Sustainable Regional Expansion Model in Order to Increase the

Regional Potency: Case Study in Indonesia

Sri Winarsi, Wilda Prihatiningtyas and Zuhda Mila Fitriana

Universitas Airlangga, Jalan Dharmawangsa Dalam Selatan Surabaya, Indonesia

Keywords: Local Government, Unitary States, Regional Expansion.

Abstract: As the consequences of applying decentralization system, Indonesia –as a unitary state-, gives bigger authority

for autonomous region is the government obligation to fullfill public demands over public services

improvement and as the implementation of democratic local government. On the other hand, regional

autonomy generates new demands for the government to shorten the relation between the government and its

people. From geographical aspect, the condition of local government is far from the central government

control, thus regional expansion can give contribution in acceleration over public services. In fact, regional

autonmy causes other demands, such as the autonomous region formation request which is known as regional

expansion. Refering to the Data from Ministry of Foreign Affairs, during the period of 1999 to 2009, there

are 205 new regions which consist of 7 provinces, 164 regencied, and 34 municipalities. And the government

needed to spend 300 billion for each region. The Government needs to take serious measure over regional

expansion request increments. This paper is intended to analyze and formulate sustainable regional expansion

in order to increase region’s potential.

1 INTRODUCTION

Regional expansion in the context of regional

autonomy is considerable, since regional expansion is

potentially able lead one state to maximize regional

development equity. The paradigm of regional

development needs to be well directed in order to

accelerate the development, facilitate public service

for society and finally accelerate public welfare. In

post reform regime, there was opportunity for region

to propose state to form new autonomous region in

Indonesia, this chance was given through Law

Number 23 Year 2014 regarding Local Government.

Through this regulation, it is expected that regional

expansion should be more attentive to the law process

which is fairer for the society.

This research is based on 2 main legal issues, first,

ratio legis of regional expansion arrangement under

Indonesian law and regulation. Second, legal

consequence of regional expansion in regard with

regional potential enhancement. Based on those legal

issues, it is expected that sustainable regional

expansion model can be obtained in order to increase

region potential.

2 MATERIALS AND METHODS

This research is based upon 2 approaches, both are

statute approach, and conceptual approach. On the

one hand, Statute approach examines laws and

regulations which are related with the discussed issue.

On the other hand, Conceptual approach is based on

doctrines and point of views which develop within

legal study.

In addition, legal materials which are becoming

the ground of this research are divided into; Primary

legal materials that consist of related laws and

regulations, and secondary legal materials which

consist of literature studies to find concept, theory,

legal opinion or legal discoveries that are relevant to

prescribed legal issue. Not only legal materials, non-

legal sources added in this research are interview and

FGD’s result regarding stakeholders’ perception

related to the religion expansion law and regulation

and the implementation of it.

Winarsi, S., Prihatiningtyas, W. and Fitriana, Z.

Sustainable Regional Expansion Model in Order to Increase the Regional Potency: Case Study in Indonesia.

DOI: 10.5220/0010049201790186

In Proceedings of the International Law Conference (iN-LAC 2018) - Law, Technology and the Imperative of Change in the 21st Century, pages 179-186

ISBN: 978-989-758-482-4

179

3 RESULTS AND DISCUSSION

3.1 Regional Expansion in the Context

of Republic of Indonesia as Unitary

State

Unitary state has different diametrical basic

assumption with federal state. The formation of

unitary state was declared on Independence Day by

Indonesia’s founding father by claiming that the

entire territory as part of this country. There is no

approval from local authorities or states, because it

was assumed that all of region at its territory are not

independent region. Thus, State form regions which

afterwards were given authority by central

government to manage society needs and interest. It

can be assumed that state is the source of it’s authority

(Al Chaidar, 2000).

Pursuant to Article 1(1) The 1945 Constitution of

The Republic of Indonesia, it is mentioned clearly

that Indonesia is a unitary state in the form of

Republic. Consequently, Central Government is the

holder of supreme power over entire state affairs

without any delegation of authority to the Local

Government (Lubis, 1983). In unitary state,

theoretically speaking, there is principle that prohibits

the distribution of power related to the management

of state affairs between Central and Regional

Government, thus state affairs in the concept of

unitary state remain eenheid and the holder of

supreme power in state is The Central Government.

