INTERGOVERNMENTAL TRANSFERS AND DECENTRALISATION IN INDONESIA

A fundamental restructuring of intergovernmental relations involving decentralisation and expanded autonomy for provincial and local governments is under way in Indonesia. This paper explores the intergovernmental financial system that preceded the new General Allocation Fund (DAU), with particular attention to the old Inpres development grants. Like Inpres, the DAU attempts to address national development objectives, and can be seen as a logical consequence of reform efforts in intergovernmental finance that began long before the demise of the New Order government in 1998. The use of earmarked Inpres grants enabled the central government to ensure that key sectors such as roads, public health and education received adequate attention throughout Indonesia's diverse regions. Local governments' experience with Inpres should help in implementation of the DAU, yet Law 25/1999which restructures fiscal relations between the various levels of governmentmay actually have increased local reliance on the central government.     

PROFESSOR REEKIE AND MARKETS: HEALTH CARE AND HIGHER EDUCATION

In this intriguing book Duncan Reekie goes to the very basis of the economic order. ¹ He discusses the views of the ancient Greek and later writers, and in doing so, moves outside the confines of modern economic analysis. One is reminded of what Schumpeter once wrote: the economist pursues the study of cause and effect until he finds the causal role of a variable to be non-economic. We must then "give place to other disciplines". ² Reekie's analysis reverses the order: it starts with the very general concept of the Natural Law in the works of ancient Greek and many subsequent writers, and then shows how they addressed questions that are still relevant today: questions on property and individual freedom.     

SMALL AND MEDIUM ENTERPRISE DYNAMICS IN INDONESIA

This paper discusses the development of small and medium enterprises (SMEs) in Indonesia before and during the crisis. It argues that SME productivity has risen substantially, at rates not far from those of larger firms. Case studies indicate that various mechanisms are at work, such as technology diffusion through foreign buyers and subcontracting. The prevalence of SME clusters suggests that they benefit small and medium enterprise development. SMEs are found to have been weathering the crisis better than larger companies, though many have been hit hard too. Being less reliant on formal markets and formal credit, SMEs are able to respond more quickly and flexibly than their larger counterparts to sudden shocks. The paper argues that, rather than providing direct assistance to smaller firms, government should concentrate on creating a business environment conducive to small and medium business growth, and promoting provision of business development services by the private sector.     

SCHOOLING IN INDONESIA: CRISIS-RELATED AND LONGER-TERM ISSUES

Though Indonesia had been making considerable progress in expanding its education system before the economic crisis broke in 1997, 30% of children were still failing to complete primary school,and the quality of education was far from satisfactory. The economic crisis threatened to lead to massive dropout, and social safety net programs were therefore introduced. This paper outlines issues facing primary and secondary education before and during the crisis, assesses the extent to which the social safety net programs have helped to limit dropout, and discusses longer-term issues in achieving the goal of nine years' universal basic education, raising educational quality and achieving increased equity of access.     

HUMAN RESOURCE MANAGEMENT IN STATE-OWNED AND PRIVATE ENTERPRISES IN INDONESIA

This paper compares the management of human resources (HRM) in two large, modern sector business organisations, one state-owned and the other privately owned, in the context of the rapidly deregulated Indonesian economy of the mid-1990s. The two organisations differed greatly in the extent to which HRM was able to underpin the efficient management of the organisation. Owing to fundamentally different approaches to recruitment, training and development, employee performance management and remuneration, the state-owned enterprise had far less effective HRM than its private sector counterpart, and could learn a great deal from how the privately owned organisation responded to the challenges presented by deregulation. The findings suggest that firm effectiveness depends significantly on the HRM function, and that the performance of state-owned enterprises tends to suffer as a result of interference in HRM processes by their government owners.     

2014济南故事——2014添丁又添喜

卡着12月的前奏,拖着2014的尾声,将济南这座城市的一年际遇,写尽其中,聊作盘点,自知不能尽收笔端,权当跟济南谈谈,探讨一下这一年的济南故事。2014,创城在泉城。土耳其诗人纳乔姆希格梅曾说：＂人的一生中有两样东西是永远不会忘记的,这就是母亲的面孔和城市的面貌。＂2014,济南创城路上,创出了一个干净整洁的城市面貌还创出一批母亲般温暖圣洁的卫生人面孔。     

ON-LENDING IN INDONESIA: PAST PERFORMANCE AND FUTURE PROSPECTS

On-lending to sub-national governments in Indonesia has a long and generally disappointing history. Among other noteworthy problems, an insufficient amount of funds has been channelled through the system vis-à-vis capital fi nancing needs, and loan repayments have proved poor. Aid agencies and government have recently invested substantial resources in attempts to improve the on-lending system; the resultant newly installed regulatory framework for sub-national borrowing is, however, unlikely to improve outcomes substantially. Developing sub-national government access to private capital markets would appear to constitute the way forward, although this will not come quickly or easily. A positive step in the right direction would be for government and aid agencies to embrace the anticipated change and work together to make the transition a successful one, rather than continue to tinker with reforms at the margin of a moribund system.     

印尼:浪漫无忧的国度

印度尼西亚,一直被记忆的编码书写成遥远的爪哇国…… 这是世界上最大的群岛国家,地理读物称之为千岛之国、火山之国.1.37万多个大小岛屿,象一群隔海水相望的邻居,横穿赤道,串珠式排开.     

THE PROMISE AND THE PERIL OF MICROFINANCE INSTITUTIONS IN INDONESIA

After the 1997 East Asian crisis, central banks throughout the region tried to reduce the risk of future bank failures by promulgating regulatory reforms. The results in Indonesia have been to concentrate rather than mitigate banking risks, and to decrease the access of low-income households and enterprises to formal financial services, especially in rural areas. The most severe casualties of the ‘reforms’ have been local government-owned micro finance institutions. In the provinces where these institutions have functioned best, they have addressed a market failure by extending coverage to areas not served by conventional financial institutions. Understanding the past performance and potential for replication of these success stories continues to be important because of the substantial gaps that remain in the access of rural Indonesian households and micro enterprises to fi nancial services.     

YOUTH UNEMPLOYMENT,FIRM SIZE AND RESERVATION WAGES IN SOUTH AFRICA

The level of youth unemployment in South Africa is much higher than in comparator countries. We investigate whether one of the reasons may be that the wages young people want or need are above those that they could reasonably expect to earn given their characteristics. Unlike previous work on the relationship between reservation wages and unemployment we differentiate between wages in different sizes of firms. Larger firms pay more and thus, even if reservation wages are similar to average predicted wages, they may be above the wages that young people could expect to earn in smaller firms. We find that this is the case.     

VILLAGE GOVERNMENT AND RURAL DEVELOPMENT IN INDONESIA: THE NEW DEMOCRATIC FRAMEWORK

The political reforms that began in Indonesia in 1998 have created new opportunities for a revised relationship between state and community, replacing the New Order's centralistic and uniform framework with local-level institutions that are strong and responsive. This paper presents the new legal framework for the democratisation of local-level politics and village institutions. Representative councils have been elected in all Indonesian villages, and the village head is no longer the sole authority in the community. Village governments are provided with far-reaching autonomy and do not need the approval of higher authorities to take decisions and implement policies. However, decentralisation and democratisation are necessary but not sufficient preconditions for developing the countryside and alleviating poverty. An active government and civil society engagement must ensure that regulations are not distorted during implementation, and that ordinary people are included in public policy making and local governance.