Government and governance, Law | Southeast Asia

10 March 2021

Indonesia’s approach to cracking down on corruption is failing to account for the shortcomings of the village governments it targets, Garry Rosario da Gama writes.

Six years ago, the Indonesian government passed Act 6 of 2014 of its legislation regarding village governments, which was designed to decentralise the fiscal, administrative, and political systems of government in Indonesia’s small villages to prevent corruption between arms of government.

Decentralisation is an anti-corruption strategy employed in many countries, primarily because it improves civic engagement in annual development planning processes at the village level.

While there are clearly positive outcomes of decentralisation, including more people in processes that involve large sums of money creates new opportunities for those people to engage in corruption.

As a result, data shows that the corruption of funds intended for village governments in Indonesia has increased, costing the country billions.

Part of this is simply the pace of Indonesia’s development and giving greater responsibility to governments at the village level. Since 2016, village governments in Indonesia have transformed to become more modern, and been charged with overseeing massive infrastructure development.

In the last five years, funds distributed to village governments have been used to build 66,884 kilometres of village roads, 512 kilometres of bridges, 1,819 village markets, 14,034 wells, 65,998 drains, 686 reservoirs, 12,596 irrigation infrastructures, 11,296 kindergartens, and 3,133 health facilities.

More on this: A crisis of corruption

However, behind this success story lie some murky dealings. Surveys conducted by Indonesia Corruption Watch show that between 2015 and 2018, there were 181 local government corruption cases in total across the country, resulting in losses of around $4 million.

Importantly, many of these cases involved village heads – traditional leaders in the community – allegedly colluding with the government officials they appoint, with this trend only growing. 15 village heads were implicated in corruption in 2015, 32 in 2016, and 65 in 2017.

Along with village heads and their families, public servants, mayors, inspectors, and judges have been involved in corruption cases in Indonesia in recent years.

So what is causing all this? There are two key problems which lead to corruption in Indonesia. The first is weak central oversight of funds allocated to village government, and the second is a lack of resources – specifically education, expertise, technology, and competence – in village governments.

Thanks to decentralisation, village and local government is quite removed from the national government, which, while providing some advantages, usually means that village and local government is less accountable bureaucratically, and this has caused oversight problems.

To remedy this, the national government, through the Home Affairs Ministry, has worked in tandem with Indonesia’s National Government Internal Auditor or Badan Pengawasan Keuangan dan Pembangunan (BPKP) to launch Sistem Keuangan Desa (Siskeudes). Siskeudes is a village financial reporting system for the management of funds allocated to village governments.

More on this: Tackling corruption

This system requires village governments to submit their annual development planning directly to the Home Affairs Ministry through a computer program.

However, Siskeudes has not been able to achieve its objectives because there have been several problems in its implementation.

Many villages, especially in eastern Indonesia, experienced difficulties accessing the system due to limited electricity installation and poor internet connectivity, making its rollout essentially useless in these villages.

While this is important and the government needs to make the system work properly, it has other options for tackling corruption too.

Even among those who can access it, limited competence among village heads and village officials in using the system is weakening oversight and leading to corruption, especially maladministration. The government needs to work with village governments to develop their skills in this area.

This limitation seriously affects the technical management of funds allocated to villages and addressing it would empower village heads to abide by new levels of financial accountability.

Policymakers could assist by building the computer skills of village administrators, especially in eastern Indonesia. Those village governments without these skills face great difficulties using Siskeudes, and may even be making honest mistakes that undermine their ability to transparently report on funds allocated to them.

If the Indonesian Government addresses these shortcomings in its anti-corruption strategy – that it has become too decentralised, and that a major piece of technology it is using to enforce rules can’t be used by a proportion of the people it is intended for – it could finally make some progress on this issue to the benefit of all arms of government in the country.

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