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North Regional Innovation Policy in the face of reduced Regional Fiscal Capacity after the end operational PT. Arun. LNG

Ferizaldi1, Muhammad Hasyem2

1,Public Administration Departement, Faculty of Sosial and Political Sciences, UniversitasMalikussaleh, ,

Email : [email protected]

Abstract

Through Law no. 11 of 2006 concerning the Government of Aceh. Aceh has very broad powers, especially in the area of fiscal decentralization, which allows the Aceh government to have greater discretion in maximizing its fiscal needs. The phenomenon that occurred in North Aceh is very paradoxical with the fact that the North Aceh Government experienced a very large budget deficit after the end of PT. Arun. LNG as a contributor to oil and gas revenue sharing. This study aims to find out what innovation policies are carried out by the North Aceh Government to overcome the budget deficit after the end of PT. Arun LNG. The results of the study show that various policies have been carried out by the North Aceh government but are still short-term in nature. So it can be concluded that the North Aceh Government does not have Social Accountability in implementing Aceh's Special Autonomy. In the Medium-Term Development Plan, a major policy that is substituted for income that will be lost after the end of the operations of PT. Arun.LNG so that the budget deficit can be overcome and the regional fiscal gap does not become negative.

Keyword :Inovation, Regional Fiskal, Government

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Introduction centralization of power. This was followed RyassRasyid said the regional by the enactment of Law no. 11 of 2006 autonomy policy which was launched in concerning the Government of Aceh. In Law 1999 was intended to strengthen the No. 11 of 2006 the authority of the Acehnese authority of local governments and government is greater in various encourage community independence in the matters including fiscal decentralization, regions. The powerlessness of the regions in political decentralization, cultural and developing policy initiatives has long been religious decentralization. maintained through a system designed in a Specifically in the field of fiscal centralized manner, with dependence on decentralization, the province of Aceh is development projects designed through the entitled to receive larger funds from the oil legality of Presidential Instructions and other and gas revenue-sharing sector, and to forms. ( Jazuli, 2007: xviii ) receive additional transfers other than So that with the regional autonomy general allocation funds and special policy, the region will grow and develop allocation funds, namely special autonomy according to the characteristics and potential funds. Oil and gas revenue sharing fund of each. The pattern of dependence with the according to UUPA No. 11 of 2006 central government will decrease along with concerning the Government of Aceh is 70: 30, the birth of regional innovation and 70 percent for the Province of Aceh and 30 creativity, which is driven by percent for the Government of Indonesia. regionalleaders. This is in line with Prof. Dr. ApridarMSi, said that the statement of Widjaya (2002:7) who also Aceh, in particular the government and said that through regional autonomy it is people of North Aceh Regency, may now or hoped that the regions will be more in the future enter a period of "distress", independent in determining all theiractivities following the end of PT Arun's operations in and the central government is expected not mid-October 2015. Sadly, the Aceh to be too active in regulating regions with a Government and the North Aceh Regency centralized pattern. Government are considered to have no Aceh Province in implementing preparations. -what "welcome" the cessation decentralization or regional autonomy of natural gas exploitation in the Arun field. policies is different from other provinces in Indonesia. With Law no. 18 of 2001 The blueprint should have been concerning Special Autonomy for Nanggroe prepared since the 1980s. However, the Aceh Darussalam as well as being a dignified North Aceh Regency Government is just effort for early conflict resolution in Aceh as sitting around waiting for the results every well as a new paradigm in reducing the year, ”, responding to PT Arun's “roll

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lapak”. The wealth and glory of the source of development and public services in Government and the people of Aceh, the region. Based on this phenomenon, in the especially North Aceh, is highly dependent task of this article, the author tries to discuss on the results of natural gas exploitation by the innovative policies carried out by the PT Arun since 1977. So, now the big question North Aceh government to replace lost that arises is "what do you want after Arun sources of revenue from the oil and gas goes out of business? " "In the future, revenue sharing sector. the North Aceh Regency Government should Literature review focus on the agriculturalsector to reduce Public policy poverty. Development priorities to Policies are often misinterpreted by reduce poverty must also be directed at some people, policies are often interpreted as sustainable economic development in rural something that violates procedures or is areas,” ( Serambi Indonesia, 17 January considered as an exception and so on which 2017 ) has a negative meaning. This negative The impact of the end of the interpretation is closely related to policies operation of PT. Arun LNG as a contributor that are interpreted by the public as partial, to oil and gas revenue-sharing for North or only interpreted according to Aceh, the North Aceh District stereotypes. Public policy consists of two Budget (APBK AUT) has a deficit. As for the words, namely "policy" and "public", things that the North Aceh Government has policies issued by the government with the done to overcome this is to apply for a authority it has, while public means the budget loanto the Ministry of Finance, the wider community or people who give article is that after the approval of the 2016 authority to the government. So the policy APBK, North Aceh did not meet the budget should be directed to carry out the authority of Rp110 billion. possessed in accordance with the will of the Quoting the opinion of Cohen and community for the common good. Peterson and the OECD (Mas'ud Said, The definition of public policy as

