Corruption watchdogs suspect money meant for local development is being spent on vote-buying instead. (Photo: Adek Berry, AFP)

Where are Indonesia's Regional Funds Going?

An investigation conducted by Indonesia Corruption Watch and the Asia Research Center has uncovered major points of concern regarding the allocation of money used to fund regional government expenditures.

Teten Masduki, secretary general of the ICW, said on Thursday the case study of two districts and one municipality raised fears that the allocations could be used for “money politics,” or vote-buying, in the lead-up to 246 individual regional elections in 2010.

The allocations, also known as DAU, are intended to be used for development programs.

“Allocation funds have enormous potential to be misused for political mobilization during and after elections to maintain support,” Teten said during a discussion in Jakarta on regional budget allocations from the central government.

A statement released by Teten, Dr . Ian Wilson and Luky Djani — both from Murdoch University in Western Australia — said the study of various districts revealed “widespread and deeply entrenched irregularities in development planning and budget allocations” distributed by Regional Development Planning Councils (Musrenbang).

These districts include Kota Bau-Bau in Southeast Sulawesi, Kabupaten Tabanan in Bali and Kota Bandung in West Java

The development planning councils, which are meant to address problems at the lower levels of communities and encourage public participation in determining government planning priorities, were set up under the 2004 National Development Planning Law.

In principle, according to the statement, the councils operate as forums where government and nongovernmental groups can identify, deliberate and reach a consensus on a district’s development agenda, as well as the allocation of budgets for community development, including basic infrastructure and village allocation funds.

However, the researchers found the consultative process was used locally in ways that “fundamentally undermine and subvert the principle of participation.”

The report said that “rather than acting as an interface between local stakeholders and government,” the process “has been used to consolidate informal patron-client networks with subsequent impacts on budget allocation outcomes.”

According to the report, there is evidence of budget allocations being used “as a means of dispensing favor to ensure political loyalty, and the exclusion of critical representative voices from the participatory process.”

Local nongovernmental organizations and journalists, who have questioned or exposed irregularities, have been subject to both intimidation and censure.

According to the report, the apparent ease with which entrenched interests have been able to manipulate the participatory forums raises more fundamental questions regarding the nature of public participation.