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Decentralization and Democratization in Indonesia

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Published: Tue, 27 Feb 2018

Chapter Six

Lessons and Implications

The changes in Indonesia have been incremental…We still have the New Order, or most of it. Anyway, the corrosive parts are still reigning in. We have a new administration but the New Order keeps coming back in various ways.

Dwight T. King[1]

It is a paradox that, in an era when democracy seems to have emerged as the single most acceptable form of political organization, more and more people in both mature and young democracies are disengaging from the political process.

Knight, Chigudu & Tandon (2002)

…a breakdown of an authoritarian regime may be reversed…even if democracy is established, it need not be consolidated. Under certain conditions, democratic institutions may systematically generate outcomes that cause some politically important forces to opt for authoritarianism. Hence, consolidated democracy is only one among the possible outcomes of breakdown of authoritarian regimes.

Pzeworski (1991: 51)

Introduction

The discussion in previous chapters provides a foundation for important theoretical insights regarding the nature and the significance of decentralization in Indonesia, as well as its relation to democratization in the regions. I have emphasized how decentralization practices in the regions promote popular participation in local political processes beyond electoral participation.

By and large, the experiences of Bandung District and City of Cirebon in implementing decentralization between 1945 and 2006 lend support to the argument that decentralization does not necessarily lead to the growth of local democracy within which local ordinary people are able to exert their power to significantly influence local decision-making process. Although promoting democracy has become one of the stated goals of several decentralization laws, their enforcement in both regions has not promoted meaningful inclusion of local ordinary people in local political processes beyond electoral participation. In fact, it has been the weakest point of decentralization practices in both regions. Overall, the two case studies share a similar theme, namely that power remains actually concentrated in the hands of local elites and hence, local communities are constantly marginalized. Against this backdrop, in this chapter, I will examine a number of factors which have circumscribed the democratic potential of the decentralization program in Indonesia.

Based on the experiences of a variety of countries, some theorists suggest that successful decentralization policies are contingent upon certain individual or collective prerequisites. These include: a high degree of central state capacity, a well developed civil society, strong political will among national as well as local political elites, strong social support, a long experience of democracy, a well-established multi-party system, strong enabling legal frameworks, and a culture of accountability, etc (Rondinelli, McCullough & Johnson 1989: 77-78; Crook & Manor 1995: 327; Ardaya & Thevoz 2001: 220; Heller 2001: 138-139). Regarding this assertion, analysts also emphasize that the extent to which these conditions work varies across countries. This means that some conditions work relatively well in certain countries, but in others they do not effectively facilitate the stated goals of decentralization policies (Kulipossa 2004: 771). In addition, Smoke (2003: 12) and Kulipossa (2004: 772) also draw attention to the fact that there are cases where decentralization can achieve its potential benefits in the absence of those conditions, as well as cases where most of those prerequisites are in place, but decentralization has been undermined.

Against the above line of thought, I would argue here that to a certain extent, the unfulfilled democratic potential of decentralization practices in Bandung and Cirebon can also be associated with the absence of some of the above favourable conditions. These include weak political will among both national and local political authorities, the absence of a vibrant civil society, and the lack of an attentive public. Needless to say, these factors vary across time and regimes. Above all, the absence of these favourable conditions for fulfilling the democratic potential of decentralization appears to result from three aspects: first, all along, decentralization in Indonesia has been perceived and embraced by Indonesian political elites mainly as a matter of political strategy; second, the long-standing authoritarian system of government; and third, the primacy of pragmatic over political decentralization approach, both normatively and empirically.

Decentralization in Indonesia: a matter of regime’s political strategy?