2005:25) they explain that regional autonomy mentioned by Thomas R. Dye (1995:2) " what can promote an efficient and creative government does, why they do it, and what government administration system, and the difference it makes" . Furthermore, OECD argues that regional autonomy can Peterson (2003:1030 ) states public policy increase the effectiveness of the public as government action to address some sector . So the North Aceh Government problems . The definition of public policy as should be innovative in producing policies expressed by Dye is still too vague, whatever that can maximize regional income as a the government does or does not do, this

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means that the silence of the government example the MPR - RI Decree means a policy that is carried out, it could be during the New Order. that the government's silence may be 2. Main Public Policy, namely the because it does not understand the problems legal aspect that translates the and problems of its people, but this Reference policy to be understanding is generally accepted as a implemented. For example, Laws or simple concept of public policy. Presidential Decrees. While Peterson describes it as a 3. Implementing Public Policy , government action to solve some problems. I namely the legal aspect that hope the definition is broader than transforms the main policies into Dye. While the key concepts of public policy principal and technical rules, for as described by Young and example the Decree of the Minister, Quinn (in Suharto, 2005:44) are as follows: Governor or Regent/Mayor. 1. Authorized Government action; According to Winarno (2007:32-34), 2. A Reaction to real world needs and the process of making public policy is a problems; complex process because it involves many 3. A goal-oriented set of actions; processes and variables that must be 4. A decision to do or not to do something; studied. Therefore, some political experts

5. A Justification made by one or more who are interested in studying public policy actors. divide the processes of public policy making Based on these key concepts, it can be into several stages. The stages of public concluded that public policy is only carried policy are as follows: out by the government with the power it has 1. Agenda Preparation Stage in resolving community problems to reach a Elected and appointed officials put final settlement,the policy itself is usually matters on the public agenda. Previously, comprehensive, meaning that it consists of these problems had the competence to be various actions that are structured as a included in the policy agenda. In the end, formal legality that is binding and can be several issues entered the policy agenda of measured. its success. the policy makers. At this stage a problem If translated in the context of the may not be touched at all, while other Unitary State of the Republic of Indonesia, problems are set to be the focus of public policies can be classified as: discussion, or there are also problems for 1. Public Policy as a Reference, namely certain reasons that are postponed for a long the highest legal aspect that time. regulates problems in general, for

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2. Policy Formulation Stage of the implementation of the policy has the Issues that have entered the policy support of the implementers (implementors) , agenda are then discussed by policy but others may be opposed by the makers. These problems are defined and executor. then the best solution is sought. The solution 5. Policy Evaluation Stage to this problem comes from various At this stage the policies that have alternatives or policy options (policy been implemented will be assessed or alternatives / policy options) . Similar to the evaluated, to see how far the policies made struggle for a problem to enter the policy have been able to solve the agenda, in the policy formulation stage each problem. Public policy is basically made to alternative competes to be selected as a achieve the desired impact. In this case, policy taken to solve the problem. At this solving the problems facing stage, each actor will "play" to propose the society. Therefore, the measures or criteria best solution to the problem. that become the basis for assessing whether 3. Policy Adoption Stage public policies have achieved the desired Of the many policy alternatives impact are determined. offered by policy makers, in the end one of Government Innovation the policy alternatives was adopted with the support of the legislative majority, consensus Rogers (2003) as quoted by Budi between the directors of the institution or Prayitno (2016) describes that innovation is an idea, idea, action/practice or object that is judicial decisions. realized and as something new by 4. Policy Implementation Phase individuals and groups that are adopted in A policy program will only become their environment. Based on these two ideas, elite records, if the program is not the meaning of innovation is defined as implemented. Therefore, the policy program system renewal that can be adopted into the decisions that have been taken as alternative environment. In this case, the reform in solutions to the problem must be question is a housing policy that focuses on implemented, that is, carried out by reforming policies that are considered failed. administrative bodies and government Even the meaning of innovation is also agencies at lower levels. The policies that considered as the basis for economic have been taken are implemented by development and the like in developing administrative units that mobilize financial countries. and human resources. At this stage Furthermore, Peter Drucker (1986), of implementation, various argues that every organization needs a core competence (core competence). With interests will compete with each other. Some innovation will encourage organizational

