The Role of Regional Government in Poverty Reduction in East Kalimantan, Indonesia

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The Role of Regional Government in Poverty Reduction in East Kalimantan, Indonesia The Role of Regional Government in Poverty Reduction in East Kalimantan, Indonesia Muhammad Ali BA (Indonesian Muslim University), MA (Victoria University) School of Social Science and Psychology Faculty of Arts, Education and Human Development Victoria University Submitted in fulfillment of the requirements of the Degree of Doctor of Philosophy March, 2013 ABSTRACT East Kalimantan is a province of paradox. It has considerable economic potential, measured in terms of abundant endowments of natural resources. And yet it lacks infrastructure and has poor human resources, factors which condemn much of the population to live in poverty. Regional autonomy, implemented since 2001, has provided more political power and fiscal capacity to the region, and therefore it has been expected to give more opportunity for regional governments to accelerate regional development and bring their people to greater prosperity. However, East Kalimantan still harbors high levels of poverty. This study examines the extent to which regional governments use their authority, greatly expanded under regional autonomy laws, to address poverty issues in the province. This research utilizes qualitative methodology and employs a case study approach. It involves 63 interview participants from senior regional government officials, members of regional councils and other local stakeholders, which were selected using a combination of “purposive and snowball” sampling. Other secondary data collected include regional government documents and publications. The thesis argues that regional autonomy has provided regional governments with more political and fiscal capacity and has increased the role of regional governments in developing the regions. However, this has not necessarily meant that regional governments have been successful in alleviating poverty. It is argued that the insignificant achievement in poverty reduction is heavily shaped by the inconsistency of the regional governments in implementing program priorities due to the conflicting interests among decision makers, the limited capacity and low commitment of the local bureaucrats and members of regional councils in managing administration and regional development programs, regional political instability, poor coordination between levels of government and wide spread corruption. i | P a g e STUDENT DECLARATION I, Muhammad Ali, declare that the PhD thesis entitled “The Role of Regional Government in Poverty Reduction in East Kalimantan, Indonesia” is no more than 100,000 words in length including quotes and exclusive of tables, figures, appendices, bibliography, references and footnotes. This thesis contains no material that has been submitted previously, in whole or in part, for the award of any other academic degree or diploma. Except where otherwise indicated, this thesis is my own work. Signature: Date: 19 March 2013 ii | P a g e ACKNOWLEDGEMENTS This chapter of my life has been an academic journey made possible with the assistance and involvement of many people. It is with my deepest gratitude that I thank them for their support and guidance. First and foremost, I would like to thank Dr. Richard Chauvel, my supervisor, for his constant, deep and sincere guidance, encouragement, patience, constructive comments and kindness. And for the confidence he instilled in me to be able to complete this project. The experience gained from him is an invaluable asset. I am most grateful to many members of staff in the Faculty of Arts, Education and Human Development and the Office for Postgraduate Research at Victoria University who have been marvelous in providing professional and administrative assistance. My cordial thanks also to Angela Rojter for her great help in providing writing assistance during thesis drafting. I also acknowledge Diane Brown for editing the thesis according to the Australian Standards for Editing Practice (Standards D and E). I would like also to express my heartfelt acknowledgement to the District Government of Paser for their support in giving me leave from duties to undergo this study. A special thanks to the Provincial Government of East Kalimantan and District Government of Paser and Kutai Kertanegara, for enabling me to conduct research in their areas. My special sincere thanks go to the people who have helped me in one way or another during my field work, particularly the 63 respondents who have willingly sacrificed their time to take part in this study. Your willingness to participate provided invaluable information. Without this information the thesis would not have been developed in this way. I would like to extend my appreciation to ALA/AusAID for the scholarship provided to fund the pursuit of this research degree. This study would not have become a reality without the scholarship from ALA/AusAID to sponsor me in my endeavor to pursue the PhD. My greatest thanks go to my late mum for her endless love and sacrifices. And her spirit has given me strength and patience to resist iii | P a g e difficulties in the journey of my life, as well as her special care and support since my childhood. Her love and unique expression cannot be covered, even if I could have given her this whole world. I wish to extend my deepest gratitude to my wife, Jumriah and my children, Agung, Vina and Rara for their continuous support, patience and love. And who always stand beside me and accompany me everywhere. They make me feel happy and fortunate – thanks to all of you. Above all, the greatest thanks to Almighty God, Allah SWT who saves me from uncontrollable and unaccountable situations in the past, nowadays and in the days ahead. Last, but not least, I would to express my heartfelt thanks to many others who have made a contribution to this study. Your invaluable contribution is highly appreciated. iv | P a g e DEDICATION I dedicate this thesis to the memory of my late mother, Sawiah, my wife, Jumriah and my lovely kids, Agung, Vina and Rara. You are everything to me. v | P a g e LIST OF PUBLICATIONS AND AWARDS Ali, Muhammad (2011) Decentralization and Poverty Reduction: The Case of Great Resources Province, East Kalimantan, Proceedings of Canadian South East Asian Studies Conference, Toronto, 14–16 October 2011. Ali, Muhammad (2011) Paradoks Kebijakan Otonomi Daerah dan Peningkatan Kesejahteraan Masyarakat: Kalimantan Timur Kaya Tapi Miskin/The Paradox of Regional Autonomy Policy and the Increase of East Kalimantan Community Welfare, Proceedings of Olimpiade Karya Tulis Inovatif, Paris, 6–8 October 2011. Ali, Muhammad and Mas’udi, Wawan (2012) ‘Paradoks Desentralisasi dan Kesejahteraan: Kalimantan Timur Kaya Tapi Miskin/The Paradox of Desentralization and Welfare: East Kalimantan is Rich but Poor’, Jurnal Desentralisasi 10 (1): 17 - 37 Runner-up in essay competition organized by Australian Indonesia Governance Research Partnerships, The Australian National University in 2009, with the essay titled “Decentralization and Poverty Reduction: Great Authority, Wealth and Poverty in East Kalimantan, Indonesia.” The essay can be accessed through http://www.aigrp.anu.edu.au/docs/ys/Essay_comp_2009/final/Essay_Submis sion_M%20Ali%20Hapsah.pdf vi | P a g e TABLE OF CONTENTS ABSTRACT ..................................................................................................... i STUDENT DECLARATION ............................................................................. ii ACKNOWLEDGEMENTS .............................................................................. iii DEDICATION ................................................................................................. v LIST OF PUBLICATIONS AND AWARDS ..................................................... vi TABLE OF CONTENTS ................................................................................ vii LIST OF FIGURES ......................................................................................... x LIST OF TABLES .......................................................................................... xii LIST OF BOXES .......................................................................................... xiii APPENDIXES .............................................................................................. xiv ABBREVIATIONS AND ACRONYMS ........................................................... xv MAPS ............................................................................................................ xx Map 1: Indonesia ........................................................................................... xx Map 2: East Kalimantan ................................................................................ xx CHAPTER 1 INTRODUCTION ...................................................................... 1 1.1 Background .............................................................................................. 1 1.2 Research Questions ................................................................................ 7 1.3 Significance of the Study ......................................................................... 8 1.4 Organization of the Thesis ....................................................................... 9 1.5 Decentralization and Government Structure in Indonesia ...................... 11 1.5.1 Background to Decentralization in Indonesia ........................... 11 1.5.2 Indonesia’s Government Structure ........................................... 17 CHAPTER 2 DECENTRALIZATION AND POVERTY REDUCTION: LITERATURE REVIEW ...............................................................................
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