Regions
From The Report: Indonesia 2012
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With some 17,500 islands tied into a single political system, a centralised unitary government has not proved adaptable to Indonesia’s geography or society. Decentralisation, which began in 1999 and devolved power to local administrative units, has seen both successes and failures, but should hopefully prove more stable in the long run. Critics see the programme as multiplying local bureaucracies and putting power in the hands of inexperienced or corrupt politicians, while supporters point to the dissipation of violence in formerly restive areas. The government’s Grand Strategy for Implementation of Decentralisation would attempt to address the concerns, giving a supervisory role to provincial governors, and allowing the central government to overrule local laws that conflict with national laws. The Indonesia Investment Coordinating Board (BKPM) has also instituted a Regional Champions programme that highlights certain provinces with the institutional qualities required for quick impact projects. Projects that have been awarded to regional champions include toll roads, geothermal power plants, mining and airport projects.

This chapter includes a viewpoint from Satish Mishra, Managing Director, Strategic Asia

Articles from this Chapter

Overview

Local governance: Decentralisation has presented both challenges and opportunities
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Since 1999 and the beginnings of the current democratic era in Indonesia, the country’s regions have had a much greater say in their own governance and economic development. A process of decentralisation begun in 1999 has continued to impact business and investment until today, with the results often controversial. At the same time, certain regions have emerged as important destinations in themselves, with the central government and other agencies anxious to spread economic development…

Viewpoint

Satish Mishra, Managing Director, Strategic Asia, on the country’s decentralisation process
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Indonesia is often described as having undergone a “big bang” decentralisation process. This view points to the unfinished agenda of Indonesia’s decentralisation architecture. But it hides more than it reveals. In fact, decentralisation was but a single act in the unfolding drama of Indonesia’s systemic transition. Within a decade, this transition has brought about a series of reforms spread across an array of governing institutions. Indonesia has transformed its electoral system and the…

Analysis

A star performer: South Sumatra receives recognition for its strong development potential
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The year 2011 could turn out highly important for the Indonesian province of South Sumatra, as it prepares to host the South East Asian (SEA) Games, an event that will focus regional attention on an up-and-coming investment destination. Indeed, the province also hopes to benefit widely from the attention it has received as one of the country’s Regional Champions – provinces that are to receive special promotion by the Indonesia Investment Coordinating Board (BKPM). South Sumatra received…

Analysis

And the winner is…: Regional Champions stand apart with their economic development
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Early October 2011 saw the Indonesian government announce the winners of its second round of “Regional Champion” contests, with seven new provinces gaining the coveted title. The Regional Champions are provinces selected by the Indonesia Investment Coordinating Board (BKPM) for their success in promoting investment, business and economic growth. APPRAISE: The award focuses attention on leading areas of the country, all of which have leveraged their competitive advantages to raise their…