Insights and Analysis

Indonesia’s Village Law: A Step Toward Inclusive Governance

February 17, 2016

By Novi Anggriani

In late December, Indonesian President Joko “Jokowi” Widodo spoke to over 700 village heads in Boyolali, Central Java, about the implementation of the year-old Village Law – a major campaign platform for both he and his rival during the 2014 presidential election. The law is one of the most significant pieces of legislation since Indonesia started decentralization of power from the center to the regions in 2001. For the first time, the law guarantees that the central government allocate a specific amount of funds to Indonesia’s 74,093 villages so that they can finance their own development based on their individual needs and priorities. While the law is lauded for providing high-level autonomy and authority to the villages, it is not without challenges, including how to ensure that marginalized groups are participants in the decision-making process.

Indonesian woman collects water

For the first time, Indonesia’s Village Law guarantees that the central government allocate a specific amount of funds to Indonesia’s 74,093 villages so that they can finance their own development based on individual needs and priorities. Above, a resident of Lombok collects drinking water. Photo/Flickr user DFAT

Under the law, which will affect some 50 percent of Indonesians living in rural areas, villages will share funds equal to 10 percent of the state budget earmarked for regional administration, transferred on a yearly basis. However, due to concerns about state financial capacity, the amount will be incrementally increased, starting with 3 percent in the first year, and reaching 10 percent in 2017. The amount of funds allocated is based on a formula which takes into consideration the population size, poverty rate, village size, and its degree of geographic isolation. While a village fund allocation policy that draws from local government budgets has been in place since 2005, many local governments rarely implemented it due to weak law enforcement and low fiscal capacity. In the new law, the mechanism has been modified in that the central government determines the amount and transfers it to the local government. After the village submits its planning and budgeting documents to the local government, the amount is then transferred to the villagers for them to determine and finance their own development priorities.

The law clearly states that meetings on village planning and budgeting must involve community representatives including religious leaders, farmers, fishermen, women groups, and marginalized people. While community participation has been a component of Indonesia’s development planning since the 1980s, it has been limited in practice. In most village development meetings, it’s often only the village elites who come – women and the poor rarely attended the meeting, and if they did, their voices were rarely heard. While villagers could submit a list of concerns in the meetings, village budgets were limited and their priorities fell to the bottom of the list.

In addition, under Indonesia’s centralized government structure during the Soeharto era, local government officials were accustomed to making decisions about their village’s priorities based on what the central government deemed a priority. They lacked experience in a decentralized governance approach, and are still learning how to involve the community in a way that is inclusive and efficient.

Decentralized decision-making processes to the village level that are backed by significant allocation of funds have the potential to create opportunities for marginalized communities to engage and benefit from programs funded by the village funds. In his address to the village heads in Boyolali, Jokowi emphasized the important partnership of government and civil society in working together to ensure that the village funds actually reach all people in village that they are designed to serve.

Under Program Peduli, a social inclusion initiative run in collaboration by the government and civil society organizations under the Coordinating Ministry of Human Development and Culture, a group of budget advocacy NGOs was established to work with local civil society organizations in the program to focus specifically on strengthening inclusive governance with marginalized groups. These groups include victims of human rights abuses, people with disabilities, people dependent on natural resources, religious minorities, and vulnerable youth and children. Members of the budget advocacy NGO group include: Perkumpulan Inisiatif, FORMASI, IDEA, P3M, Seknas FITRA, and YASMIB.

Over the past year, The Asia Foundation has supported these local CSOs to ensure that village planning and budgets respond to the needs of marginalized groups. CSO representatives have been trained on tools to include the needs of marginalized groups in the planning and budgeting process from the village to the district level, and how to identify and articulate the needs of villagers in local governance. In the project’s first year, the CSOs have reported greater involvement of previously excluded community members in the village development planning process, including increased inclusion of proposals made by marginalized groups in village annual work plans and village budgets.

The Semak Foundation, which works in the Garut district of West Java on issues surrounding sexually exploited and vulnerable youth and children, designed a proposal for the village of Limbangan Timur that specifically emphasized how the local community could play an important role in assisting these children. The proposal was approved in December 2015, and funding was allocated through the village budget in 2016. The community, together with Semak, will establish a counselling center for victims of sexual exploitation and a skills-training center for children who have dropped out of school.

In East Lombok, where the greatest number of female workers in the country go overseas, poverty is high at 23 percent, and half of the population is of reproductive age. A lack of employment prospects narrows women’s choices, so they often leave their children behind to go work overseas. Given the number of young children and youth that are living on the island – often with ageing grandmothers – the region’s development needs are unique. The budget advocacy NGOs helps train the Santai Foundation, the local NGO working in the field, and community members to identify and articulate their development needs into the village budgetary processes. As a result, Santai successfully advocated for a revised medium-term development plan to accommodate a program on access to legal identity, health, and social services for children of migrant workers, as well as a parenting skills program for the families that take care of the children in Lenek Lauk village.

Working toward inclusive government and society remains a challenge in Indonesia’s villages. One of the most effective ways to do this is through strengthening the implementation of the Village Law by ensuring that the distinct and varied voices of those most excluded from society are given a platform to speak and make change. And in this way, the president’s message to the village heads in Boyolali last December, to create villages united in diversity, will be realized.

Novi Anggriani is a program officer for The Asia Foundation in Indonesia. She can be reached at [email protected]. The Asia Foundation’s support to Indonesian Civil Society and Community-Based Organizations is implemented in partnership with the Australian Government. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

1 Comment

  1. Good news for those who believe all is not lost if one thinks innovatively about space and living well for the struggling young. We can and should do this with integrity in Malaysia. We should try this out.

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