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Jakarta Post

Editorial: Stop the rent seekers

Even though most new regional governments have been mired in numerous problems, ranging from fiscal difficulties, bad governance and an acute lack of competent bureaucrats, the House of Representatives continues to be swamped by proposals for creating new provinces, regencies and mayoralties

The Jakarta Post
Tue, March 22, 2011

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Editorial: Stop the rent seekers

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ven though most new regional governments have been mired in numerous problems, ranging from fiscal difficulties, bad governance and an acute lack of competent bureaucrats, the House of Representatives continues to be swamped by proposals for creating new provinces, regencies and mayoralties.

The House confirmed last week it had assessed 33 out of 98 proposals it had received for creating new administrative regions and would soon decide which would be qualified for consideration in draft legislation for further deliberations with the government. The creation of a new province, regency or mayoralty must be based on the law.

We find it mind-boggling to understand why the House is still wasting its time and resources responding to demands from regional politicians and other vested-interest groups for the creation of new administrative regions even though the number of provinces, regencies and mayoralties has more than doubled after the enforcement of the regional autonomy law in 2001.

We think that until a thorough political and economic evaluation of the hundreds of new regions set up after 2001 is completed, allowing new regions to proliferate further would only increase rent seekers, hurt economic development and exacerbate divisive politics across the country.

Most surveys and regional autonomy watchdogs have concluded that the creation of new administrative regions did not contribute anything to improving public services – which is one of the two basic objectives of regional autonomy. The Finance Ministry also has found that more than 80 percent of 145 new regions it assessed had failed miserably in attempts to improve the people’s welfare.

Instead of making bureaucrats more responsive and accountable to the public, regional autonomy has caused the proliferation of new fees, rent-seeking bylaws and corrupt practices.

Just look at the thousands of regional bylaws that had been annulled by the Finance Ministry and Home Ministry because of their damaging implications for economic activities, notably businesses. Yet more shocking was the recent statement by Home Minister Gamawan Fauzi that more than 155 regional heads, including 17 governors, had been named corruption suspects.

The latest reports from the Supreme Audit Agency also showed that less than 5 percent of the estimated 525 provincial, regency and city administrations received a clean bill of health from state auditors.

True, several of the new regions did make remarkable improvements in public services and have reinvigorated local economies through business-friendly bylaws. But their number is still very small compared to the more than 200 new regions that have been created after 2001.

The other regions are still in a learning process. While this is going on, we think it is most imperative that the House supports the moratorium already imposed by the government on the creation of new regions.

The moratorium should be upheld at least until the proposed amendments to the laws on regional administrations, on the direct elections of regional chiefs and the overall assessments of regional autonomy are completed.

The proposed amendments to the law regarding the direct election of regional chiefs are especially urgent and imperative because, as the Home Ministry has found, the main cause of corruption involving regional chiefs is the huge campaign spending candidates must extend compared to the small official salaries received by regional chiefs.

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