Towards Wellbeing in Forest Communities: A Source Book for Local Government

Sites: District governments and decentralisation in Indonesia

Typical rural home in East Kalimantan, Indonesia.
Photo by Michaela Haug

The reforms that followed the economic crisis (Krismon) of 1998 drastically changed the administrative and political landscape in Indonesia. Regional autonomy has given local governments the authority and right to make policies more autonomously and to organise their budgets independently. Districts now have full autonomy to make decisions according to local specific needs and conditions, thus allowing regional diversity. They receive substantially higher budgets than before, although some of their authority has been diluted by later laws.

With these reforms, expectations and hopes were high that Indonesia, and especially the country’s poor, would have a brighter future. However, prices for food and basic commodities remained at a high level, while austerity measures imposed by donors made life even more difficult for the poor. Two decades of declining poverty rates were halted by the 1998 financial crisis which triggered a dramatic increase in poverty. The official figure has stagnated since 2001 at a high level, with only some slight recovery afterwards.

For remote, previously isolated and forested districts like Malinau and Kutai Barat, the potential gains from regional autonomy are especially significant. In the recent past, timber concessions were often the major source of government development assistance. However, few services reached communities and district residents were politically marginalised. Decentralisation now requires new levels of government accountability and attention to local people’s needs. Government is also responsible for delivering public services, managing local natural resources and creating local revenue.

Figure 2. Simplified administrative set up in Indonesian districts.

The principal administrative structure of the districts is shown in Figure 2. In contrast to the example from Pando, there is another administrative layer between communities and the districts—the subdistricts or kecamatan—which play a significant role in channelling or blocking community development proposals to higher government tiers.

A series of policies has been issued under the decentralisation reform that shape districts’ current interest in poverty. There are three types of policies: (1) the national drive to develop and implement a Poverty Reduction Strategy, (2) national assistance programmes intended to promote food security and reduce economic vulnerability, and (3) each districts’ own interest in creating self-sufficient, prosperous communities to maintain the financial viability of the district.

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