Among the most important factors which determines the design and the actual practices of decentralization and in turn, its expected consequences (e.g., improving public service delivery, maintaining national integration and promoting local democracy) is the motivation of key actors in adopting the policy in the first place (Selee & Tulchin 2004). The experiences of many developing countries in Asia, Africa, and Latin America, for instance, attest that the motives of politicians that embrace decentralization policies are not necessarily as virtuous as those who design them. In fact, Smoke and Gomez (2006 : 351; see also, for example, Eaton 2001a; Shah & Thompson 2004: 3-4) observe that despite the efficiency and good governance rhetoric surrounding decentralization, the underlying impetus has been inherently political, meaning that the adoption of decentralization has been linked to central governments’ desire to accomplish their own particular political interests. The factors underlying political interest are country and regime specific. They include, for instance, shoring up their legitimacy in the eyes of citizens usually amidst national political crisis, competition with rival political parties for popular support, pressure from subnational governments for more powers, and opportunity for a ruling party to consolidate power (Selee & Tulchin 2004: 299-302; Smoke & Gomez 2006 : 351). Many observers believe that these kinds of political motives have partly accounted for the failure of decentralization practices in many developing countries to deliver its democratic potential (Eaton 2001a; Friedman & Kihato 2004; Oxhorn 2004).

Indonesia’s decentralization experience is not an exception to the above phenomenon. Although promoting democratization has been one of the stated goals of Indonesia’s decentralization programs, there has been significant gap between rhetoric and reality. The continuous marginalization of local people from local political processes has been partly rooted in the ‘undemocratic’ political motives of both national and local political elites in adopting and implementing decentralization policy. As explained in Chapter Three, decentralization in Indonesia has never been constructed in a political vacuum. Hence, I would argue that the degree, pattern and process of decentralization has been strongly influenced by, borrowing Montero and Samuels’ term (2004: 5), political determinants, i.e., regime responses to changing conditions and incentives within the context of rapid political and economic changes.

During the revolution era, decentralization policies recognized the principle of extensive autonomy in all regions of the newly independent Republic. However, such policies were actually constructed by national political elites as a means of establishing and maintaining national authority over many already operating local governments in those regions previously occupied by the colonial government. The polices were also constructed to fulfill other political ends, namely to gain international recognition, as contained in both Law No. 1 of 1945 and No. 22 of 1948 in the face of Dutch accusations that Indonesia was a puppet state of the Japanese. Thus, despite official claims that decentralization was embraced as an indispensable strategy in materializing a democratic system due to the country’s size and diverse characteristics, the embrace of the policy during this period was not genuinely related to the intention of developing meaningful democratic system within the country since those two basic laws were not followed by any clear operational directions whatsoever on how a democratic system of government would be crafted on the ground. This claim is underscored by the fact that there was no significant alteration in terms of local political processes in Bandung, Cirebon or other regions in the country. As Maryanov (1958: 9) also observed,

Many of the institutions and practices adopted or utilized by independent Indonesia have been reflections of those established by the Netherlands East Indies…alterations in governmental structure turned out to be minor…patterns of administrative behavior remained rooted in the Dutch traditional procedures.

Accordingly, the experiences of both Bandung and Cirebon during post-independence until mid 1950s revealed that, except for the establishment of local government structures, the enforcement of Law No. 1 of 1945 and No. 22 of 1948 allowed neither effective decentralization nor democratization in the regions. Needless to say, the political situation during revolutionary era also contributed to the limited enforcement of the policies in the regions.

By the same token, there were three decisive political factors which led national political elites to adopt advanced decentralization policy as contained in Law No. 1 of 1957 which “greatly increased the power of elected legislative councils in the provinces, regencies, and municipalities” and set for wider regional authority vis-à-vis the central government (Feith 1962: 552). These factors were, first, a kind of political promise by the government of Republic of Indonesia to the former constituent states of the Republic of the United States of Indonesia―a federal structure created by the Dutch― when they voluntarily decided to join the Republic of Indonesia to establish the Unitary State of the Republic of Indonesia. Second, the electoral calculations of various political parties in the Constituent Assembly to have wider mass bases in the regions and to play more influential roles in regional politics. And third, forestalling regional rebellions rooted in growing regional dissatisfaction concerning the central government’s unfulfilled promises to carry out development. This was intertwined with other issues such as ethnic tension, economic imbalance and political rivalry between politicians in Java and the Outer Islands. Accordingly, most of the advanced provisions within Law No. 1 were considered to be immediate responses to the above political factors, such as the recognition of the principle of extensive autonomy which was applied based on the capacity of respective local governments and the election of heads of regions by the DPRDs. In addition, the direct election of members of the DPRD and the issuance of Indonesia’s first Fiscal Balance Law within the same year were also seen as inseparable efforts by national political elites to respond to those political factors.

