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The Evaluation of Fiscal Decentralization Implementation

by | Jun 20, 2022 | Training

 (English version only)
DEFINIT in collaboration with GIZ and ADKASI has organized a dialogue inviting local governments and local parliaments in Indonesia. The dialogue was carried out in the form of National Seminar and Workshop on The Evaluation of Fiscal Decentralization Implementation within the Framework of Roles-Authority Sharing between Central and Local Governments in Mercure Rekso Hotel, Jakarta. Local decision makers participated in the dialogue, such as Bupati/Walikota, Wakil Bupati, local secretary (Sekda), head of local parliament, board secretary of local parliament (Sekwan), local government expert staffs, and representatives from institutions that have concerns about local finance.
This National Seminar and Workshop was organized as a continuation of the previous dialogue between local governments and local parliaments which was carried out in Yogyakarta. There were three resource persons that were invited as the representatives from the central government and the representative of the Indonesian parliament (Dewan Perwakilan Rakyat-DPR RI), i.e. 1) Dr. I Made Suwandi, MSocSc (Director General for General Governance, Ministry of Home Affairs Republic of Indonesia); 2) Ganjar Pranowo, SH (Vice Chairman of Commission II of DPR RI); and 3) Drs. Yusrizal Ilyas, MPA (Director of Funding Evaluation and Local Financial Information), Directorate General of Fiscal Balance (DJPK), Ministry of Finance Republic of Indonesia).The National Seminar and Workshop discussed three main agenda as follows:

1.The Evaluation and Prospect of Decentralization

Participants and resource persons discussed the strategy of local autonomy implementation according to the revision of Law No. 32/2004 on Local Governments , the evaluation on fiscal balance between central and local government, and the political process of the revision of UU No.32/2004 and UU No.33/2004 on Fiscal Balance between Central and Local Government.

2.Best Practices on the Implementation of Fiscal Decentralization at the Local Government Level

In order to enrich the experiences of local governments in fiscal decentralization implementation, several resource persons from local government, local parliament, practitioner, as well as academician were invited. Participants could draw several best practices from the experiences of fiscal decentralization implementation in Kabupaten Sidenreng Rappang, in Kabupaten Serdang Bedagai, and in local governments in Germany. Those experiences have provided insights for the participants in order to improve the fiscal decentralization implementation at the local level as well as at the national level in Indonesia.

3.Dialogue on Strategic Issues

This dialogue encouraged all of the participants to actively involve and communicate their opinions and suggestions regarding the strategies to respond to the revision of Law No.33/2004 and propose recommendations for the revision of Law No.33/2004. Participants were encouraged to provide arguments as the basis for ideas and recommendations that they proposed. In addition, the participants were facilitated to map important agendas which were categorized into strategic, tactic, and technical policies to be implemented.

This National Seminar and Workshop was designed as a formal discussion forum. However, at the same time, the participants were invited to join activities to facilitate them in improving networking among participants. The participants enthusiastically followed a role play that was designed to stimulate the participants in proposing critical arguments.

The National Seminar and Workshop formulated 12 (twelve) main recommendations for the revision of Law No.33/2004, i.e. (1) Principles of the financial relation between central and local governments; (2) Natural Resources Revenue Sharing Fund (Dana Bagi Hasil-DBH) ; (3) Tax Revenue Sharing Fund ; (4) General Allocation Fund (Dana Alokasi Umum-DAU); (5) Specific Allocation Fund (Dana Alokasi Khusus-DAK); (6) Special Autonomy Fund (Dana Otonomi Khusus-Otsus); (7) Local Borrowing; (8) Local Bonds; (9) Financial Management in the Context of Decentralization; (10) Financial Management Monitoring; (11) Assessment of Local Financial Performance; and (12) Monitoring and Auditing.

During the National Seminar and Workshop, several participants have been interviewed regarding their opinion on this activity. In general, they mentioned that this forum is very useful and needs to be followed-up.

“This forum is very useful as the central government could obtain recommendations from the local level regarding the revision of Law No. 33/2004.”

A participant from Kabupaten Lamandao

“From this dialogue, we could get update on the recent discussion regarding the revision of Law No. 32/2004 and No. 33/2004. Therefore, we could be more prepared in responding and deciding the follow-up actions after both of the laws are officially stipulated and implemented.”

A participant from Kabupaten Boyolali

“In order to support the process of decentralization for community welfare, a forum needs to be organized to bring together the executive and legislative in order to discuss the monitoring aspects of financial management issue.”

A participant from Kabupaten Indramayu