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A TENTATIVE REPORT CONCERNING
INDONESIA'S ADMINISTRATIVE SYSTEM,
ITS CAPACITY AND PROBLEMS IN CONNECTION WITH ECONOMIC DEVELOPM ENT
T.M. SMITH
UNIVERSITY OF CALl'FORNIA DJAKARTA, INDONESIA
JANUARY
I 1970A TENTATIVE REPORT CONCERNING
lImOHESIA • S ADMINISTRATIVE SYSTEM, ITS CAPACITY Am>
PRO~ IN CONNECTION WITH ECONOMIC DEVELOPMENT
Prepared. at the Reque&t of
Drs. Baron Zain Governor, West Sumatra
and
Colonel Achmad Lamo TNI Governor, South SUJ.awes1
T.M. Smith
University ot California Djakarta. Indonesia,
January t 1910
F 0 'R E W 0 R D
. . . .. .~ ...
The report which follon is tentative. In cODllect101l with Wf/ tleld re.earch in Weat S\SI.tra and South Suia.weal, both
Governors aaked it they m:l.ght soe a report descrlbins rq tiD41na.
aDd conclusions concerning Indonesian administrative capacity 1n cODllection with the impl.eIIenta.tion of Repe11ta. Be1ther Governor
"... interrleved for tho purpose o~, this report. aDd neither will have .een it betore receiving :tiDal. c1ra:tt copies. In abort.
vhUe both Governor Za.in and Governor Lame encouraged aDd
a.aisted ae in this work. the report haa been prepared in4epn4- ently by a doctoral candidate traa the Univeraity of California.
Although neither Governor bears any respone1bl1lty vhat- soever tor the coutents. it is a measure of their general interest in developaent and their specIfic interest in salving Repellta ad111nistrative problema that they encouraced me to write this report. To each of thea go 'IIJ'1' thuks and ~ respect.
T.M.S.
Djakarta
January 20 , 1970
INTRODUCTION
Indonesian History and the Priority of Political Goals. Every governmental system has its problems; there is no system which does not have any problems. And every governmental system has certain goals which have been decided upon by the leadership of its government. These goals always determine the main functions of the apparatus and they have a significant influence on the kinds of problems that administrators must face. Indonesia is no exception. For almost 25 years the Government of
Indone~ia has been primarily concerned with the main political goals of na.tional integration and stabilization and security. To achieve these goals, the main functions of the Governmental system have been control and regulation-- or, phrased differently, containment of those activities which seemed to threaten unity and the restriction of regional atteml'ts to launch cbanges independently.
In shaping a governmental system to perform these regulations or containing functions, many of the aspects of the Dutch colonial regime have proved very helpful, for the Dutch too had. established. a governmental system to ensure efficient political control of the Indonesian people.
And the Dutch attempt in thei.r last years here t.o establish a federal system (i.e., more autonomy for the regions) encouraged. the Indonesian Revolutionary leaders even more to choose a strong, centralized govern- mental structure. In addition to these colonial influences, there were
factors from traditional society which contributed strongly to the need for a very centralized structure. First, as a new nation, there were perhaps more forces capable of dividing the country than of unifying it:
differences in race, language, geography, religion, and customs provided bases for serious political conflicts. Indonesia needed an integrative
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revolution. Beyond this clear need for a central, unifying governmental structure, there was also So long history of kingdoms ",herein all power was thought to derive from above, fram the kings. All important decisions were made at the top and the implementation was left to the king's
administrators.
In short~ modern Indonesia's political system and governmental structure is both a legacy of traditional Indonesian statecraft and of the Dutch colonial structure. But its centralized governmental structure also derives from the compelling need to build unity in a highly fragmented, highly diversified national culture. Given their main goals of political integration and stabilization) i t appears that Indonesia's revolutionary leaders were correct in their choice. Integration cannot take p1a.ce in a highly decentralized system and there is ample evidence that other countries have recognized this also: e.g. , the Soviet Union! China, Turkey, Nigeria, etc.
New Priorities in r~ic Development. However, if und when a nation decides that economic goals should be given greater priority, there is usually a need for some change in the highly centralized structure. In the Soviet Union this happcll'.>d when political lead.ers became dismayed at the failure of the economy to expand rapidly under strict central control.
The Soviet states and Rtate enterprises vere given new freedoms. to operate independent.ly. China's "Great Leap Fontard" of' the late 1950' s decentra- lized economic activities so much that steel almost became a cottage industry. 1) <Japan, Germany, and the United States, after political inte-
1)
It is noteworthy that China probab:}.y.went too far in emphasizing economic goals at such an early time in the country's new history and that China was later forced to centralize aga.in as major political problems of integration developed.- 3 -
gration a.ud stabill't1 were assured, adopted or pursued strong decentral- ilation policies in the economic sphere.