In turn, however, similar to its predecessors, such pragmatic and short term political calculations by national political elites prevented decentralization achieving its idealized outcomes. As Bandung and Cirebon’s experiences attest, until late 1950s, there was relatively little effective power actually decentralized. In addition, one might conclude that with the introduction of direct election of DPRD members and the election of head of region by the DPRD, local democracy was being crafted on the ground. However, it was not accompanied by channels of popular participation beyond the election. Recapping the above political motives in adopting such advances provisions in Law No. 1, neither central government policy makers nor democratically elected local governments in either case study considered this issue as among their political goals. Accordingly, the two case studies demonstrate that the dynamic of political parties and decentralization practices in Bandung and Cirebon clearly did not make local political process more open to participation by local people.

Decentralization practices during the Sukarno and Suharto eras obviously confirm the argument that decentralization can be applied within authoritarian regime (Eaton 2001a: 3; Montero & Samuels 2004: 10). These cases, however, it was by no means aimed at achieving the various virtues routinely discussed by democratization theorists, but rather at tightening their control over the apparatus of local government at all levels in order to facilitate an authoritarian system. This was particularly fulfilled by making both subnational executives and legislatures appointed and hence, accountable to the national authorities. Thus, these local apparatus were nothing but the instruments of central government with their main function representing the central government’s interests in the regions.

Yet again, such decentralization was not made in a political vacuum. Prior to the enforcement of Presidential Edict No. 6 of 1959 concerning Regional Government and Presidential Edict No. 5 of 1960 regarding the Gotong Royong Regional Representative Council and Regional Secretariat (Sekretaris Daerah), Indonesia was hit by escalating political turbulence due to the outbreak of rebellions in Sumatra and Sulawesi, the repeated collapse of governing coalitions at the national level in addition to the failure of the Constituent Assembly to make a replacement for the Provisional 1950 Constitution. In turn, these aspects triggered the issuance of a wave of government regulations by Sukarno intended to overhaul the system of government based on his personal concept of Guided Democracy―”a democracy with a leadership”(van der Kroef 1957: 115). This concept was believed to be an alternative to troublesome “Western concepts of parliamentary democracy” which had supposedly led to the above political turbulence due to the weakness of government authority and the vehemence of political opposition (van der Kroef 1957: 113). Thus, the new arrangements in local governance were specifically aimed at facilitating Sukarno’s own concept of Guided Democracy, which required a total subservience of local governments to central government policies. Sukarno himself was closely involved in setting in place local government institutions, such as heads of regions and local councils.

Suharto did not loosen up central control when he took over from Sukarno following the abortive conspiracy by left-wing officers in 1965 until his demise in 1998 (Malley 1999: 75). In fact, severe economic and political crisis inherited from the previous regime contributed to the deepening of authoritarianism that fostered a highly centralized system of government. Suharto’s regime believed that this mode of government could retain political and economic stability as its ultimate basis for overcoming the crisis. Another important determinant of Suharto’s centralistic policy towards local government system was the need to establish and consolidate an effective government administration over the vast and diverse country (MacAndrews 1986: 27-30). In turn, these variables contributed to the centralistic nature of New Order’s ‘decentralization’ law¾Law No. 5 of 1974 concerning The Basic Principle of Government in the Regional Government through which “the regions had neither influence over national government policies nor the power to control their own affairs” (Aspinall & Fealy 2003: 2). In essence, throughout Suharto’s regime, local governments were mainly as implementers of various policies constructed and financially supported by the central government.

