Decentralization of Infrastructure – Some Lessons from Water Resources Development and

Management in Indonesia

Big Picture

• Water Resources management – the Bank’s 1993 Policy – the Dublin Principles 93

• Indonesia has adopted Agenda 21, PJPII strongly pro-decentralization but from a spatial planning perspective

Dublin Principles

• the effective management of water resources demands a holistic approach linking social and economic development with protection of natural ecosystems, including land and water linkages across catchment areas or groundwater aquifers

• water development and management should be based on a participatory approach involving users, planners, and policymakers at all levels (subsidiarity);

• water has an economic value in all its competing uses and should be recognized as an economic good.

What the OP 4.07 says about decentralization

“ Decentralizing water service delivery, involving users in planning and managing water projects, and encouraging stakeholders to contribute to policy formulation. The Bank recognizes that a variety of organizations—private firms, financially autonomous entities, and community organizations—may contribute to decentralizing water delivery functions. Thus it supports projects that introduce different forms of decentralized management, focusing on the division of responsibilities among the public and private entities involved.”

River Basin Planning – a Panacea?

• Decentralization should be pursued as much as possible in order to bring river basin management as close as possible to the individual citizens and facilitate local variation in response to differing local conditions and preferences.

• Decentralization is also possible in case of tasks with a supra-local scope if the decentralized governments concerned co-operate (e.g. in a river basin commission) or if they are supervised by a higher-level government body.

• The decentralization process should be transparent, phased and planned.

Brief Background about Indonesia

• Geography

• Administration

• What is the Water Sector (Irrigation/M&I/Rural)

• What is the World Bank’s Water Policy

Maps

Typical River Basin

What goes up must come down

Administration

• Unitary State (Dutch Law – medwebeb, dutch terms)

• Highly centralized bureaucracy Provinces – TKI Governor

• Kabupaten TKII Bupati• Kecamatan (sub-district) Camat• Lurahan/Desa (Pak Lurah/Kepala Desa)• RW and RT

How Water Resources have been developed in the past

• APBN – the national budget implemented by the sectoral ministries

• Projects and DIPs – either domestic funds or aid/loans

• APBD – the regional budgets at Province and Kabupaten

• Deconcentrated and Limited Co-Administration• Pembinaan (Guidance/Leadership), Pengawasan

(Supervision) and Pengandalian (Control)

Operation & Maintenance

• Approached as an engineering exercise to be provided by province

• Center not interested in irrigation per se• O&M done badly if at all – preference for

contracts, employment, underfunded • Bank/ADB efforts to ‘solve’ O&M have been an

abject failure due to misunderstanding of decentralization and preference for construction.

Stories - experience from trials in 7 Autonomous Kabupaten

Central Java

East Java

West Java

Lombok

West Sumatra

North Sumatera

South Sulawesi

Some Lessons and Observations from the Indonesian Experience

Present Strategic Imperatives

• Urbanization • Commercialization and diversification of

agriculture• Drought and El Nino• Need to establish investment mechanism

based on demand, creditworthiness, hard budget

• Civil Service Reform

Decentralization v Desentralisasi

• It is not simply a re-assignment of responsibilities of government to different levels

• Indonesia unfamiliar with bottom-up initiatives

• Need to tolerate uncertainties and ambiguities

Decentralization a Process – History Matters

• Fragile basis of nationalism

• One size fits all

• Laws are not the only issue

• A lot has been done – not finished

Skills and Capacity

• There will be a mismatch of skills

• What is needed will not be clear until demand is expressed

• Present genesis of projects are part of the problem not the solution

Institutions

• Menu not the one correct way

• Build on different traditional institutions

• Do not allow arbitrary definitions and turf to dictate institutional form

• River Basin /Water Authority a new animal

• User Sectors

Aid Agencies and International Development

• Agencies need to have projects focussed on regions

• Sub Sovereign Debt

• Province must have a more meaningful role : especially in finance (BPDs), environment, WRM