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3 - Papua II: Challenges for Public Administration and Economic Policy under Special Autonomy

from PART I - ECONOMIC DEVELOPMENT AND POVERTY ALLEVIATION

Published online by Cambridge University Press:  21 October 2015

Budy P. Resosudarmo
Affiliation:
Australian National University
Chris Manning
Affiliation:
Australian National University
Lydia Napitupulu
Affiliation:
University of Indonesia
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Summary

With the implementation of decentralization in 2001 and special autonomy in 2002, Papua was given a historic opportunity to dramatically improve the living standards of the mass of the rural population. There are two factors in Papua's favour at present. First, the flow of funds to the province is substantially higher than ever before in Papuan history, including during the last years of the Dutch occupation and the period of United Nations administration in the 1960s. Second, decentralization has been more extensive in Papua than in any other province in Indonesia (or almost anywhere else in the developing world). This has brought regional governments much closer to the people than they were in the past, giving them greater freedom to implement their own programs.

The short-term challenges and costs are substantial, however. Most importantly, an astonishingly large number of new government structures needs to be put in place following the significant increase in the number of districts. Moreover, the extraordinary increase in the public budget has created opportunities for widespread corruption, especially given the weak, and sometimes nonexistent, governance structures needed to guide public administration and economic management. Another major challenge is that of dealing with transition: from a centralized regime to a decentralized one; and from local governments starved of funds and dictated to from outside, to governments with large surpluses, supported by the local population, with the potential to develop and implement local initiatives. The process of establishing and strengthening Papua's political and government institutions may take a decade or more, and should be a central goal of government efforts. In this respect Papuans have much to learn from some of the successful, and especially the less successful, development experiments in other developing regions in the Pacific, where the economic challenges related to demography and geog raphy are very similar.

THE FISCAL IMPACT OF DECENTRALIZATION AND SPECIAL AUTONOMY

Before Indonesia's decentralization policy was implemented in 2001, most of the government revenues from mining and other natural resource extraction activities (in the form of royalties, taxes and so on) accrued to the central government.

Type
Chapter
Information
Working with Nature against Poverty
Development, Resources and the Environment in Eastern Indonesia
, pp. 59 - 73
Publisher: ISEAS–Yusof Ishak Institute
Print publication year: 2009

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