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Capacity Building As The Core Of Local Government Performance


Training and Education Agency (Badan Diklat)

Ministry of Home Affairs

Jl. Kalibata Jakarta




The implementation of decentralization in Indonesia is still becoming an interesting study until now, irrespective of controversies in the initial stage of decentralization law enacted but GOI is successful in making an important step to give wider authority to local government in the beginning of year 2000.  However, there are still various weaknesses concerning the aspect on management of the local governance and the impact to society. One of the aspects where it was able to set an indication of efficacy in the level of attainment of local autonomy is on its the Human Development Index (HDI), Sumedang District rank only eighth among 23 Districts/cities in West Java Province (Bappeda Kab Sumedang, 2005). Meanwhile, the dependency of Sumedang District to the central government remains high. It can be seen from the local budget which is dominated by central government’s assistance constituting almost 90% with only around 10% come from Local Revenue. Based on research conducted on July- September in 2006, from nascent as the lower capacity performance to expand level as the higher level, there are 11 out of 16 indicators still lay on emerging level.


Keywords:  Capacity building, Decentralization, Local Government performance


1.                  INTRODUCTION

Theoretically, decentralization is an attempt to bring government closer to local people and encourage the emergence of more democratic local government.  Decentralization should be able to improve local people participation and even more responsive to people need However without followed by local democracy, the implementation of decentralization and regional autonomy only transferring centralization and corruption from central to local level. In the last three decades where democracy is becoming global standard, decentralization believed as one of important vehicle to achieve it. Not only for some countries which struggle with basic standard need: education, health, poverty or even corruptions also for countries which succeed maximized local resources overcome those. Therefore together with democracy wave, decentralization will be unavoidable. Decentralization runs as wave swiping without any limitation started from developed country to developing country, rich country to poor country and democratic country to authoritarian country. World Bank noted almost 95% of Democratic Nations implemented decentralization on local government: “People around the world are demanding greater self-determination and influence in the decision of their government. Some 95 percent of democratic countries are evolving politic, fiscal, and administrative powers to sub-national governments…” (World Bank Report, 1999/2000).

The persistent demand of decentralization implementation based on several countries experiences in the world, especially the third world countries, which centralization had constraint local government role in giving a good quality of public service. On one side, the central government is not able to overwhelm the entire wide and complex governance matters. Furthermore, this will be very complicated to a nation which has wide area, numerous population, as well as ethnic, culture and language complexities. This is parallel between Bowman and Hampton (1984) saying that “…no central government of a large state can effectively decide what is to be done in all spheres of public, nor can it implements its politics and program efficiently in all areas". From the fact above, it is likely that countries make decentralization as the best answer for various problems in a nation, both related to economic development, democratization climate development, good government realization, delivered service enhancement and as an effort to maintain the unity of a nation. The more complex problem facing by a nation, the more demand of high flexibility and responsibility governance to catch occurred alterations globally or local. However, if we discuss decentralization, it will unable to release from the analysis of intergovernmental relation. Therefore the interrelatedness among centralization-decentralization is two different side of a penny which un-separated in analyzing decentralization. 

However, if we discuss decentralization, it will unable to release from the analysis of intergovernmental relation. Therefore the interrelatedness among centralization-decentralization is two different side of a penny which un-separated in analyzing decentralization. 

Despitefully, massive growth of science and knowledge in the early 21st century influencing all kind of life aspects such as social, politic, and economic that demanding government’s ability to adapt rapidly. Shah (1997) said that Nations with such alteration is categorized as transition Nation like in eastern and central Europe, former Soviet Union as well Latin America, Africa and Asians’ countries. Auxiliary Shah described the tendency of government structure alteration in 20th heading to 21st century as following:

Table 1

Governance Structure; 20th Century and 21st Century


20th Century

21st Century

l  Unitary

l  Centralized

l  Center manages

l  Bureaucratic

l  Command and Control

l  Internally dependent

l  Close and Slow

l  Intolerance of risk

l  Federal/nonfederal

l  Globalized/localized

l  Center leads

l  Participatory

l  Responsive ad accountable

l  Competitive

l  Open and Quick

l  Freedom to fail/succeed

                       Source: Shah (1997)

In East Asia itself, decentralization becomes a fundamental transformation in the government structure since 1990’s. Before 1990, almost all countries in East Asia are implementing centralization system (White and Smoke: 2005). Despite  that decentralization in East Asian countries relatively slow than others in the world, both in America, Europe, Latin America and a few of African’s countries. However it is also be said that decentralization leaps were occurred in several countries in East Asia such as Philippines and Indonesia. As well as the decentralization process is gradually occurred in Cambodia, Vietnam and Thailand where those countries were have already enhancing the service delivery and public participation at the local level.