Indonesia has announced new goals of economic development and the
&1harto government appears comnitted to economic developn8nt. But develotaent is really the opposite of sta.bility, for development meana chage. The evidence from other countries (and from Indoneaia) indicates that a b1gbly centra.lized. governmental structure, established to serve the primar)' goal of containing change. usually encounters geat difficuJ.ty ill attempting to generate change. At the present time, Indonesia's
goverDlllellt ia probably far more capable of cont&inins change thaD ot eucourqiDg it. To prove this point woul.d take considerable time but .cae of the difficulties faced by a higbly centralized system include the toUovins:
1. Centralil&tion (decision-making only at the top) restricts the
opportunity far potential change agents at lower levels to enter into the process of development. Studies of entrepreneurial history
throughout the whole world clearly indicate that most entrepreneurs do not come from the ranks of statesmen or poll tical leaders, but that they often originate in underpriviledged groups.
2. Centralization tends to delay decisions and their impleaeatation because of the long communications process involved. Entrepreneurs, either private businessmen or government officials, are aerioualJ discouraged. and limited vbenever they are forced to wait months aDd years for approval ot their prOjects.2
)
2) Government officials must also be considered to be potential entrepre-
Dean-S who have the capacity to devise new developnent ideas and to ce:rq them out. Djakarta's present Governor i8 a good example of what is meant
b7 a "bureaucratic entrepreneur". .
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3. Because direct supervision is impossible in highly centralized systems of government, a great many controls must be established through the issuance of laws and regulations---in short. a great amount of red-tape is essent~al in a centralized system. It is clear that this tends to reduce incentives for potential entrepre- neurs (change agents) to initiate and implement new ideas.
4.
Centralization in a governmental system where modern communications are lacking necessarily means that top decision-makers will receive only limited information. In short, their decisions will probably be based on a minimum of accurate information. Decisions will therefore be less rational.5. Centralization often requires the issuance of general la~s and regulations which do not fit the needs of the various regions, particularly if there are economic, cultural, social and political variations in these regions.
6.
Finally, centralization tends to perpetuate a colonial mentality.Middle and lower level government officials tend to regard Pusat officials as the masters whose will must be carried 01.lt without objection or conflict.
The above list indicates only some of the difficulti~8 ~ centralized regime faces when it decides that the goal of change (i.e., economic and social development) is important and begins to give serious attention to that goal. This is the present situation in Indoriesia today. To achieve the new goal of economic development, some changes or adaptations in the ' administrative'structure are needed. And as I will expla.in~ many of the
administrat.ive problems which are discussed every day by government officia.ls and by the public can be overcome or partially overcome with increased decentralization of Indonesia's administrative structure.
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ADMINISTRATIVE PROBLEMS
The Government of Indonesia faces many administrative challenges at this time a.nd as briefly as possible I want to explain several of
them, in some cases suggesting a potential solution for top administrators.
First, however, three points must be remembered:
l . Although there are many techniques of efficient administration in Europe and the United States which could be used in Indonesia, there are also many which would not work at all here. Neither Indonesia nor any other new nation should attempt to borrow everything from another governmental system.
2. , An analysis of Indonesia's administrative sy~tem should always take into account the important cultural variables which affect'the administrative process. Among others these include tbe following factors: Indonesian hiBtOl~, the economy, geograpby, national goals, political parties, religion, and political military family ethnic relationships. These factors and many others have an important and direct effect on the working of the government system.
3. All recommendations in this report are based on the assumption that top government officials want to increase the productivity of their organizations. It is assumed that they wish to improve the
capability of their organizations to fulfill the requests of the President, the MPRS/DPR, and of the Indonesian people. This report will not be helpful to an administrator who does not share this goal.
If a scho~~ such as myself really wants to help Indonesian statesmen (Government leaders and decision-makers), he should try to demonstrate the effectiveness of the changes he recommends by answering the following
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question: "How much 'Will it cost to make this administrative change and what will be the results of the change?" These costs should be calculated Dot only in rupiahs but must include political costs also. Because this is a tentative report~ I cannot yet provide this kind of analysis, but I hope to be able to do much better when my data is tabulated later this year.
1. Problem: Overburdened Top Adxninlstrators. I t is a fa.ct t.hat good administrators are usually very much overworked. There are at least two main reasons for this problem. First, the centralized structure forces
all decisions to the top; the Minister, the Governor, or the Bupati alone is obligated to make these decisiolls. As a result, everyone with a request feels the need to see him and onlY·him. Second, most administrators are unwilling to delegate authority for making decisions on matters which are not completely routine. The result is that the Indonesian leader is continuously required to make decisions (a great many of them very small ones), he is besieged by' demands from every side (both from inside a.nd outside the Government), and he generally has very little t~~e to do much serious thinking about the choices and decisions he makes.
