TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Five years on, village funds program still problematic
The fifth anniversary of the issuance of Law No
Change Size
The fifth anniversary of the issuance of Law No. 6/2014 on village funds, which granted more authority to villages and allowed them to manage their own funds, was marked on Jan. 15.
The village funds program that has become a flagship policy of the President Joko “Jokowi” Widodo administration has provided between Rp 800 million (US$56,200) and Rp 1 billion to each of the 73,670 villages accross the archipelago, getting infrastructure projects off the ground that had been absent during the country’s 73 years of independence.
But the progress made by the villages has not been without problems. There have been reports on the misallocation of funds and corruption because of the poor quality of accountability mechanisms put in place by the government.
Indonesia Corruption Watch (ICW) reported that from the moment the funds were disbursed in 2015, it had recorded 181 corruption cases in villages across the country, with around 30 percent of the cases related to village funds.
ICW researcher Egi Primayoga said the management of village funds was poor. Although there were villages that had managed the funds well, others did not have the capability to manage large amounts of money.
“What worries us is that most of those implicated in graft cases are village heads. We have seen at least 141 village heads involved in these cases,” Egi told The Jakarta Post on Saturday, suggesting that the government improve the capabilities of village administrations to plan and disburse the funds.
Without a better system, Egi was concerned that the village funds would be subject to corruption from village heads and administrations, private companies as well as regional administrations.
Another issue that has emerged is the imbalances in the distribution and misallocation of the funds. A study by the Australian-Indonesian Government Partnership revealed in 2017 that there were imbalances in the distribution of funds because of flaws in how the funds were calculated.
Aceh and West Nusa Tenggara (NTB), which are each home to around 800,000 poor people, had vast differences in the amount of funds allocated. Aceh, which has more than 6,000 villages, received Rp 3.8 trillion while NTB, which has 995 villages, received Rp 667.5 billion.
The executive director of the Indonesian Participatory Mapping Network Foundation, Deny Rahadian, said the absence of clear boundaries for each village was a factor that had hampered accountability mechanisms regarding village funds.
“Only 21 percent of villages in Indonesia have a clear map of their territory,” he said.
Deny said a precise location was needed for a village to implement its development and investment plan, while the absence of village boundaries could lead to the misallocation of resources and conflict.
The secretary of the Villages Empowerment Association, Dewi Hutabarat, said the law on the establishment of village boundaries was supposed to empower villages and clarify their legal obligations.
“One of the consequences of weak legal status is that the funds are disbursed through regency or municipal administrations. This is prone to manipulation. This mechanism provides an opportunity for the upper levels of the administrations to take advantage of the projects,” she said.
The government has increased the budget for the village funds, which stood at Rp 60 trillion in 2018. The fund disbursement rate has reportedly increased from 82 percent in the first year of the program to 99 percent last year.
More than 80 percent of the funds disbursed every year were used to build infrastructure, such as roads, health facilities, market places and early childhood education centers.
An undersecretary at the Office of the Presidential Chief of Staff, Yanuar Nugroho, admitted that corruption was a major threat given the rapid development of villages.
He said the central government was preparing a better system to disburse and monitor village funds, including directly transferring funds to the villages.
“The spirit of the law on village funds is to give autonomy to villagers in developing their villages. So the funds must be allocated according to the needs of each village and how it is spent must be decided at village meetings,” he said.