Thus, both the Sukarno and Suharto regime indeed continued to adopt ‘decentralization’ policies as represented by the existence of the above law and regulations. However, all were intended to facilitate central government control and greater penetration of society in order to repress vehemence political opposition so that all central government policies and interests would be efficiently implemented down to the lowest level of governments without any resistance. Needless to say, such a mode of ‘decentralization’ provided no space for citizen participation.

Many Indonesians had great hopes that the so-called ‘Big Bang’ approach to decentralization launched in 2001 would at last bring into reality the various potential benefits of the policy, including democratic local governance. However, various studies (e.g., Anggraini 2007; The Asia Foundation, 2002a; The Asia Foundation, 2002b; Wardana 2007) including two case studies discussed in previous chapters confirm that the decentralization practices have gone without meaningful opening up institutional spaces for greater citizen participation, even though, promoting local democratic governance was among the stated goals of the ‘Big Bang’ approach.

Yet again, a key problem was that realizing democratic potential was not among the main goals of the national political elites when they adopted the policy. Rather, as explained in Chapter Three, the ‘Big Bang’ policy was motivated by a number of crucial political determinants that had little to do with developing local democracy or even with the neo-liberal agenda of achieving a more effective and efficient public service. These included forestalling national disintegration amidst the emergence of separatist movements and the vocal demands for more autonomy from some resource-rich regions (Sukma 2003: 65; Hidayat & Antlov 2004: 271; Hofman & Kaiser 2004: 17) ; restoring the legitimacy of the state as well as national elites following the collapse of Suharto’s regime, severe economic crisis, and the loss of East Timor (Smoke & Gomez 2006 : 353); transferring financial burdens from the center to the regions amidst dramatic decline of central government’s financial capacity following the economic crisis of 1997-1999 (Hidayat & Antlov 2004: 271-272); and, no less important, electoral calculus of Habibie’s to garner the support of the regions prior to the presidential elections (Hofman & Kaiser 2004: 17). It was for these strategic reasons, few of which were related to democracy, that the government was willing to embrace a radical approach to decentralization. Further consequence, as attested in Bandung District and City of Cirebon cases, neither clear and firm central government’s policies or programs, nor local governance meaningfully accommodated the rhetoric of promoting democratization into reality. Although it was often argued that local democracy was strengthened through the significant empowerment of DPRD vis-à-vis head of region (Rasyid 2003), this mechanism of political representation in fact could not deliver effective accomplishment of what Fung and Wright (2003: 3) called,

the central ideas of democratic politics: facilitating active political involvement of the citizenry, forging political consensus through dialogue, devising and implementing public policies that ground a productive economy and healthy society, and, in more radical egalitarian versions of the democratic ideal, assuring that all citizens benefit from the nation’s wealth.

The enforcement of Indonesia’s latest decentralization law―Law No. 32 of 2004―did not make local political processes more inclusive either, since the law was not motivated by the intention to so. On the surface, it might appear that the formulation of the law was driven by the intention of the Megawati administration to curb the emergence of various abuses of Law No. 22 of 1999, such as rampant corruption and blatant money politics, ethnic parochialism, and the proliferation of excessive taxes which had led to a high cost economy to name some of the most worrying signs. Many perceived that all of these problems were rooted in imperfect laws and the lack of a clearly designed plan (Turner et al. 2003; Legowo 2003; Legowo & Djadijono n.d).

More compelling is the argument that the attempt was a straightforward act of re-centralization. Such an act is particularly rooted in the nature of decentralization itself, which is not merely as an administrative business, but rather it involves the distributional struggles between national and subnational elites regarding control over local resources (Slater & Watson 1989: 511; Montero 2001: 44-45; Hadiz 2003b: 123). Accordingly, meaningful decentralization always faces enormous political obstacles and can be subjected to serious setbacks. One of the salient challenges is the preference of national elites to slow down the process of decentralization and to reinforce their attempts to control it. As Eaton (2001b: 102) suggests, “national politicians can and do continue to use their legislative authority to modify the initial decision to decentralize”. Thus, for national politicians, “decentralization is neither inevitable nor irreversible” (Eaton 2001b: 101). I would suggest that the enforcement of the latest Indonesia’s decentralization law―Law No. 32 of 2004―perfectly supports this line of argument. This contention is further strengthened by the fact that Law No. 32 restores and strengthens the province and the Ministry of Home Affairs’ positions in regional affairs at the expense of district governments’ authority (Eko 2005: 27-29; Ryaas Rashid as cited in Myala 2005).

