Decentralization In Indonesia In Several Different Periods

Overall, laws regarding decentralization in Indonesia has evolved several times. The first law that regulates local government is Law No. 1/1945. It was followed by several amendments until Law No. 5 1975 which was implemented until the early reform era. In the early reform era, there is Law No. 22 1999, and in the reform era, there are 2 Laws, Law No. 32 2004 and Law No. 23 2014. There are general differences between these laws describing as follows.

Before the reform era, although Indonesia had employed decentralization in government structure, the implementation was far from that. The central government still held the power and dictated the local government and local government had to do what was ordered by the central government. It can be said that the governmental structure is more like de-concentration. The central government gives the order, and the governors, majors, and regents follow the order. Law No. 5 1975 did not specifically mention about affairs assignment; however, it is said that additional assignments will be regulated with Government Regulation (Peraturan Pemerintah). At this time, in government structure, provinces were known as “Daerah Tingkat I” and regencies and cities as “Daerah Tingkat II”.

On the contrary, at the early reform era, driven by the situation at that time: monetary crisis, massive demonstrations to bring down the authoritarian regime, the low of public trust, the central government reform the decentralization law with Law No. 22 1999 which give the local government so much power, and even can be considered as too decentralized. This is reflected in the governmental structure which removed the hierarchical relationship between province and regencies and cities. In addition to their status as an autonomous region, provinces also act as administrative regions which is the representative of the central government in the region. As for the affair/functional assignments, Law No. 22 1999 did not clearly mention it. Another key change in this era is the regulation for proposing proliferated, merged, and also terminated.

In the reform era, four new special autonomous regions were added in Law No 32 2004 and followed by the fund in Law No.23 2004. On Law No. 32 2004, the relationship between provinces and regencies/cities was still not clear whether the regencies/cities are subordinates of the provinces or stand on the same level and independent. However, in Law No. 23 1014 the relationship became clear that the relationship is hierarchical. On Law No. 32 2004, the regulation for the functional assignment was clearer than before. The law mentioned different kinds of affairs (mandatory and preference) for local governments. Mandatory affairs must be conducted by the local government, while the preference can be chosen to be conducted or not. While in Law No. 23 2014, the affairs are divided into absolute, concurrent, and general assignment. The absolute affairs became the responsibility of the central government, the concurrent affairs will be distributed to local government, and the general affairs will be handled by the president as the head of government. Another key change from the previous regulation is the introduction of direct election for the local government leader (governors, majors, and regents).

To sum up, the laws regarding decentralization has evolved several times following the political and governmental dynamics. The tug of power between the central government and local governments have characterized the changes in decentralized regulations.