Special autonomy status of Aceh

The decentralisation process in Indonesia resulted in the establishment of autonomous regions where most of the technical and financial responsibilities are transferred from central government to the regional government. Accordingly, most of the funds and budget allocation that were previously managed by the central government in the centralised system have now been transferred to the regional governments.

Aceh Province, however, has a special autonomy status from the central government. In 1999, Aceh was given a special region status which gives it greater authority with regard to religious, customary and educational matters, as well as in the role of Ulama (Moslem clerics) in the decision-making processes (Law, 1999). In 2001, the special regional status of Aceh Province was followed by the provision of special autonomy status through Law no. 18/2001. The special status provides Aceh’s annual budget with a greater amount of fiscal balance and additional revenue sharing from oil and gas production.

96 2.5.6.1 Aceh Special Fund

Due to the special autonomy status that was given in 2001 (Law, 2001), Aceh receives two additional sources of income namely; additional revenue sharing of oil and gas (Dana Tambahan Migas) and special autonomy fund (hereafter called as OTSUS fund). These funds were assigned to Aceh for a 20-year period, starting from 2008.

2.5.6.1.1 Additional Revenue Sharing for Oil and Gas

According to Law no 33/2004 (Law, 2004b), the regional governments in Indonesia receive a proportion of revenue generated from the oil and gas production. The proportion of revenue sharing received by the regional governments is 15.5% of the net oil production revenues and 30.5% of the net gas production revenues produced in the respective regions. However, due to the special autonomy status, Aceh also receives an additional amount of revenue sharing from oil and gas production, in addition to the regular revenue sharing mentioned above. The proportion of the additional revenue sharing varies over a designated period.

Based on the Law no 18/2001 (Law, 2001), the proportion of additional revenue sharing for oil and gas received by Aceh province is as follows:

1. 55% for oil and 40% for gas, for eight years until 2009. 2. 35% for oil and 20% for gas (2009 onwards)

This allocation is given to the regional governments of Aceh, which includes the provincial and local governments. Distribution of the additional revenue sharing between provincial and local governments is stipulated in Clause 5 of Qanun no 2/2008 and is summarized in Table 2.14.

Table 2.14 – Distribution of Additional Revenue Sharing of Oil and Gas

No Receiver Allocation Remarks

1 Provincial

Government

40%

2 Producing districts 25% Districts that produce oil/ gas 3 Non-Producing

districts

35% 50% is equally distributed to all districts and 50% is shared proportionately according to the set of indicators

Total 100%

97 According to Qanun no 2/2008 (2008), a minimum of 30% of the total fund must be allocated to the education sector. Accordingly, use of the fund for other development programs and activities may not exceed 70%. However, even though the fund is distributed to all districts in Aceh, it is not given in the form of budget transfer, but in the form of budget allocation to fund the approved projects and activities previously requested by the relevant districts. The projects and activities are also carried by the provincial government for the districts, and hence the fund is included in the provincial budget, APBA.

2.5.6.1.2 Special Autonomy Fund (OTSUS fund)

OTSUS fund is fund allocation included in the national budget APBN instead of the provincial budget APBA or the district budget APBK. However, this fund is managed by the government of Aceh Province as the representative of the national government at the regional level. The OTSUS fund is allocated to fund the development projects, particularly for the development and the maintenance of infrastructure and the economic, poverty reduction, education, social and health sectors. The Otsus fund allocation worth around Rp 3.5 trillion (~£175 million) in 2008 to Rp 6.2 trillion (~£310 million) in 2013 per annum.

Based on Qanun no 2/2008, the use of OTSUS fund is distributed as follows:

 Maximum 40% is allocated for development at Provincial level.

 Minimum 60% is allocated for development at the district level, distributed to all districts based on a formula stipulated by the governor according to the number of people, areas, GRDP, Human Development Index, Construction Expensiveness Index (IKK) and other relevant indicators.

Table 2.15 – Distribution of OTSUS fund

No Receiver Allocation Remarks

1 Provincial Government Max 40%

2 Districts governments Max 60% The fund is shared proportionately

according to certain indicators, such as number of people, areas, GRDP, HDI and other relevant indicators. Total 100%

98 Similar to the additional revenue sharing of oil and gas production, even though the fund is distributed to all districts in Aceh, it is not given in the form of budget transfer. Instead, it is distributed in the form of a budget allocation to fund projects and activities requested by the relevant districts. The agreed projects and activities will also be carried out by the provincial government, as the representative of national government, for the districts. Hence, this fund is included in the national budget APBN and not in the regional budget APBA or APBK.

The above sections have provided the context of the Indonesian government system, as well as the current position of the disaster management and road maintenance efforts. The context of Aceh as the focus area of the study has also been discussed in detail. As the Aceh province experienced a conflict of more than 30 years prior to the peace agreement in 2005 between the Free Aceh Movement (GAM) and the Government of Indonesia (GoI), it is imperative to have an overview of the conflict in Aceh as it is argued to have affected the reconstruction and the maintenance of the road infrastructure in the province. Accordingly, the discussion progresses to the following chapters to the topic of conflict in Aceh.