One very negattve consequence of highly centralized decision-making of this kind becomes obvious whenever office heads and bureau heads leave their offices for trips or for other purposes. In general, whenever one of these officials leaves his office, nothing of an important hature can be accomplished. Subordinates
are
almost never given the authority to a.ctin behalf of their superiors and all non-routine bUsiness usually comes to a stop. This single factor is I;l. major obstacle to efficient administratior..
at every level of the Indonesian governmental apparatus.
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'(-
Suggestion: lviore authority and responsibility should be delegated to subordinates in the sense that more internal office decentralization is needed. Many administrators com.plain that their subordinates are not capable. If this is true, then leadership must be developed! Not until selected subordinates gain experience in the use of some authority and responsibility will they become leaders. The process of developing leaders is a slow one, but each administrator has an obligation to make this
investment in the future of his country. In adqition to developing leaders, each Minister, Governor, and Bupati ought to build a capabJe
.personal staff to serve as his eyes and ears. In judging leadersh~.p
capability, one of the best measures is the competence of an official's staff.
II. Problem: "Subordinates Often Are N:-,t Very Capable". While it is true that many subordinates are incapable and do not have good ideas, I would prefer to view the middle ranks af a Governor's office (and most other organizations) as having considerable ll.nder-utilized or unrecognized potential. True, the educational system and the high degree of centraliza~
tion in decision-making provide serious hu,ndjcaps fo' the development of this potential, "but there are a lot of smart people in the lower ranks;
I know this is true because I have talked vith them.
Suggestion: Upgrading courses will add new skill and knowledge, but experience is always the best teacher. To realize the potential of
subordinates, they must be given more responsibility. It is best to begin by giving them responsibility for providing a~vic~, not for decision-
making. Every good administrator (especially if he is overburdened) ought to always be testing the capacity of a few of his subord.i.nates; and if they fail too many tests he must move on to test others. Bureaucratic entre~
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preneurs do not develop where there is no freedom for offi.cials to act on their own. It is as simple as that .
III. Problem: Incentives and Sanctions. Incentives and sanctions are the only tools ~lhich a government'leader has to increase the performance of his subordinates. Possible incentives include: salary increases,
promotions, more responsibility and authority, trips, study opportunities, housing, a vehicle and salary supplements in return for increased work assignments. Sanctions include the denial of the above rewards plus the additional possibility of dismissal. Under present conditions, it is true that only a few of these tools can be used and those only rarely. Rapid promotions and meaningful salary increases are almost impossible in practice (although possible in theory) and it is probably easier to move a mountain than to discharge an official for inefficient or poor pe:r:forma.nce.
Suggestion: Because of their unavailability, the matter of incentives is more important than ever. I would urge top administrators to forget sanctions for the present time (political , cultural, and administrative obstacles are too great) but to concentrate on i.ncentives. Since official salaries and honoraria are difficult to changE' and often meaningless, every top administrator should try to find. some alternate 'source of funds in order to provide informal incentives for his most capable and trusted subordinates. As potential incentives, ABRI officers have something cal·led "Funds Taktis," the Ministry of Finance has its Premi (100% of the basic salary), and the Ministry of Public Works has salary incentives
attached to every Repelita project. The difficulty with these bonuses (particularly· in the Ministries of Finance and Public vlorks) is that they are not tied to performance; poor performers receive the same as those officials .,hose performance (capability and hard work) is excep+,ionally
good. Governors or Bupatis have greater poten~;ial for affecting performance among a select group of outstan<iing subordin&tes because they usually
have more control over their 'bu<igets than do officials from the regional offices of the various ministries.
IV. Pl.'oblent: Discipline. Tne problem of lack of discipline in government offices is linked with a number of factors: tile lack of job definitions or descriptions, g~neral economic conditions, low salaries, little appreciation from superiors for the work of their subord.inates, poor placement of offida.l.s (the right man in the wrong place and vice versa), a lack, of leadership, too many employees, 'traditional mental attitudes, etc.
Suggestion: With so many factors involved, the best approach is
probably to begin 'With the !;asiest solution--job descriptions or definitions.
Until thege are completed and tested, there can be no rational measurement of perfOl$enCe, no accurate standard on which to base selective salary
increases, no completely rstional way of fitting the right man to the right ,job ~ and nO full ullaerstanding of the surplus or shortage of
em.ployees
:n
each goverrJI"lent off.!.ce. Since steps are already under ,.my to begin writ:i.ng and applyinlJ; ,job descriptions, it is not necessary to ad.d much more. Howeyer~ it b of greatest importance that political leaders and top aCL"tJinistrators e'PP'eciate and highly value the implementation of job descr:i.pt.ions as the ,sin.gle tool which' can m.ake possible the' solution of many: othel' problems just ~escri bed above. Job descriptions may seem like very sLTfiple' things, but they have the potential for being very , important.- 10 -
V. PJ:'oblem: Government Officials' Salaries. I am collecting a considera,bLe amount of data. on salaries and on basic needs of government officials fJ,"::lm th,= 10.Test ranks in the daerahs to the highest ranks in Djakarta. The data includes information on the following factors:
a. Fow many Government officials hay€ more than one job and how many jobs or sources of income they have;
b. the amount of time they give to their government job and to their other jobs;
c. ' hether or not they own land and hO'\>T many hectares they own;
d. \,hether or not they have jobs in trade or tndustry, either l.arge or small;
e. ",heir ,minimal monthly rupiah reQuIrements to fulfill basic
living needs such as housing, clothing, food, transportation, medicine, etc.
