ASEAN KEY DESTINATIONS
Jokowi seeks better governance in regional transfer
President Joko “Jokowi” Widodo is demanding that regional administrations improve their budget planning and execution due to the low spending of special allocation funds ( DAK ) last year.
Speaking in a limited meeting on the DAK, Jokowi underlined that development programs should be determined through an effective and well-targeted budgeting process.
"We need to improve some mechanisms. I urge further technical improvements on DAK governance, procedures and supervision," Jokowi said.
He pointed out the huge gap between the Rp10.4 trillion ( US$781.6 million ) DAK allocation from the central government and regional administrations’ budget realization of Rp 2.6 trillion. Of the Rp 1.9 trillion DAK allocation for health, regional administrations only spent Rp 619 billion. Of the Rp 6.1 trillion DAK allocation for agriculture, realization stood at only Rp 3.9 trillion.
The DAK aims to finance region-specific special activities that qualify for the national priority list.
The DAK has been set at Rp 85.43 trillion for this year, an increase of more than 45 percent from the Rp 58.8 trillion allocated in 2015.
The DAK itself is part of the larger regional transfer and village-funds component of the budget.
Jokowi said his administration wanted to eliminate the bad habit of planning the budget without specifically referring to priority programs and needs, therefore making it open to backdoor deals.
"The consideration of the DAK allocation in the future should be that money follows programs. The allocation should be jointly determined by the Finance Ministry, National Development Planning Agency ( Bappenas ) and other technical ministries related to these allocations," he went on.
The process, he continued, should also be transparent by publishing the fund allocation, from the preparatory stages until the execution stages.
"I do not want to see any things, such as backdoor deals and lobbies during DAK allocation budgeting in the future,” Jokowi said.
“To ensure that the DAK is right on target, I will require that any proposal on the use of funds must also include reports on previously realized DAK allocations," he said.
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