Policy Research
After over 30 years under a highly centralized national government, Indonesia decided to implement a policy of decentralization that became effective on January 1st, 2001. This paper examines the preparations that have been undertaken within the regions, some of the initial implementation measures, and some of the key problems that emerged during the process of decentralization as managed by regional governments.
This paper attempts to answer some questions about the financial capacity of local governments to implement regional autonomy. In the early stages of the implementation of autonomy, financial aspects have been crucial for every kabupaten and kota administration1.
In response to the financial crisis which struck Indonesia in mid-1997, the government of Indonesia, in cooperation with the World Bank, instituted a food support program called Operasi Pasar Khusus, or OPK. The OPK program was designed to provide first 10kg, and later 20kg, of rice per month to every poor family in Indonesia.
After more than three decades under a centralized national government, Indonesia decided to implement a new policy of regional autonomy that became effective on January 1st, 2001. This paper examines both the preparations for and the initial implementation of autonomy in the regions, as well as some of the challenges which have emerged during implementation.
In response to the economic, natural, and political crisis that enveloped Indonesia from August 1997 (beginning of depreciation) to May 1998 (Soeharto resignation), the new government announced support for a set of "safety net" (JPS) programs in the July 1998 budget.
