The Government of Indonesia has increasingly focused on addressing the country's rising inequality. The two-pronged approach aims at improving the quality of village spending and service delivery and on better understanding how fiscal transfers affect development at the local level.
Law No.6/2014 on Village or the Village Law substantially increases the total value of government fiscal transfers from US$4 billion in 2015 to an estimated US$12 billion in 2018 to 74,954 villages across the archipelago. Despite previous spending increases in priority sectors, Indonesia's performance against key development indicators remains below that of many countries at similar or lower level of economic development.
Institutionalizing good governance principles of participatory and inclusive practices in village government system the Village Law PASA supports multi-level of governments to assess and improve the effectiveness of annual fiscal transfers to villages, strengthening fiduciary systems, and institutionalizing PNPM's participatory mechanisms and practices into long-term reforms of the legal and regulatory frameworks for local governments' core systems.
The overall objective of the Village Law PASA is to support government efforts to ensure accountable village governance and participatory village development. The program delivers three main types of support:
The program provides analytical and technical support to Directorate General of Fiscal Balance of Ministry of Finance, The National Development Planning Agency (Bappenas), Ministry of Home Affairs, Coordinating Ministry of Human Development and Cultural Affairs, Ministry of Villages, Development of Disadvantaged Regions and Transmigration, and other stakeholders.
The Village Law PASA Program is organized around four programmatic pillars:
Indonesia’s Village Financial Management System helps ensure that all stages of village development including planning, reporting and monitoring are effective and transparent. For years, village governments created budgets and financial reports, and managed accounts using MS-Excel or other applications that were not standardized.
To overcome this challenge, the Indonesian Government, through the Development Finance Comptroller (BPKP) developed Siskeudes or Sistem Keuangan Desa (Village Financial System) to help villages and district/city governments plan, report on and monitor village development. Launched in 2015, Siskeudes had been used in 60% of Indonesian villages as of mid-2018.
Find out more about Siskeudes here.
In the village of Loloan, in North Lombok, the village government has used village funds to revitalize housing for indigenous people in two hamlets, Tanah Petak Daya and Lobang Kodek. By providing these funds, the village government aims to improve the quality of life of members of the indigenous community.
Two years ago, members of the community in the village of Barabali, Central Lombok, West Nusa Tenggara, had little opportunity to communicate directly with village government officials. In theory, they could submit their opinions, suggestions, recommendations and criticisms to their hamlet chief, who promised to pass these on to higher-level members of the village government. However, there was usually no direct feedback on this input, so the people had no idea whether it had any impact on how village programs were implemented or whether they had taken their needs into account.
However, with recent developments in technology, some village governments, such as in Barabali, have started to use the Internet to increase transparency and participation by informing the community about village development programs and receiving direct input from citizens. Under the supervision of the village head, Ki Agus Azhar, the Barabali village government has set up a website and ocial media account to enable community members to access information regarding village development programs, to ask questions about these programs, and to submit suggestions and complaints. The village head himself responds directly to many of these inputs. This use of social media has played a powerful role in enabling the community and government agencies to supervise the use of village funds, and to ensure that they are utilized to meet the community’s needs
Building on this successful use of social media, the village government has developed a website that is managed by the village secretary, which contains information on how village funds have been spent; villagers from anywhere in the world can provide feedback. Residents can also use the site to print out official village administration letters at their convenience, including “business statement letters, letters of domicile and police reports”, according to the village secretary. However, since only around 30 percent of community members have access to the Internet through smart phones, the information is also disseminated in other ways, for example by posting it on community announcement boards.
Now that community members can interact directly with village government officials, they are gaining confidence that village government officials will respond to their inputs. As a result, they have become much more motivated and willing to participate in all matters related to village governance, both online and in meetings and face-to-face discussions. This has helped to ensure that the allocation of Village funding is fair and equitable – and is perceived to be so by all members of the community.
Despite the village server’s limited capacity, Barabali is continuing to implement additional measures to ensure open community access to information and “to increase the community’s sense of ownership of the website”, according to the village head. Barabali’s experience has inspired many other village governments throughout Indonesia to develop similar systems for their own communities.
In the village of Pejanggik, in Central Lombok, the village government has used village funds to pave a dirt road to provide access to the markets in all weather conditions for villagers in three hamlets.