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Acting regional heads: Small mandate, big responsibilities
It is said that change begins at home, and the central government must address its own structural and cultural problems so the incoming interim regional heads can get local programs rolling.
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Familiar faces: West Java Governor Ridwan Kamil (left), Jakarta Governor Anies Baswedan (center) and Central Java Governor Ganjar Pranowo pose for a photo session on Feb. 19, 2020. The three governors will end their terms this year or next year and be replaced by acting governors. (Instagram of /Ridwan Kamil)
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he government will be appointing acting regional heads to replace the 271 governors, regents and mayors whose terms end this year and next. Challenges await these interim leaders, who will face a different structural landscape.
Besides uncertainty over when the COVID-19 pandemic will end, the paradigm shift in a number of national policies offers a new and demanding context for these acting leaders. Therefore, the selection of accountable officials and support for the policy governance design and central-regional institutional relations will be crucial.
During the pandemic, the government enforced two strategic policies: the Job Creation Law and the Central-Regional Fiscal Relations Law (HKPD).
The jobs law amended a number of provisions in more than 70 laws to clear barriers to investment and hence, job creation. One of the most striking changes the law brought was the paradigm shift of business licensing from a permit-based to a risk-based approach.
These changes didn’t land smoothly. The national policies are not yet solid, egocentrism typifies ministries and agencies, and digital government services are as yet unintegrated under the Online Single Submission Risk-Based Approach (OSS RBA). In the regions, apart from capacity constraints, confusion over the content of the law has prevented local administrations from formulating good policies.
Meanwhile, the HKPD Law seeks to increase regional administrations’ fiscal capacity and spending quality. On the income side, besides simplifying local taxes and levies, the policy has introduced an open scheme. On the expenditure side, the law has been deemed progressive for setting a 30 percent budget cap on personnel expenditures and a 40 percent spending floor on infrastructure. This provision is expected to address the classic problem of burdensome bureaucracy spending.
The 2021Regional Autonomy Watch (KPPOD) review, however, shows that the changes made in the HKPD Law are not yet fundamental because they only simplify tax rates. The central government does not yet dare transfer the authority to collect income tax (PPh) and land and building ownership tax (PBB) to regional administrations. In addition, as regards personnel and infrastructure spending, the thresholds will work only if bureaucratic reform materializes.
