Villages in Indonesia cash in on new law

LAST year, the village of Kalijarak in Karanganyar regency, Central Java, received a mere 70 million rupiah (S$7,350) from Jakarta for urgent infrastructure repairs.

Its roads are in need of repaving, its bridges in need of fixing.

This year, headman Mr Tri Joko Susilo is glad that his hometown of 7,000 people will get some 600 million rupiah - the result of a new Village Law that boosts development funds for the country's 72,994 villages and lets them decide for themselves how to use this money.

The law, passed by Parliament last month reflects a trend of continued decentralisation across the country, and is intended to give village leaders a greater say in running their areas while cutting leakage to bureaucrats in the middle.

The law marks a landmark shift in spending from cities to villages, whose development has long been passed over and, if implemented well, could help stem rising migration of people to densely-populated cities.

Proponents of the law say pressure to act responsibly will be greater at such a local level.

MP Budiman Sudjatmiko, who led the committee that drafted the new law, said village heads are less likely to be corrupt since anything they buy with ill-gotten gains would quickly be noticed by neighbours.

"Any drastic change of lifestyle will easily be detected. This is different from a district head or mayor," he added.

In working on the law, Mr Budiman, 43, of the Indonesian Democratic Party - Struggle (PDI-P), says he was struck by the success of China's "richest village", Huaxi Village in Jiangsu province.

He hopes more Indonesian village dwellers can emulate how Huaxi's farmers took to manufacturing and trade.

The issue of rural development is a key plank for the party of former president Megawati Sukarnoputri.

When the Cambridge University-educated Mr Budiman first ran for Parliament in 2009, he promised to empower villages and bring about a more even distribution of income in Indonesia.

The push for a Village Law started to gain momentum in 2010, when thousands of village heads took to Jakarta's streets to protest against a lack of development funds.

As Mr Budiman seeks to be reelected at elections in April, he says he will help make sure the village law is implemented properly.

"We have seen many projects in villages that are not effective, because they were decided by people in Jakarta. This law will not only cut poverty, but create a new middle class from the grassroots."

They are looking to China's Huaxi for inspiration. Residents of Huaxi, which was founded in 1961, live in neatly-built identical homes and villas, and work in industries like iron, steel and textiles.

Up till now, rural areas across Indonesia received 11 trillion rupiah through a people empowerment fund managed by the home affairs ministry, and several trillions more from a number of other ministries for intermittent projects. But the distribution could be unpredictable.

The new law will see villages across the country able to tap on 104.6 trillion rupiah this year. How much a village gets depends on its population, location and total area.

"Villages represent 60 per cent of the population. Development spending for them should no longer be that small," Mr Budiman said.

Mr Suryo Hadiyanto, secretary of Towangsan village in Klaten regency, Central Java, told The Straits Times his village should get about 700 million rupiah this year. It has 4,000 residents but is located far from major provincial roads and cities.

Public policy expert Didi G. Suharto said the law could be both an opportunity as well as a challenge to villages.

The huge annual grants from Jakarta to villages must be matched with capable human resources in villages who can do financial management, planning and budgeting, he told the Solo Pos newspaper.

"The law gives a big opportunity to the villages. It will backfire if they cannot handle the job," he added.

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