f. present ba.sic salaries and supplemental income in the form. of' bonuses, honoraria, allowances;
g. the number of people in each official's family that must be supported from his earnings;
h. monthly expenditures by government officials;
i. montr~y incomes of officials' wives, if they themselves also have jobs;
j. the number of officials who receive housing and transportation (vt'hicle) from. the Government;
k. the role of cooperatives in providing for the welfare of Government officials.
This data ' 'ill be used later to support a series of proposals for salary reform. 'I'he only tentative conclusion which can be made now is tha.t the basic needs C'f higher officials appear to be proportionally greater than the needs of lower officials. !J.'herefore, while increases are needed.
at every level, gI~ater percentage increases are needed at higher levels.
I repeat, this conclusion is tentative.
VI. Problem: Promotions for Government Officials. There are two problems which st~md out in connect ion with promotions: the most important one is that it is a.lmost impossible to promote young, capable peopl.e to important positions. This constitutes a significant loss to the Government of Indonesia in terms of potential skilled manpower--a loss which is seldom considered in manpower planning. Clearly there are cultural factors
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involved (e.g. the high value given to seniority) as well as political factors which mak.e a change in this policy difficult.l )
However~
someonehigh in the Government should. begin to give attention to the problem if they are not yet doir~ so.
The second problem concerns the amount of time required to secure a promotion through the Civil Service Office (KUP) after an official has fulfilled all conditions according to the regulations. The Ilspeed money"
which is usually required in order to secure the promotion is not nearly as important as the long time required to arrange it. Data from my
~uestionnaires indicates that almost all officials are unsatisfied or totally unsatisfied with the promotion system and that the average time needed to complete the process varies from !~ months to 2 years.
Suggestion: A connnission ought to be established to review the general problem of promotion, later reporting its findings to the
President and the national legislature (DPR). The commission should be given two tasks: (1) to find out what the potential gain would be in changing present promotion regulations in order to permit a more rapid rise of highly qualified younger people; and (2) to discover the strengths of cultural and political factors involved in this problem.2
) In short,
1) Because of the influence of political parties inside some departments (particularly at the Pusat level), the opportunity to promote younger people more rapidly could easily be used as a device to both reward party loyalty and to strengthen the party I s position in the departments. Clearly this is not the goal of progressive Indonesian administrative reformers.
It is equally clear that political parties will. be very interested in almost every proposed administrative reform, because all reforms have the potential for either increasing or decreasing the power of the parties and their
leaders.
2) . Those who believe that cultural and political factors alwa;ys make the promotion of young people impossible should inspect the office of the Governor of Jakarta.
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a rough cost-benefit analysis of changing the promotion system is needed. As to the performance of the KDP. my first suggestion would be to
decentralize its office so that promotions could be completed much faster at the provincial level.
An
alternative to this would be for the Govern- ment to make a meaningful inV'e:;;tment in the KUP office in Jakarta with the intention of improving its performance as fast as, possible. And a final possibility would be a merger of the KUP with the Ministry of Manpm,rer which already has offices ir. the provincial capitals.VII. Problem.: Recrui':.ment and Training. Temporarily Government offices have been forbidden to accept nev' employees except under apecial circumstances. But recruitment will be a problem in the future and attention ought to be given to i t nO"1. Are Indonesian universities training people for the Goverrunent I s manpower needs and are Ge·"\' ernmen t offices recr',dting the right people? '1'0 give one concrete example: the Ministry of Interior is now assuming major tasks in the field of regional economic deyclopment ~ but i t;s uni vel"si ty graduates a!'e overwhelmingly graduates of faculties of :~ociology, politics, and law--perhaps as mar,y as 95%. I f a Bupati asks 1"01' an economist to head his developrr.ent bureau, he oft.en receives s. lawyer from the Ministry. Another example: Tjarnats, t~e central gover~ent officials most closely linked to 1..he people. are supposed. to be trained to become agen2 modernisasi ~ 'out the curriculum in the Government academies is almost entirely a i:>ociology/
politics curriculum and has little or nothing of eco~omics or egriculture in it.
Suggestion: Upgrading courses a.i·e good for briefing purposes, but in addition attention must be given to university and academy curricula.
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Training in agriculture, economics, and a little bit of basic engineering might be added. The fields of politics, administration, and law train people to regulate and control, not to generate or encourage economic changes!
