The village fund is a pet project launched by the Ministry for Villages, Underdeveloped Regions, and Transmigration, headed by Marwan Jafar, worth of trillions of rupiah intended on developing 73,000 villages in Indonesia. (Antara Photo/Adul)

Indonesian Ministry Stand-Off Leaves Villages Without Crucial Funding


JANUARY 13, 2015

Jakarta. Intervention from President Joko Widodo is needed to a resolve dispute between two ministries fighting over control of annual village funding to the tune of Rp 20 trillion ($1.5 billion).

The funds are mandated by the Village Law, passed by the House of Representatives last year, which allows all villages across the archipelago to receive Rp 1 billion assistance from the central government to develop their economies and infrastructure.

However, the law does not stipulate who controls the disbursement with both the Ministry of Home Affairs and the Ministry of Village, Underdeveloped Regions and Transmigration laying claim to authority over the funds.

“Admittedly, the overlapping claims between the two institutions [over the funds] is not something that can be resolved easily,” Indonesian Institute of Sciences (LIPI) rural economics expert Anas Saidi said.

He said only the president has the power to resolve the dispute.

“Whichever ministry that is assigned to manage the funds should have the power and authority to ensure that the funds are spent transparently and effectively,” Anas said. “The overseeing ministry should conduct a comprehensive study on what each village requires to stimulate economic growth, monitor use and effectiveness.”

Both ministries have failed to show  they are up to the task, the LIPI expert said.

Anas said even the now defunct National Program for Community Empowerment (PNPM), which was controlled by its own dedicated body, failed to perform, reducing poverty levels by only 0.88 percent despite trillions of rupiah in soft loans disbursed to micro-entrepreneurs, fishermen and farmers since it was founded in 2007.

The PNPM program ended this year and was replaced with the direct village funding.

The government has earmarked Rp 20 trillion for the implementation of the Village Law, which will be distributed to 73,000 villages across Indonesia this year.

Anas said the issue had become political.

The Home Affairs Ministry is headed by Tjahjo Kumolo, a senior politician from the Indonesian Democratic Party of Struggle (PDI-P), while the village ministry is headed by Marwan Jafar of the National Awakening Party (PKB).

Saldi Isra, a state administrative law expert at the Andalas University in West Sumatra, said politics aside, the better- staffed Home Affairs Ministry should be the one managing the funds.

The Home Affairs Ministry, which monitors all levels of government, would allow transparency and accountability.

“If the Ministry of Village Affairs should manage [the funds], the villages can do whatever they want,” he said.

But putting the funds under the Home Affairs Ministry would allow provincial, district and sub district governments to monitor how the funds are used, he said.

The Ministry of Village Affairs could be given the authority to formulate programs suited for each village, but the funds would still be managed by the Home Affairs Ministry.

“Everyone must sit together. All levels of government must ensure that villages are developed as much as possible,” he said.

Better planning

Arie Sujito, a political expert from Yogyakarta’s Gajah Mada University said that while the central government sorts out the dispute, village chiefs and other local leaders must also prepare themselves.

“They need to train and educate the villagers as well as local officials to create better planning, provide better services and create transparent and accountable fund and asset management,” he said.

Arie said involving local officials should make the scheme to be a more effective system than the PNPM.

The PNPM, he said, only focused on individuals and groups while the new scheme would allow village officials to create strategic programs to stimulate growth.

“The Village Law can adopt the PNPM’s participative approach but the implementation is still left to villagers and officials,” he said.

Joko has been criticized for dissolving the PNPM, which left some 20,000 PNPM facilitators without jobs.

Although favoring the new scheme, Arie said Joko should have created a road map before dissolving the PNPM.

Yuni Satia Rahayu, vice district head of Sleman, Yogyakarta, said that there are now hundreds of PNPM facilitators who need to be reassigned.

“We don’t know what to do about them,” she said. “It is a shame. Because these facilitators are people with skills to empower locals.”

Yuni said the central government must decide whether they are planning to use these facilitators in the new scheme or not.

“We have not received any confirmation [about the issue] so far,” she said.

Districts across Indonesia are also waiting for resolution before they draft a local regulation on the mechanism of the funds.

The regulations will include anything from how villages propose programs, to how the funds are disbursed, managed and monitored to reporting and evaluation.

Gili Yoseph, secretary of the East Nusa Tenggara’s Village Development Agency, said the dispute had stopped the central government from providing technical details about the program.

“Considering that to this day there are no clear rules, such funds will be prone for misuse for certain political agendas,” he said.

Gili said that the province has already created plans for how the funds will be used including on health, education, irrigation, farming and agriculture.

The province has also proposed reporting on the funds every three months.

Danang Kristiawan, the village chief of Tirtomartani in Sleman, said the central government should also create a program to inform villagers about the new scheme.

People in his village, he said, have been pounding on his door demanding a piece of the Rp 1 billion.

“A lot of people think that the Rp 1 billion fund is some kind of cash assistance for villagers. It’s not like that at all. We must create a program first. So the funds are not disbursed instantly. A lot of people got it wrong,” he said.

Village Affairs Minister Marwan Jafar said the funds had also created another problem: fraud.

According to him, dozens of village chiefs in South Cianjur, West Java, were recently duped by a couple who claimed to be close associates of the president, saying that they can expedite the funds’ disbursement.

“Since the village funds are introduced I have expressed my concerns about the possibility of such scams,” he said adding that the alleged fraudsters have collected Rp 15 million from each village chief,” he said. “I have reminded all village chiefs not to be tempted by such fraudulent scheme. I hope there are no more cases like this in other villages.”