The regional heads run various strategies commonly used by Chief Executive Officer (CEO) to explore regional potential and solve social problems in their regions. This effort needs to be carried out in optimizing the Regional Budget (APBD) in order to achieve development targets in the region. The reason is that low regional budget must be used for many purposes.
According to the Mayor of Sungai Penuh, Jambi, Asafri Jaya Bakri, the low regional budget has forced many regional heads to explore their potential by acting like CEOs in their regions. They must focus on fixing their problems one step at a time and highlight the advantages of their regions.
“That is what I did, because our budget is the smallest in Jambi,” he said when attending the awarding ceremony of Indeks Kelola 2018 held by Katadata, along with JariUngu, in Jakarta on Wednesday (11/28) night.
In the regional budget for Sungai Penuh at the beginning of 2018, the city's income was only Rp 714 billion, while its spending was set at Rp 796.1 billion. Therefore, changes in spending need to be done and intended for things that are more needed. According to Asafri, he initially focused on using the budget to fix the upstream economy from road infrastructure to irrigation. He then focused on developing the downstream economy, including markets to stimulate the economic activities of the residents in his region.
The step is taken so that Sungai Penuh City can only focus on trade and services. In contrast to other regions in Jambi, this city with its population of 103,000 people does not have natural resources such as oil, palm, and coal. “I give understanding to our residents about the potential that exists in Sungai Penuh. Do not dream of anything else,” he said.
By focusing on those matters, the regional government managed to reap positive results. Asafri claimed the ratio of employers to the population in Sungai Penuh reached 8.1 percent, which is above the national average of 3 percent. In addition, the number of poor people in Sungai Penuh was only 2.7 percent of the total population. “It is the smallest in Jambi province,” he said.
Other regions have different conditions. The poverty rate in West Lombok Regency (West Nusa Tenggara) is still 15.7 percent. However, West Lombok Regent Fauzan Khalid did not give up easily. He asked the poor people in his region, 70 percent of whom are farmers, to form groups. The group usually consists of farmers’ wives and aims to create a small industry supporting the region’s tourism. “In every meeting [of the regional government], we are also not allowed to buy food from outside our region. We have to buy it from the [group of] farmers’ wives,” he said.
Nevertheless, Fauzan is still proud of the significant decline in the number of stunting children in his region over the past 10 years. According to him, this happened because West Lombok District continued to focus on improving the health sector by jointly overcoming the problem of early marriage, which is the root of the stunting problem in the region. “Stunting rate in 2018 reached 28 percent, below the national average, even though it was 49 percent in 2008,” he said.
In disseminating the impact of early marriage, the Regional Agency of Family Planning and Women Empowerment was assisted by the Health Agency. “Budget is important, but the involvement of all segments of society is also influential,” he said.
Deputy for the Study and Management of Strategic Economic Issues at the Office of Presidential Staff (KSP) Denni Puspa Purbasari acknowledged the importance of preparation of development strategies by regional heads, so they can have full responsibility over the targets and goals achieved with the current concept of money follow program. “The only thing that matters now is how these regional CEOs get political back-up, and also supported by the DPRD, so the program can be implemented in the SPBD,” Denni said.
Director General of Regional Finance Development Syarifuddin Udu said there are three benchmarks in assessing the effectiveness of regional budget management: budget absorption, outputs, and outcomes. However, one of the important goals to be achieved is the outcome as a reflection of the success of regional development. Unfortunately, many regions are still limited to only pursuing physical results.
In the 2018 State Budget (APBN), the allocation for regional budget reached Rp 1,154 trillion. Of the total funds, the province only received Rp 350 trillion, while regencies and municipalities received Rp 850 trillion. Regarding the allocation, he said some regions have not allocated the 20-percent budget for education in their regions. “Some even only set aside 13 percent,” he said.
Sungai Penuh City and West Lombok Regency were two regions receiving the Indeks Kelola award this year. Teaching staff at the Gadjah Mada University’s Faculty of Economics and Business Gumilang Aryo Sahadewo, who co-designed the index, said the assessment was conducted based on three things.
First is administrative assessment, such as the opinion of the Supreme Audit Agency (BPK). Second is quantitative assessment, such as budget allocation. Third is qualitative assessment, in which innovation and programs are subject to assessment. “This kind of evaluation can be a reference for regional leaders,” he said.