VIII. Probl.em:
problem of technology but i t is also a problem of' desire. We ca.n ignore technology because this problem will take care of itself; new equipment arrives tNery year. It is a fact however) that the upward flow of
commulJications in the Indonesian Government is much poorer than the down- ward flow. The result :LS that decision-makers either do not get enou.gh information or they get a mass of information once a year that is
vi.rtually meaninglt!3s. In addition to this, most administrators usually do not encourage their subordinate~ to offer conflicting advice which would give them a ·better opportur.ity to make -hhe best choices between
possible alternatives. Trc.~ditiona~ cu.ltural factors (mostly psychological) are primarily responsiblE for this, 'out present-day political and economic factors enter also .1) .
Very little atteu'.jion S0ems to haVe beer: given to routine communica- tions until nO'N. Often it tak<::s more tl1an a month from the date of conception of a letter until tl'.e time it is finally mailed from a Pusat office. Oft.en letters from th"" regions concerninfs the proper inter-
pret':l."tton of regulations are not. answered. Hany 0fficials are very unhappy
1) A. major difference between Indonesian orga.nizations and those in the West concerns the amount of conflict that takes place -within organizat10ns.
Conflict is encouraged in the West, }>artly because i t brings out new :i.d~as
and improved methods of work much fa~ter and partly ~ecause Westerners like conflict and competition. Genero,lly speaking, Indonesians do not like conflict and the adversary system is seldom used.
with communications in the governmental system.
Another aspect of the comrounicatior;s problem is the lack of desire by many bill'eau heads (1;>oth at the Puse,t cJnd the Province level) to visit offices in the daerahs. In truth, a l~-,.,::( of facilities and. limited budgets often makes travel to rural areas veryifficult, but a general lack of desire on the part of many officials msJ ::s the matter even more serious.
It might be noted that the Armed Forces 1);3ually have a much better travel record and a better understanding of loc3.1 conditions than do civil government organizations.
Suggestion: There is no easy solu~L'n to this problem. However, if the lower levels of Goverrunent know that' ':,heir data will be used~ and if they are given clear guidelines from the top' as to what d.ata is speci- fically need.ed for planning purposes, the s:.tuation will likely improve.
The problem of soliciting different views on policy alternatives is lar'gely a personal matter relating to mental att.itudes, but i t certainly ties in with the proposal for giving subordinatt's :i.ncreased. opportunities for responsibil ity in providing advice. Fim.lly, mOTe trav ~1 to the daerah.2.
should be encouraged, espec ially for bu.::' 0801 , heads.
IX. Problem: Coordination and Cooue.rat ion.
~--~---~~---- Indonesians have dis- cussed these problems for years but as far as I know very fe ... T people have ever tried to analyze them or to do an~' researeh about them.
r
have not.,
completed my analysis yet but I can offer three tentative cOPclusions: 1. The main coordination problem in i~i.le whole governmental system is not.
vertical coordination which is usual ly smooth, but horizontal
coordim:.tion--both between departments and. vrithin departments. This can probably best be explained. by the hierarchical quall ty of
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Indonesia I s culture and by the strong centralization 0:::' its govern- mental structure. Based on scores of interviews, my conclusion is that almost every government official is inclined to look upward for directions) preferring not to tackle hard decisions at his own level.
Horizonta.l coordination) however, requires that decisions not be referred upward but that they be resolved without the help of a higher official.
2. One of the chief reasons for "poor coordination" can be found in the different time perspectives of government officials. The Suharto Government wishes to speed up economic development which means
accomplishing much more in a shorter time period. However, illany officials are not accustomed to accomplishing their tasks in a short time and they do not yet value time highly. Therefore, smooth
coordination and quick implementatioll of deve10pnent are not considered to be important by them. \fuile this s+'aternen~' is true, :;.t is not
meant to be critical. Changing the time pers.{lectives of ' government officials from a traditional to a modern od e.'To.;ation is !l. task. faced by all new nations which are giving economie d.?-velopment high
priority.
3. Coordination at the provincial levf!l is usually better than i t is at the Pusat level. 'l'his is 8. result of two fac'c,ors: fj.rf';t) officials are much closer to each other at the province level; 'chey see each other more frequently socially and they work together r.tore frequentl:,{.
Second, it is much easier at the province level to see the results of poor coordination--i.e., the failure of p~ojects to develop physically.
Lack of coordination at the Pusat level may merely result in an
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interruption in the flow of papers; at the province or kabupaten levels it means highly visible project failures. In short, the incentives for coordination are almost al_ways greater at the lower levels.
Additional factors causing problems in coordJne-cion include the following:
1. The influence of political party, mi-litary, and regional loyalties in the various government departments. These factors serve to divide, not to unify, the thinking of government officials, and therefore often make coordination very difficult.
2. The weakness of political parties as independentr.epresentatives of the people outside the Government means tha.t no organization or group is able to bring failu:::"es :in coorclinat:Lon to the quick attention of Government leaners. Whatever their other weaknesses ma:y be, strong political parties usually serve t.he fundion of keeping the: Government responsible to the people.
