Local and Regional Governance: Experience of Capacity Building Program in Indonesia

1
Local and Regional Governance Experience of
Capacity Building Program in Indonesia
Presentation Document
Yayasan Inovasi Pemerintahan Daerah / Center for
Local Government Innovation
Washington-DC, June 19, 2006
2
Indonesia Entering Democratic Era
3
The Big Bang in Autonomy and Decentralization

• After having had a highly centralized government
  system for more than 30 years, Indonesia
  through Law No. 22 Year 1999 on Regional
  Government chose a rather radical (BIG BANG)
  approach to decentralization.
• BIG BANG No gradual transfer of
  responsibilities to sub-national levels of
  government, but acknowledgement of general
  competence on Regency (Kabupation) or
  Municipality (Kota) level only functions of
  Central Government and Provinces are listed
  (Government Regulation (PP) No. 25 Year 2000),
  residual functions are with Regency/Municipality.
• Sub-national (Regency/Municipality) has full
  autonomy which include planning, budgeting,
  implementing, evaluating all of development at
  their levels.

4
Chances and Risks of Decentralization

• Chances for more democracy and accountability,
  better services, more equitable development.
• Risks of dominant local elites, decentralized
  corruption, service failures, regionalism

5
Institutional and Personnel Capacities Problems

• Based on stipulation of Law 22/1999, all central
  government organizations in the regions (Kanwil,
  Kandep) and their personnel (altogether more than
  2 million) were transferred to the authority of
  the regions in 2001.
• Law 22/1999 gave regions substantial authority
  for the management of their civil service, partly
  in contradiction to the civil service law (Law
  No. 43 Year 1999), which retained much control at
  the central level.
• Consequences In aggregate, regions avail of the
  necessary institutional set-up and sufficient
  number of personnel to cope with their new
  duties, however
• - some regions are overstaffed and others lack
  personnel
• - qualification of staff is often not in line
  with requirements

6
However, decentralization and autonomy in
Indonesia gave some prospect

• Decentralization and strong local governments
  have become irreversible assets of Indonesias
  government system
• Decentralization has broad support in Indonesias
  society
• Decentralization has good prospects to achieve
  its goals if requirements to reduce risks are
  more forcefully fulfilled, and if
• - a comprehensive civil service reform is
  undertaken
• - more effective reforms of the judiciary are
  carried out to provide for more legal certainty
  and fight corruption
• - consistent efforts are undertaken to
  strengthen civil society and give it an
  appropriate role in the governance system

7
In regard to oil, gas, and mining,
decentralization and autonomy in Indonesia gave
more chances..

• Based on government regulation (PP) No. 75 Year
  2001, there are clearly sifted of authority from
  central government to sub-national level,
  especially in regard to certification of
  authority to start oil, gas, and mining
  businesses.
• There are three different certification of
  authority, such as
• - certification letter to make study or
  research
• - certification letter given to the community to
  do small scale community mining
• - certification letter given to qualified and
  professional oil, gas, and mining company

8
Experiences in LG Capacity Building
9
To conduct needs assessment, YIPD/CLGI
categorized issues into three dimensions
Dimension
Examples
Competency Related Issues

• General management skills, e.g. leadership,
  decision-making
• Financial management skills, e.g performance
  budgeting, financial reporting
• Technical skills, e.g. laboratory technology,
  legal drafting

Non-Competency Related Issues

• Policies and procedures, e.g. career development
  plan, incentives/sanctions mechanism
• Institutional infrastructure/equipment, e.g.
  medical equipment, computer system

Awareness Commitment

• Awareness of capacity building issues
• Commitment/initial indicators of work on the
  capacity building issues

10
YIPD/CLGI believes that Local Government
officials lack some key competencies required to
achieve desired performance
Required Key Competencies
Sources of Performance Gap

• Specialized technical competence, e.g.
  biotechnology, mining lab. technology, timber
  inspection, medical analysis, hospital management
• General management skills, e.g. leadership,
  decision-making, HR management, change management
• Financial management skills, e.g. property asset
  management, performance budgeting, financial
  reporting

• Competency related
• Technical skills gap, e.g. timber inspection
• Non-technical skills gap e.g.. decision making,
  leadership, communication, financial reporting
• Non-Competency related
• Unclear job expectation (performance goals) and
  performance indicators
• Insufficient performance feedback mechanism
• No incentive and sanction system to stimulate
  good job behavior
• Lengthy bureaucracy which reduces decision-making
  ability and courage
• One-way (top down) management approach weakens
  initiative and creativity needed to perform well
  in low-resources condition
• Inadequate facilities, equipment and supplies
• Non-motivating organizational system, e.g.
  unclear selection promotion mechanism

Competencies Gap
Existing Competencies

• Basic technical skills for all levels at each of
  the 6 Dinas observed, except for Mining Energy
  Unit, which lacks basic mining energy knowledge
• Basic management knowledge and skills for middle
  and senior level officials

11
while non-competency related issues are also
present
Organizational Software
Organizational Hardware

• Inadequate administrative and technical policies
  procedures
• Career path/system is not clearly communicated
• Lack of meaningful incentive system
• Absence of monitoring evaluation mechanism
• Insufficient sense of ownership and low
  motivation for achievement
• Weak organizational structure

• Lack of technical facilities, e.g. laboratory
  for tobacco, rice, cattle reproduction, and
  mining
• Very limited availability of information and
  communication technology system

12
Tripartite partnership will leverage on each
partys resources to create a mutually beneficial
result
Roles Of Each Party In The Partnership
Local Government Role

• Write proposals for both training non-training
  assistance
• Select staff for training assistance
• Fund local expenses for training

Local Government
Private Sector
YIPD/CLGI
YIPD/CLGIs Role
Private Sector Role

• Involve in-house expertise in the technical
  assistance
• Cover YIPD/CLGI expenses incurred from Local
  Government-related activities
• Fund specific activities that would be of direct
  benefit to the Company

• Provide guidance to Local Government in
  developing proposals for assistance
• Support private sector to ensure accountability
  of the assistance program delivery