Nevertheless, it doesn’t mean that decentralization implementation in East Asian countries run smoothly. There are fundamental problems facing by these countries in implementing it, both related on authority distribution between central and local government, governmental organization structure, financial sharing system, accountability and management on natural and human resource as well as its capacity management aspect.

In Indonesian context, capacity building turns out to be an essential issue since decentralization was raised in 2001. At one side, it is considered that capacity building is an absolute requirement of decentralization policy in Indonesia. But on the other hand, it felt that capacity at the local level is weak at the same time creates an anxiety of failure in the implementation of the system in the country. Therefore, when decentralization was implemented, the local capacity is in a weak condition. That is the reason why decentralization in Indonesia moving very slowly. 

The importance of decentralization has been advocated in Indonesia has a long story; local autonomy schemes were regularly introduced. The new chapter of local autonomy in Indonesia began in the reformation era in 2000 marked by Law umber 22 on 1999 concerning Local Government. This Law was believed to able to bring fundamental alteration and wide spread in executing local government in Indonesia. The hope is reflected from the existence of drastic alteration both concerning management-relations among the central government, a province and district/city, an authority distribution among government tiers, a financial sources management, the human and natural resources management, a local legislative role, an evaluation and monitoring mechanism, a management concerning village government, etc.

However inappropriate prepared, not well organized, unprepared local capacity and also half baked on implementation of decentralization caused it execution was marked by various misuses. As a consequence, the gap between the objectives and the results remained wide.  Miss understood on definition of local autonomy among LGUs has raised concern about increasing conflicts that might be lead to the nation’s disintegration. 

From the observation of the implementation of decentralization from 2000 to 2005 it can be listed general symptoms of negative impact;   Intergovernmental relation between central-local still vague, there is still a central interference concerning on local natural resources[1]. Other hindered to implement decentralization fully is imbalance human resources allocation between the central and the local where the potential human sources are more to the central. Though almost two million central officers had been dispatched to local government but for most LGUs especially for isolated area the local officers often hinder the successful to implement decentralization.

In financial aspect, the local resources are handled by the central government and there is imbalance in monetary dividing between those for the central and the local yet among the local government units (LGUs). For instance, the revenue sector is beyond proportional where central government gets 82% from total input and local government only gets 18%. On expenditure sector, the counter balance is no more proportional where for the central output allocation reaches 83% from output total while local only spends 17% from the available input (Nyoman, 2005).

On the other hand, the district/city government dependency on central government in Local Budget (Anggaran Pendapatan dan Belanja Daerah/APBD) structure is still high. This is reflected from allocation of APBD sources (more than 85% from APBD structure) obtaining from central government assistance both on form of the General Block Grant (Dana Alokasi Umum/DAU), the Specific Block Grant (Dana Alokasi Khusus/DAK), the Sectoral Block Grant (Dana Alokasi Sektoral/DAS) and another assistance in the form of deconcentration, also fund of the assistance task Dana Tugas Pembantuan (Smeru report, 2003).

As well as re-arrangement on local government  structure, local elite feels to having the right in determining the structure form and size of the development aiming without taking consideration on monetary ability, local  potential, and human resources. As a result local budget allocation is more permeated for the expense of public than increasing the service quality to people.

Another primary problem from narrow comprehension of local autonomy is the tendency of local elite to develop the region through provincial or district extension reasoned to enhance service quality towards the people. In fact, the region extension is solemnly based on elite’s political interest to get new position at a new region then it produces burden to the local government also the central government, for example the budget to build a new infrastructure, an executive functionary subsidy and a salary also a legislative needy, plus an operating expenses etc.

The number LGUs in Indonesia since 2000 was increase significantly; the number of regency (kabupaten) and town (kota) increase 99 and seven new provinces were established.  In 2001 the amount of districts and cities in Indonesia reached 341, while the amount of province 26 and in 2002 it became 370 districts and cities. Such condition clearly influencing on government budget, hence obviously lessen the quality of public service. The phenomenon strengthened by the fact that most of the local governments in Indonesia allocated 77 % of its budget (APBD) for the government expenditure and only 23% are used for the expense of public service and development (Sadu, 2001). Moreover, the fact also shows that local autonomy which aimed to make government more honest and efficient by provide better public goods and services for local citizens still far away. Increasing new LGUs post local autonomy which embarked in Indonesia since 2000  unfortunately not followed by increasing life quality index at local level. In fact acceleration on LGUs number in line with increasing a pace of poverty and also a number of under-developed district indeed. In 2006, almost two hundred LGUs or 22.6% classified as under-developed districts, among others around 62% or 123 districts are reside in Indonesia East Region, 58 districts in Sumatra and 18 districts in Java and Bali (Harian Kompas 25/8/2006).