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growth, increase future success, and is the Research methods driver that allows organizations to survive The selection of the research vulnerabilities (viability). method was carried out by looking at the Drucker (1986) also stated that characteristics of the research, to conduct specifically, systematic innovation means research on poverty alleviation in the district controlling the seven sources of innovation opportunities. The first four sources are of North Aceh, it was deemed appropriate to within the organization, both business and use an exploratory descriptive qualitative community service institutions, or within the approach. Explorative descriptive research organization. Furthermore, the second three method aims to describe the state of a sources are changes that occur outside the particular phenomenon. In this study was organization, or external aspects. not intended to test specific hypotheses not Furthermore, there are five only describe what the presence of a variable principles that can foster innovation from symptoms or specific within the individual or personal or circumstances. (Arikunto, 2002:243). So that organization. The five principles in question the researcher does not establish a include: hypothesis, but only establishes a symptom 1. Purposeful and systematic or phenomenon. The symptom or innovation, starting with analyzing phenomenon in question is the phenomenon the sources of innovative of poverty in North Aceh district which is opportunities. 2. Conceptual and perceptual detailed in the focus of the research. innovation. The must for innovation is to go out to see, ask and listen, Research sites pay attention to customers, users, This research was conducted in learn their expectations, assess their North Aceh District, the locus of which was needs. at the North Aceh District Secretariat and the 3. To be effective an innovation must North Aceh Bapedda be simple and must be focused. Office. The informants are the Deputy 4. Effective innovation starts small, at Regent of North Aceh, the Regional Secretary first it requires minimal funds, and the Secretary of the Bapedda of North limited people, and only a small Aceh Regency. and limited market.

5. A successful innovation must lead Data collection technique to leadership in a given environment. According to Burhan (2008: 107) the most independent data collection methods in qualitative research on all data collection

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have been anticipated well in advance, this methods and data analysis techniques are in- indicates that the capacity of the Regional depth interviews, participatory observation, Government in carrying out its functions is and documentary materials. very poor. This is in line with the view of

Peter Drucker (1986) who argues that every Data Analysis Techniques organization needs a core competence, Planned in this study d ata were namely an innovation that is planned to analyzed qualitatively by using a model of solve various regional problems. Innovation descriptive analys . Glaser and Straus (Faisal, will drive organizational growth, increase 1999: 198) suggested that descriptive analysis future success, and is the engine that allows through the following procedures: organizations to survive vulnerabilities 1. Descriptive analysis by developing (viability). categories consisting of the results of in- So in the preparation of the depth interviews and the sources according RPJMD ( Regional Medium-Term to the indicators that exist in each variable Development Plan ) must go through a and these categories are obtained in careful assessment through the preparation accordance with the interview guidelines of comprehensive policies through regional that have been prepared. development planning. In line with the 2. The interpretation of the results of the opinion of Winarno (2007:32-34) which descriptive analysis based on the theory - the mentions the stages of complex policy- theory of the corresponding de ngan making that involve many processes and research variables that must be studied. The above must start from the stage Results and Discussion of preparing the regional government's Local government innovation in the financial policy agenda in the RKPD or era of regional autonomy, is something that Strategic Plan SKPD must schedule several must always be considered by local alternative policies to replace lost income in governments to increase the capacity of local the 2016 and 2017 APBK and so on. Which governments in realizing political and social will be adopted in the APBK to be accountability to advance their regions in the implemented in DPA-SKPD as a strategic context of strengthening local policy, considering the amount of lost government. With regard to regional income is very large, reaching more than 75 financial policies, it is very important to billion, this will have an impact on regional create a positive fiscal gap. financial performance.