3. The lines of authority are somewhat confused at the Pro'rince leN€ l . Ndther the Governor nor 'the regional offices of the Pu8at. is in faet Ll a superior P062 tion. This means that there is [L greater need for horizontal coordination and. as noted above, horizontal COO1:"di- nation is the most difficult kind of coor.dinat;ion to achieve.
Suggestion: CoordinatJ.on will be impl"m-ed as government Offidals begin to value time more highly. Planning i6 one of the best strategies to accomplish this and the Five-Year Plan has already brought some changes.
Every top administrator c5.~'1 speed up this process even more. ho'V.'e'ier, if he begins to urge that some planning be used for routine as well as
development projects. If subordinates knmN' that their tasks are expected to be accomplished in specific~ short time periods, they will begin to value time more highly with the result that smooth coordination will became mere important to them.
Second" because coordination seems to be better at the provincial than at the Pusat level. more development problems requiring coordination between departments shoule.. be delegated to the provincial level for solution.
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Finall~> every Governor should gain additional formal authority to coordinate projects within his province. This 'Would allow him to break through many bottlenecks caused by conflict ins Pusat interests in the provinces.
X. Problem: Overlapping of.' rl.lns:tions. Often f.'everal government departments are attempting to carry out the same function in the same place at the same time--and usually with very little mone:. To give one concret.e exa:m.ple, that of village educational development: -'he Department of
Interior supports a Village development program (Pe,nba .... lgunan Masjarakat Desa), the Department of Social Affairs supports ic.stitutes for social development (Lembaga Sosia1 Desa), the Department of Education and Culture supports village adult educational programs through Pendidikan Masjarakat, and the Departrne:rt of Manp01.er already has plans for ex.tending its
provincial training program., (Plisat Latihan Ke:tdja) to the v-illage level.
All of these programs are primarily concerned with education or tra.ining at the village level and they axe all piled on top of each Bupati's or Governor's own programs for village development. Moreover~ they are poorly financed, suffer severely from bad cOtr.munic:ations, and nomally have little
mor~ than enough money to pay officials I sa.laries. In fact, many officials receive their salaries and do not work at all. Finally because they are low status organizations and tend. to be buried in several departments~
foreign agencies interested in ~elping village development are probably d · .l.scourage d f rom attempt4... ng to help.1)
1) There ere Of-course many other village development programs such as those of the Ministries of Agriculture, Public Works, and Health, but because these programs are in specialized, technical fields they do not overlap much.
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SUggestion: A careful review of village educational development programs is needed and probably a consolidation of all programs under one ministry. Until this is done, the Go-"rernment of Indonesia will be wasting money and actually will be hindering the progress of stronger village programs.
Other overlapping problems should be studied, for the case mentioned above provides only one concrete example of' a general phenomenon.
XI. Problem: Overstaffing: Is there a surplus of Govern!nent Officials?
~fuile almost every foreigner and many Indonesian officials believe that the governmental apparatus is overstaffed, there is still very little evidence to prove this. I have never seen any data proving this point, nor have I ever heard what standard of measurement has been used to prove that there is a surplus, or how large the surplus is in actual nmnbers or in
percentages.
It is clear that some departments and bureaus have surpluses and that other depa.rtments and bureaus have shortages (e.g. the shortages of
elementa.ry school teachers). My own study covers four departments (Interior, Public Works, Finance, and Educa.tion) and in each department there is some evidence of overstaffing,l) Offic:i.als f::-om. some Pusat departments at the Kabupaten level receive their salaries and do no work at all. Many officials have never been g:i.ven work, ha.ve no defined
1) In several Interior Department bureaus every time I entered during a period of one ~onth, a majority of the officials were reading the daily newspapers because they had nothing else to do. Heads of some Ministry of Finance regional-offices have told me directly that they have too many officials. The Head of Public Works in one province said his office had a large surpJus of administrative personnel, but a shortage of technical personnel. And in Education there is common knowled~e that Pendidikan Rakjat, Olah Raga, and Kebudajaan are overstaffed, if their actual activities are used as a measure.
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responsibillties and usually spend the day outside the office on personal business.
Some government organizations (e.g., Garuda) have been very successful in reducing.their overst.affing, based on a careful analysis of their needs.
Most organizations, however, have not begun an analysis of their manpower needs and are fearful of the political consequences of discharging large numbers of employees. Regional offices of most Fusat Departments have no freedom at all to rationalize or to make policy in this area, and they have done nothing whatsoever.
Suggestion: Each department should be required to carefully analyse and justify its manpower needs based on its current share of the national budget. After this a few departments should be encouraged to attempt experiments in the discharge of employees--subsio:Lzing them for a maximum of 2-3 years while they locate new jobs. For most discharged officials, this will mean finding additional work to supply only 20% to 40% of their total needs. Some departments should be urged or compelled to restrict the scope of their programs, programs which in fact are not being imple- mented anyway, for it is a waste of scarce resources to pay officials to do nothing.