The only new provision within Law No. 32 of 2004 embraced by many as a significant leap in decentralization and local democratization efforts regarded the direct election of heads of regions However, as Fung and Wright argues (2003: 3), the election of both legislative and executive offices are not sufficient to accommodate the influence of local ordinary people on local political processes beyond the election. As the experiences of Bandung and Cirebon attest, there has not been any significant alteration in terms of developing inclusive local political process in the aftermath of the head of region elections. It must be admitted that the promulgation of Local Regulation on Transparency and Participation in Bandung District in 2004 was actually a progressive step in institutionalizing active political involvement of local people. However, it has not been effectively implemented yet. Lack of political will on the part of local to consistently implement the regulation has ensured that it has had only rhetorical value. The claim that popular participation has been channeled through the annual development planning process is specious, since the process is actually still strongly dominated by local government officers.

New arrangements in local governance based on Law No. 32 have in fact significantly reduced the power of DPRDs vis-à-vis heads of regions, since the former no longer have the power to elect and to hold the latter accountable, as regulated in the previous decentralization law. The head of region is now accountable to the central authorities with the president at the apex of the hierarchy. Thus, from a representative democracy point of view, there has been a significant retreat as well.

Thus, the lesson seems to be that decentralization in Indonesia has been pursued mainly as a political strategy to fulfill certain political ends, particularly those of national elites within the context of political and economic crisis. Deepening democracy has never been the driving force behind decentralization reform. It is therefore no surprise that we find a lack of political will to realize the democratic potential of decentralization policies at any stage of Indonesia’s history. Smoke (2003: 12) points out that among the most ubiquitous claims regarding impediments to decentralization’s success is the lack of strong political will from various stakeholders involved in the process. Theorists do not all mean the same thing when they talk about ‘political will’. For some theorists, strong political will can be seen from the existence of constitutional or legal instruments made by political elites, both national and local (Rondinelli, McCullough & Johnson 1989: 77-78; Smoke 2003: 12). Nevertheless, since many cases also show that decentralization policies cannot attain their intended goals,[2] theorists also emphasize that constitutional and legal instruments are not sufficient to ensure workable decentralization policies. As Isaac (2001: 9) firmly argues,

Fundamental reforms cannot be merely legislated. Legislation remains empty phrases unless powerful movements oversee their implementation. Legislation is necessary but not sufficient for decentralization.

Accordingly, as Rondinelli (1983: 198-200) highlights, political will must also be measured from the actual realization of those normative arrangements particularly by central political authorities transferring planning, decision-making and managerial authority to lower levels of governments, and also by local political authorities sharing their authority with local citizens through opening up effective channels for political participation so that local citizens, especially the poor and marginalized ones, are able to express their needs and demands and to press claims or national and local development resources. Thus, this dimension of political will is also essential, since in many cases, normative arrangements of decentralization are often used to facilitate political aims that have little to do with devolving power to lower level of governments and utilizing this power to effectively fulfill local people’s needs and demands. As Crook (2003: 85-86) stresses, in some African countries the real goal is often to consolidate power through political parties and local elites, or to deliberately neutralize local ethnic challenges through fragmenting “potential local power bases into smaller, weaker, politically insignificant units”.

Based on the above line of thought, the lack of political will in pursuing the democratic potential of Indonesia’s decentralization can be viewed from different perspectives. Normatively, even though the embrace of the policy may initially be claimed to be an indispensable strategy to develop a democratic system of government, its subsequent adoption within constitutions and some existing decentralization laws as well as their operational regulations in the regions so far has never been clear, firm, and consistent. Neither constitutions nor basic legislation and its subsequent operational regulations explicitly note that promoting local democracy is among the intended goals of decentralization programs. During the New Order era, Development Planning (Perencanaan Pembangunan), which was regulated within the Ministry of Home Affairs Regulation of 1982 (Permendagri No. 9/1982), was claimed to be adopting a combination of top-down and bottom-up approaches. Empirically, however, as proven in the experiences of Bandung District and City of Cirebon, the planning process was actually highly centralized and practically excluded public participation. The local governments’ development planning processes were nothing but breaking down the centrally planned parameters.