The problem of the budget deficit in Regional financial performance seen the North Aceh Regency Government should from the revenue side (fiscal availability) is

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the ability of the region that is available province or district/city does not have purely from PAD. The ratio of PAD to Total sufficient budget, it is justified to apply for a Regional Revenue shows the fiscal loan to the Ministry of Finance. independence of a region. The higher the To overcome the problems contribution of PAD, the higher the ability of surrounding the reduction of oil and gas local governments to implement revenue-sharing funds after the end of the decentralization. The formulation of the existence of PT. Arun. LNG. The North Aceh degree of Fiscal Decentralization proposed government has implemented various by Halim (2008:262), is to compare the innovative policies, including applying for percentage of PAD and total regional loans and efforts to restructure the revenues, so that to maximize regional government bureaucracy for budget financial performance, innovative and actual efficiency. The District Government policies are needed. (Pemkab) of North Aceh removed 38 echelon IV positions in the new work system The actual policies carried out by organization structure (SOTK), which had the North Aceh government at this time are been proposed to the Ministry of Home through the submission of regional debt and Affairs (Kemendagri). The echelon IV streamlining the organizational structure for positions are at the level of subsection head budget efficiency. After an evaluation of the (kasubbag) and section head (kasi). 2016 North Aceh APBK, a number of programs that have been proposed by the The results of the SOTK downsizing executive and legislature, it turns out that were conveyed by the Acting Secretary (Plt) there is an insufficient budget of Rp. 110 of the North Aceh Regional Secretariat, billion from the approved budget of more Abdul Aziz MH, who stated that currently than Rp . 2.2 trillion. "To meet the program there are 900 positions in 30 budget that has been proposed by the offices/agencies/offices within the North executive and legislature, the solution is to Aceh Regency Government starting from apply for a loan. This step taken by the Echelon II, III, and IV. Inthe new SOTK, 862

North Aceh Government is for the benefit of positions are proposed. This means that the Acehnese people, so that the program there is a reduction of 38 positions. The that has been proposed in the Development establishment of the new SOTK was carried Planning Deliberation (Musrenbang) can be out based on Government Regulation No. implemented as expected. Public. The 18/2016. The goal is to improve budget Director General of Finance has agreed, but efficiency. With the reduction of the there are a number of documents that must organizational structure be corrected . Under the regulations, if the automatically will save the budget. Because

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there are 38 people who no longer need to be Oil and Gas Revenue Sharing component to paid allowances. “Nil”. This fact proves that the North Aceh Government does not have Social The policy is not yet complete in Accountability in implementing Aceh's solving problems and is less innovative, the Special Autonomy. The RPJM should have North Aceh district government should planned a major policy that is a substitution think about analyzing its financial ratios to of income that will be lost after the end of ensure sufficient fiscal gaps in carrying out PT. Arun. LNG so that the budget deficit can development and public services. In this be overcome. regard, Badrudin in Aris (2017) states that the results of the analysis of the financial References ratios of a regional budget can be used as a Halim, Abdul, 2008, AkuntansiKeuangan benchmark in order to: a) Assess regional Daerah, Edisi 3, financial independence in financing the PenerbitSalembaEmpat, Jakarta implementation of regional autonomy; b) Thomas R. Dye, 1995, Understanding Public Policy, Prentise Hall, USA Measuring effectiveness and efficiency in realizing regional income; c) Measuring the KebijakanPublik; 2002, Teoridan Proses (Edisirevisi) Penulis : Budi extent to which local government activities Winarno. Media Presindo spend local revenues; d) Measuring the Yogyakarta contribution of each source of income in the Budi Prayitno, dkk , 2016. SkemaInovatifPemenuhanKesejaht formation of regional income; and e) eraanAtasPapan.JurnalKawistara Observing the growth/development of No. 1 Vol 6.UGM. Yogyakarta income and expenditure acquisition during a Drucker, Peter., 1986. Innovation andEntrepreneurship. certain period of time. Thus, social GramediaPustakaUtama, Jakarta accountability is needed as a form of long- Juwaini Jazuli, 2007, Otonomi Sepenuh term innovation in regional financial Hati, Pokok- pokok pikiran untuk management. perbaikan implementasi otonomi daerah, AL-I’Tishom, Jakarta Recommendation RanteAris, et al, 2017. The regional debt policy and AnalisisKemandirianKeuangan Daerah, JurnalInovasi streamlining of the organizational structure Vol.13 No.2 Tahun as implemented by the North Aceh 2017.UniversitasMulawarman. Diaksesdari government are insignificant short-term http://journal.feb.unmul.ac.id/in dex.php/INOVASI innovations, meaning that the budget deficit will always cover the North Aceh APBK, and Said Mas’ud, 2005,Arah Baru Otonomi Daerah di Indonesia, UMM Pres, Malang. this is evident from the North Aceh Perbub No. 37 of 2017 dated 23 February 2017 in the

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Widjaja, 2002, Otonomi Daerah dan Daerah http://www.acehtrend.co/defisit-anggaran- Otonom, PT. RajaGrafindo aceh-utara-ajukan-pinjaman-ke- PersadaJakarta departemen-keuangan/3 Maret 2016.

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