  Bangka  Belitung   Kepulauan  Riau   DKI  Jakarta   Jawa  Barat   Jawa  Tengah   DI  Yogyakarta   Jawa  Jmur   Banten   Bali   West  Nusa  Tenggara   East  Nusa  Tenggara   West  Kalimantan   Central  Kalimantan   South  Kalimantan   East  Kalimantan   North  Kalimantan   North  Sulawesi     Central  Sulawesi   South  Sulawesi     South  East  Sulawesi   Gorontalo   Sulawesi  Barat   Maluku   North  Maluku     West  Papua     Papua   Indonesia  

2013   (2)   18   25   12   10   9   13   9   13   6   5   1   18   29   4   29   4   8   8   21   12   13   11   7   4   11   12   21   12   5   6   9   8   12   28   413  

2014   (3)   18   25   12   10   9   13   9   13   6   5   1   18   29   4   29   4   8   8   21   12   13   11   7   4   11   12   21   15   5   6   9   8   12   28   416  

2015   (4)   18   25   12   10   9   13   9   13   6   5   1   18   29   4   29   4   8   8   21   12   13   11   7   4   11   12   21   15   5   6   9   8   12   28   416  

2016   (5)   18   25   12   10   9   13   9   13   6   5   1   18   29   4   29   4   8   8   21   12   13   11   7   4   11   12   21   15   5   6   9   8   12   28   416  

2017   (6)   18   25   12   10   9   13   9   13   6   5   1   18   29   4   29   4   8   8   21   12   13   11   7   4   11   12   21   15   5   6   9   8   12   28   416  

Source:  Sta+s+cs  Indonesia   12  

•  A  wide  power  and  authori+es  given  to  local  governments  should  be   able  to  boost  the  development  of  regions  in  Indonesia  and  the   na+on.     •  Unfortunately,  study  shows  that  the  crea+on  of  these  new   autonomous  regions  have  not  fulfill  the  desire  to  improve  regional   development,  economic  disparity  among  regions  remains  high.   •  The  decentraliza+on  of  power  and  finance  to  local  governments  do   not  necessarily  improve  the  regional  economic  development.     •  Study  by  Wahyuntari  and  Pujia+  (2016)  explains  during  2009  to  2013,   economic  disparity  in  Central  Java  Province  was  the  second  highest   afer  DKI  Jakarta  Province,  among  other  provinces  in  Java  Island       13  

Economic  Growth  and  Williamson  Index  Among  Province  in  Java  Island   in  2009-­‐2003  

Province  

Regional  GDP  (%)  

Rank  

Williamson   Index  

Rank  

DKI  Jakarta  

6,18  

2  

0,89  

1  

East  Java  

5,85  

3  

0,14  

3  

Central  Java  

5,83  

5  

0,21  

2  

Jogjakarta  Special   Region  

5,04  

6  

0,05  

5  

East  Java  

6,55  

1  

0,02  

6  

Banten  

5,84  

4  

0,10  

4  

Source:  Wahyuntari  and  Pujia+  (2016)    

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Challenges  to  Integrity  Under  Decentraliza6on  

•  New  leaders  who  were  born  through  direct  general  elec+ons  were   expected  to  become  beCer  leaders,  more  responsible  and   accountable  to  their  cons+tuent.     •  The  rise  of  these  new  local  authori+es,  formed  through  direct   elec+ons  somehow  does  not  necessarily  correlate  with  the   improvement  in  public  services  and  public  sector  integrity.     •  The  problem  is  the  recruitment  mechanism  for  the  candidate  of  head   of  local  governments  or  house  of  representa+ves.     •  These  new  poli+cal  elites  are  pragma+sts  and  short  term  oriented,   with  the  goal  only  to  win  the  next  general  elec+on.     15  

•  Poli+cal  recruitment  that  spends  a  lot  of  moneys  resulted  in  the   existence  of  groups  of  governors,  head  of  local  governments,   member  of  house  of  representa+ves  who  have  invested  a  lot  of   moneys  to  win  the  elec+on.     •  Some  who  are  successfully  take  the  office,  use  their  power  to  regain   the  moneys  they  have  spent  or  if  possible,  even  to  gain  profit.     •  Corrup+ve  behavior  is  then  decentralized  and  spreaded  from  central   to  local  

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•  The  Corrup+on  Eradica+on  Commission  Annual  Report  2016  reported  that   poli+cal  actors  involved  in  32%  of  corrup+on  cases  (2004  -­‐2016)   •  The  Corrup+on  Eradica+on  Commission  Annual  Report  2017  reported  that   the  commission  has  caught  144  members  of  house  of  representa+ve  at   central  and  local  level,  18  governors,  71  head  of  regencies  and  mayors,  and   175  high  level  bureaucrats  were  caught  for  corrup+on  cases  (2004-­‐2017).   •  Recently,  40  members  of  local  house  of  representa+ve  of  Malang  District   were  caught  by  The  Corrup+on  Eradica+on  Commission  for  corrup+on.   •  Corrup+on  cases  were  found  in  public  goods  and  services  procurements,   public  budget  execu+on,  licensing,  fees  and  money  laundering.       17  

•  Even  common  ci+zen  cannot  escape  from  the  corrup+ve  behaviors     •  in  private  sectors,  the  +ght  compe++on  in  business  environment   makes  businessmen  tend  to  pay  bribes  to  head  of  local  governments   of  head  of  agencies  in  order  to  win  goods  and  services  procurements     •  Other  corrup+ons  cases  also  involving  non-­‐governmental   organiza+on  or  societal  organiza+ons  ac+vists  by  ac+ng  as  if  they  are   pressure  groups.    

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Promising  Trends  Under  Decentraliza6on  

•  Decentraliza+on  rise  awareness  for  compe++on  among  local   governments  in  developing  their  region   •  S+mulates  local  governments  to  innovate  many  kinds  innova+on  of   public  services  delivery  in  accordance  to  their  poten+als  and   compe++ve  advantages.     •  State  Employment  Agency,  will  block  civil  servants’  employee   iden+fica+on  number,  verdict  by  court  decision  with  permanent  legal   force  for  corrup+on.  The  blocking  is  expected  to  deter  and  prevent   corrup+on  among  civil  servants  in  Indonesia.       19  

Conclusions •  Decentraliza+on  have  not  sa+sfactorily  resulted  in  boos+ng  the   development  because  it  was  implemented  in  a  very  limited  +me.   •  Decentraliza+on  was  forced  and  served  only  as  an  instrument  to   answer  student  reforma+on  movement,  poli+cal  and  economic  crisis   and  threat  of  disintegra+on  in  1998.       •  Precondi+ons  for  a  successful  implementa+on  of  decentraliza+on;  a   good  governance  principles  need  to  be  developed  further.   •  Ci+zens,  private  sectors  and  civil  society  organiza+on  should  also   push  public  sector  integrity  as  important  agenda.  They  should  take  an   ac+ve  part  in  shaping  reformed  governance  system  under  good   governance  principles.   20