The political impact of this rationalization cannot yet be measured) but that is not a good reason for no policy at all. Some first st.epS
should be taken and they can more easily be taken now ~-lhile political parties are still comparatively weak. For as political parties 'become stronger and better financed, the political costs of dismissing surplus . employees will increase for the Suharto Government.
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XII. Problem: ]3ti.dgeting and Centralization. I intend to give this problem much more study in the next several !!lonths but three concrete
exa~ples illustrate the problem. The Faculties of Economics at Andalas University and at Hasahl'.ddin University each hn:ve about 40 employees
working in theiT adminhcrative bureaus. The deans admit that they do not need more than about 20 ~ach. But since the budget comes directly from the Pusat, any efforts to rationalize the ad.YJlinistrative bureaus will not save the faculties any money_ Savings in one area cannot, according to law, be applied to other areas of the budget, but must be returned to the Pusat. There is no incentive whatsoever for improved performance by regional offices which are funded directly by the Pusat.l )
The second exam,;>le concerns the regional educational offices in West Sumatra and South Sulawesi. In truth, these offices do no budgeting whatsoever. They rece:ive a subsidy from the Pusat and they have no freedom at all to exper.iment with an~' part of the subsidy; all of it is caretully designated for each budget category. The result is that there is n-:>t only no incentire for improv~d administrative performance (all savings are lost to each office), bu.': there also ls no incentive for
experimentation in the field of edu2a1~ion, a field which demands and needs continual ex~erimentation_
J:'he third example is also from ec.ucation, but concerns the new Fi ve-
Year Plan. If the Central Government spends Rp.l ,OOO,OOO for the construction of one scbool in South Sulawesi or West [:umatra, that school 'will probably
1) Indeed there :LS some flexibHity in the system. for H is widely known that unauthorized budget manipulation takes place in some regional offices. For example, develupment t~nds are sometimes used for routine expenditl1res, etc. But this practice does not provide any incentiye for better per- formance or bett er planl'!.ing.
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be completed. If the Pusat instead budgeted Rp.l~OOO,OOO and ga.ve the money directly to provincial governments to use as incentives for the construction of 10 schools (Rp.lOO,OOO each), there is a. strong probabil-
ity . that the public, the villages~ the kabupatens, and the provinces
could supply the remainder. Centralized financial planning provides 1 school, while decentralized financial planning might proYide 10 schools.
In conclusion, highly centralized budgeting is inefficient in
administrative terms and it often tends to limit development rather than to encourage it.
Suggestion: Gradually more of the responsibility for budgeting should be given to the provincial offices. This can be done on an experimental basis but should be started at once. The control function can still be maintained by the Pusat but greater freedom must be delegated to the Provinces.
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..
COICWSIOIS: 'l'HE, ·DID FOR DPERlMENTATIOlf A1ID Dremmw.IZATIOI
I baTe U'S\led that Indonesia' 8 centJ'al1zed sovermaental structure tits
pertect~ with the goals of political integration and stabilization, but that it ottel;l does not fit ~o wel), with the new goals ot econCllic
Ut'eloJlll!llt ad social challge. The suggestions which tollow stroD&ly v p sau new steps in the direction of greater auto~ tor the lover level. ot the Indonesian GoYernment--for most offices at the Provincial l ... el
aoct
eyeD tor' SOlIe at the Kabupaten level. New authority and nev tJ:oeeckaa at theee lower levels t if related specitically to tbe tields ot . t1DUCe. c.\eyeloJaent planning, and education, would not threaten politicalstabU1t7 DOZ' Indonesian national unity. On the contrary. they would . prob&bl)' have the positive effect ot involving the public to a much greater
ctecree
1n tbe process ot nation-building. In short. caretully- pl..a.rm-:<l.lI'acIual.. 4eeeDtraUzing efforts can nov be implemented without Jeopardizing the p~itlc&l. stabUity- of the Indonesian Gover~nt.
I. It lDdones1a'. soal is more rapid economic developnent, the following DeW decentralization policies are needed:
a. 'inance: a closer relation between taxation and expenditure tor developaent proJects is needed. Wherever people see their taxes used tor their own ben~tit. their willingness to paf taxes vill very likely increase. To sugses~ one 800d example, it a .peeial direct tax tor education were established in South SUlavesi and in West Suaatra. the evidence indicates that revenues tor educa- tion would greatly increase.
b. Buc!getipg: budgeting is merely-, another word tor tinancial plauning.