Another hinder problem on local autonomy implementation laid on narrow perspective on local autonomy among LGU’s; in terms of natural resources management which if not taken into account and anticipated properly will be contra-productive for national development. Pursuing the short-term interest in order increasing local revenue, Ignoring the environmental impact, excessive, and lacking of well-planning on natural resource management became a serious problem on local autonomy implementation[2]. Though environmental crisis in Indonesia began during the New Order era and escalated during the reform era. But decentralization contributes significantly in affecting the environmental crisis as well as nation debt and globalization[3]. The narrow comprehension on local autonomy is also causing local elites tends to drive uneconomically and inefficient in managing a local resources.

The full implementation of Law 22 of 1999 in 2001 resulted in a huge influx of local regulations drafted in Indonesia.  This law mandates that the central government review local regulations and the review burden are high.  Nationally, there are 415 local governments, resulting in the issuance of 6,000 local regulations.  In 2002, a decentralization cite this drafted 653 local regulations, 51 on trade and commercial sector formulated by 14 local governments, 27 on public works formulated by 12 local governments, 14 on health formulated by 10 local governments, and 14 on education formulated by 9 local governments. These Local government decrees emerged as an addition burden for Ministry of Home Affairs. In terms of local decrees, local governments must submit local regulations to the Ministry of Home Affairs, not to the relevant ministry. Therefore Ministry of Home Affairs will send these local decrees to the relevant ministry however it considerations are very slow in responding to and reviewing local regulations that they receive from the Ministry of Home Affairs.

Moreover decentralization is highly complex and multi-dimensional phenomenon.  Since it holds great promises and challenge in the same time hence decentralization process and result can be carried out in various ways. Moreover for Indonesia as archipelago countries featured by various geographical landscapes, around three hundred ethnic and using different mother languages, variety of religion, those affected on it implementation. Hence the process and the progress of it implementation will differ from one LGU to another. Though in global observed is deniable that it progress tend to be similar there is no fundamental transformation in terms of the public provisions[4].  Due to Decentralization Survey on 144 districts/cities in Indonesia (Decentralizing Indonesia report, 2004) almost 50% of respondent presumed that public services on education and health is remain similar with pre local autonomy, while 39% believed that public services improved slightly post local autonomy, on the other hand 6% of respondent assumed that its worsen after local autonomy enacted. Despite decentralization is not an end but a process leading to provide better public services but this survey explained clearly that remarkable effort needed to make significant progress on post it implementation. Looking deeply on it survey seemed that with or without decentralization, local citizens remain left behind. Therefore observation particular region on implementation of local autonomy will be benefits to evaluate progress on it.

The importance of decentralization in promoting good governance is also stated by White and Smoke (2005) that decentralization is already affecting prospect for economic development, possibilities for "good governance" in country institution, and in the quality of service delivery, especially for the poor.” To realize the balance decentralization also understood as a perfect way to create harmonic relationship between stakeholders’ components on governance process. As figure by Kimura (2006):



Actual Model



    : Cooperation

    : Milking cow

    : Disbelief

    : Mutual Disbelief


Figure 1

Interrelationship among Stakeholder

[1] Several conflict emerged between the province and central government in Riau Province, involved the management of oil and gas resources that is controlled by central government.  In this case, the region demanded that the oil and gas resources should be managing by local government.  The other problem is the mining of sand that is allowed by central government but rejected by the region because it’s destroys the environment. Later it became worse when sand mining management controlled under local government. Financial sharing between national-local government on natural resources up to now still being debate upon.


[2] Tremendous environmental problem in Bangka Belitung when ex-tin mining which exploded during reformation era and left deep wells that contributes on malaria diseases in this area, The flash flood in Bahorok, Kabupaten Langkat, North Sumatra claimed 132 lives and destroyed 450 houses, 35 hotels, 2 mosques and 8 bridges (The Jakarta Post, November 9, 2003). This disaster followed other disasters such as the landslide in Garut at the beginning of 2003, which claimed 21 lives. At least 26 people died and 17 were missing after the landslide in Pacet, East Java at the end of 2002 (The Jakarta Post, March 6, 2003). Residents of Garut and Pacet are reportedly suing Perum Perhutani and the government for failing to stop legal and illegal logging in the surrounding protected forests. These natural disaster is also believed to have been caused by deforestation and illegal logging


[3] World Bank 2001; Smeru report, 2003; IBSAP, 2003.

[4] Jembrana is one of District in Bali Province which succeed provide basic public services; education and health  freely, on the other hand education and health cost remain high in most LGU post local autonomy

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Jun 27, 2011, 2:12 AM