Fiscal Decentralization: Fail or Success?

Since 2011, Indonesia embarked fiscal decentralization with enacted and promulgated Law 22/1999 and Law 25/1999. Law 22/1999 emphasizes on Local Government Management, while Law 25/1999 emphasizes on fiscal balance between center government and local government. 

After more one decade of fiscal decentralization implemented, surely we hope that targets can be reached. One decade is not short time to undertake change. But, reviewing output of fiscal decentralization perhaps makes us disappointed. As experts said, there is no equalization within region after a decade of fiscal decentralization. It means that fiscal decentralization can’t achieve its target in order to create equalization within region in Indonesia. One of trait which proves that judgment is unavailability of equal distribution of welfare and population within region. As we know, most contribution of GDP is rendered of Java. Java contributes above 50 percent of GDP, while others are remaining. Also, distribution of population is still ugly. People inclined live in Java or big cities. They presume that Java or big cities offer more and more money rather than small cities or villages. I don’t judge that it’s wrong choice because everyone eager enhances quality of live. So, they are craving to live in good place.

Decentralization aimed to create equalization within region still can’t be achieved. Actually, government has transfer fund more equal to districts. Center government provides more money for poor districts rather than rich districts. Poor districts are characterized by less natural resources, bad infrastructures, and low human quality. They acquire more money from center government than those rich districts. Hopefully, poor districts can use that money to enhance economy. They can allocate to finance infrastructure building and provide health care and education to poor people. Surely, if every poor district uses its fund optimally, it can enhance its economy and create more quality in human.  

But, if we look phenomenon now, poor districts are still poor. We witness that many poor districts can’t allocate their fund optimally. Perhaps they don’t have capability to manage their budget. So that, more money doesn’t assure more enhancing economy. More money has to be followed by capacity in budget management. Surely, one important thing is political will of local government to prioritize development in its region. If high public official doesn’t regard need of society, automatically there is no refinement in economic development.

We realize that fiscal decentralization doesn’t succeed until now. But, we have to strive to create more equitable distribution of welfare within region. Hopefully, it can be followed by more distribution of people. I think fiscal decentralization which is pro-poor districts is one of strategy to achieve equalization or well distributed of welfare. But, we have to equip with controlling of fund allocating. Controlling local government in allocating fund, perhaps it will create pro-poor budget or pro-infrastructure budget. Controlling may be conducted by NGO, society, and center government. []

NB: I apologize if there are grammatical errors. I am studying English now.