In order to encouraae hew ideas, experimentation. and bett.er per- tOl'Jl&DCe. every regional ottice ot the Pusat should gain nev authol'ity aDd treedcD for lUking up parts .of its budget.
c. Educat1on: each province should have new authorit.y to decide on educatloD&l pr1orities' tor itselt. The needs of each province are otten ditterent and this should be recognized by giving pro- v1Dc1al educational otficials more t'l'eedca to Dleet the needs ot the public in their prOVinces.
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d. - ~o1lOll11c . Pl8.nning.: acme part ot the Repel! ta budget should be t1ii'ned over to the Governors to use £or regional planning purposes. Beyond rice production, Repelita its!3lt vill have very little impact on the basic living standard· of the public in the next several yea.rs because most ot the projeets are infrastructure projects. The provinces should directly receive increased fUndS-tor secondary/tertiary roads and irrigation, for education, and '£or basi c village developDent.
The closer the development projects are related to the people, the greater will be the public's own contribution and the greater will.be their support for the Government ot Indonesia.
II. Indonesia's top governmental leaders are capable ot Writing developaent plans but .they themselves are not capable ot implementing these plans.
Development will be carried out by government officials'in the
provinces, by bu~inessment traders, farmers, and by the general public.
In Indonesia and in all other new states there is a continuing need to gain the strong support and help of the people who bear the major responsibility tor tmplementing development plans. Their cooperation aDd their contributions are vitally necessary to the acHievement ot obaDge. In short, this means that their participation is needed and that One 01' the major tasks facing the Government of Indonesia (and' all other new nations) is the task of encouraging participation in the development process. Same steps have already been taken: for example, the village developllent program (dropping 01' Rp.lOO,OOO tor each Tillage) and the proposed new public works program with dropping direct to the Kabupatens. But additional steps are neede.4:
&. Gover_ental Decentralization. The autonaay of most regional
offices of the Pu.aat should be increased. Those which bave no regional of':tices, such 8.8 tbe KUP, should begin to decentralize.
This decentralization need not take place" all at once but could be carried out slowly and on the basis ot'experimentation. Pusat regulations and laws should give more space tor local inter- Fetation and should b. reduc'ed in number. At the same tiae, new control and reportins poiicies should be implemented. Teams trom PUsat offices should make regularly scheduled inspections and workipg visits. Most visits nov
are
little more than observation- 24 . -
tOUl'a. Reports trom. provinc!al oftices should also be retormed;
leaa intormation should be sent t.o the Pusat but it should be lent more trequently. There sbould be clear i~truetionl trom Jakarta concerning the exact kind ot into~tion that is needed
. tor
pl.anning and economic developnent.b·. Organization&1 Decentralization. In addition to decentralization arid 1IlOre delegation
ot
authority on the macro level, there should also be new decentralization eftorts within each orsanization.To give more subordinates a chance to partioipate in dec1sion- aaking (or i~ advising) is to invest in the future leadership ot Indonesia. There is a detinite need to develop leadership and COnfidence among younger department employees. Carefully planned and supervised decentralization (either formal or
infonral) in each ottice is perhaps the best way .to develop this tal:ellt. In add! tion to preparing future leaders. heavily
burdened top administrators will tind their jobs somewhat lighter.
III. There il a clear need tor Il101'8 analysis of the potential benefits and coata of administrative reforms and a need to develop priorities for a4ainiatrative reforms. Most major adDiinistrative reforms are made in structural. terms. Organizations are restructured with the hOpe that the)" will be more productive, but nobody really knOys. Nobody baa analyzed the outputs before and. atter such ohanges.
a. Incentives: Rather than major reorganizations, the Government· of Indonesia should concentrate on those retorms which will .
increase the effectiveness of each government otticial. This task should also be decentralized for best results. by providing each department with general instructions but also with the treedom to adapt those instructions to its particular needs.
• • •
The problema outlined in this report appear to be the main ones
tacina the Gov~Dt o~ Indonesia in its ettorta to iaprove or rationalize ita acJainistrative _)'Stem. Many ot the problems
are
nov under study b7 the GoYeJ"llleut. but IIIOst ot them could beneti t trail much more attention. In the next several months I will be ana.l¥zina each of them more· closely- 25 -
and ccapUing a8 much da.ta a.s possible. I hope to be able to otter several concrete suggestions tor reform and to support these recommendations with rq data and with caretul i.nalysis. In addition, I hope to be able to
cCllp1te in general terms the prob~b~e benetits and costs of e&ch
recOIIDDeDdation I make, based on all relevant political., economic, and . cultural tactors. I should stress once again that this report 1s a tentative report, and that I would earnestly welcome comments, criticism and suggestions from any ot its readers.
Fina..lly, to the extent that this first report is usetul and inf'ormativ~,
I ¥ish to give tull credit to Governor Rarun Zain (West Sumatra.) and Governor Acbmad Lama (South SUlawesi). and to the ~ syJIlpathetic and conscientious otficials in their provinces. Their help and interest were iuvaluable. However. I alone am tull.y responsible -tor the opinions and suggestions ottered here.