One might find that this was not the case during the post-Suharto era, particularly with regard to Law No.22 of 1999 and Law No. 32 of 2004. Indeed, some argue that Law No. 22 in particular, was intended to promote local democracy and participation, as evident in its preamble: “in the implementation of Regional Autonomy is deemed to be necessary to emphasize more the principles of democracy, public participation, equal distribution and fairness, and considering the potential and regional diversity” (Turner et al. 2003: 23; see also, Jaya & Dick 2001: 216). However, it appears that further details on how local democracy would be implemented on the ground were actually ill-defined.

The national government in fact issued a separate regulation, i.e. Government Regulation No. 68 of 1999 regarding public participation in the governmental process.[3] From the title of the regulation, one might easily assume that it was regarding people’s involvement in the government’s policy-making process. But, it was actually not. The regulation was actually more about people’s rights rather than facilitating popular participation. Four rights were mentioned: the right to obtain and give information regarding governmental process; the right to get fair service from the government; the right to give advice to the government policies; and the right to legal protection (perlindungan hukum).[4] Thus, the Government Regulation did not specifically mention that popular participation would be the essential component of the government policy-making process. In addition, knowing that popular participation was framed in terms of rights, it means that it was set on voluntary basis. I believe that such setting provided weak encouragement for the public to be engaged in governmental process.

In the case of Law No. 32, its prologue reads,

…local government, which manages and oversees its own governmental affairs based on the principles of decentralization and medebewind (co-operating administration) , is directed towards boosting people welfare through service improvement, empowerment, and popular participation, as well as improving regional competitiveness by taking into account the principles of democracy, equal distribution, fairness, specialness (keistimewaan), and specific characteristics (kekhususan) of a region within the system of Unitary State of Republic of Indonesia.

From the above prologue, there would appear to be no significant difference between Law No. 22 and Law No. 32. However, one might argue that central government, as the main architect of the law, showed stronger political will to uphold local democracy in Law No. 32 rather than its predecessor, based on two novel articles within the law, i.e. Article 56 (1) regarding the direct election of head and deputy head of local government and Article 139 (1) which stated that “Local community has the right to provide input verbally or in writing for the preparation of or during the deliberation of a proposed bill.” Direct election of head and deputy head of local government is undeniably desirable since, as Peterson (1997: 14) argues, indirect elections have “tended to perpetuate the strength of political insiders, who are often more accountable to their party hierarchy than to the public at large”. Nevertheless, further analysis of other articles reveals that direct election of head and deputy head of local government actually lacked democratic orientation in three aspects: first, the election process was practically dominated by political parties’ maneuvers, especially during the selection of the candidates for head and deputy head of local government, which is prone to power abuse by ‘selling’ the office to the highest bidder; second, there was strong intervention from national political party boards in determining the candidates; and third, the election gave no opportunity for independent candidates (Legowo & Djadijono n.d). Hence, in the end, local communities have become the last component in the whole series of the election process. In other words, the novel provisions regarding the direct election of head and deputy head of local government only left the local community marginalized.

More importantly, direct election is insufficient for developing strong local democracy since “elections occur infrequently and allow for only limited citizen input or feedback regarding specific local concerns or policy options” (Posner 2004: 57). Strong local democracy, Posner argues, needs to be backed up by active political participation of local constituencies beyond the mere act of voting.

With regard to Article 139 (1), it appears that popular participation was provided for on a voluntarily basis. What I am pointing out here is that the article indicates that popular participation in local policy making process was not an essential factor in the process. This point is underlined by the fact that there were no other provisions within Law No. 32 which obligated local government institutions to engage the local community meaningfully in the process.

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