In unitary state, also, Central Government is still

responsible for the governmental affairs. However,

following Indonesia use the principle of decentralized

unitary state model, there are several matters which

can be managed by regional government. This

decision will create reciprocal relation which causes

legal relation between authority and supervision

function.

Moreover, Unitary state concept becomes the

limitation ground of autonomy fundamental

understanding. Based upon that limitation, a ruling

mechanism in which resembles a balance level

between unitary and autonomous region demands.

Both demands, thus, may be able causing a situation

from which “tugging” be created (Manan, 1993).

Despite the situation of tugging create a new stage, it

is common to face this stage, however. Further

observing, this stage is naturally experienced in

countries’ administration matters. In other words,

constitutional and administrative cycle of a state are

connected automatically with its people, either its

citizens or residents.

Every unitary state (eenheidsstaat) can be

arranged based on centralization principle, it can be

conducted wholly-by and from single centralized

government or by central altogether with its organ

which are distributed in regions. Centralization which

is accompanied with distributed who carry out central

government authority partially is called as de-

concentration (centralisatie men deconsentmtie).

Decentralization can be obtained if the authority to

manage state affairs are not solely conducted by

central government, but it is also conducted by lower

independent government entities (zelftanding), which

is autonomous both territorial or functional (Manan,

1994).

On the other hand, the relationship model between

Central Government and regional government is not

only limited on autonomy and federation model.

According to Ismail Suny, there are 5 levels of

relation between Central and Regional Government.

First, unitary state with limited autonomy. Through

Law Number 5 Year 1974 concerning Principle

Government in Region (hereinafter referred as Law

5/1974), Indonesia is one of the example of a state

that use limited autonomy concept. In other words,

theoretically speaking, during the process of regional

autonomy delegating stage, only specific authorities

will be distributed (Hoessein, 1993). Consequently,

itremains giving huge authority for central

government in numerous aspects of state

administrative.

Second, Unitary state with broad autonomy.

Based on economic point of view, this autonomy

should be supported by wealth and good finance

condition. Also, financial balance between Central

and Regional Government is needed. Financial

balance is not conducted solely to give Central

Government authority to manage regional wealth and

financial matter.

Third, Quasi Federal State that equipped with

province which based on central government

“Kindness”. The characteristic of this state is the

authority of central government to decide whether

regional decision is valid or not. This kind of state is

called as quasi federal.

Fourth, Federal State with federal government,

such as the USA, Australia Canada, Switzerland, are

states that

Fifth, Confederation State. At the most extreme

stage, a country can be classified as a Confederation

State model if Central Government has fully trusted

over members of confederation state or

commonwealth member state’s goodwill.

According to that complexity, there are several

criteria that must be applied to measure the

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decentralization efficacy in a country. These criteria

measure how far does decentralization implemented

within state (Nellis, 1986):

1. Giving contribution to the political

achievement

2. Increase administrative or

governmental effectivity

3. Increase economical and managerial

efficiency

4. Increase government sensibility

towards different needs and demands.

5. Increasing confidence among region’s

groups and organization which

represent legitimate political interest

6. Develops appropriate ways to plan and

implement regional development

program and project

Goebler postulated that from the implementation

of governmental function, decentralization or

autonomy, it is showed that (Goebler, 1993):

1. Decentralization (autonomy) units are

more flexible in coping with various

change that occurred rapidly.

2. The decentralization units can conduct

their affairs effectively and more

efficient.

3. The decentralization units are more

innovative.

4. The Decentralization units encouraging

moral enhancement, higher

commitment and create more

productive units.

However, under decentralization and autonomy

development process, there are at least two criteria

that need to be considered. First, decentralization

units are given authority to make decision regarding

their region’s matters. Second, decentralization units

are given freedom to control and divert various

potential sources in their region. From those criteria,

the first criterion is mostly followed by countries.

Meanwhile, the second criterion starts to be left

behind. It is impossible to implement the second

criterion fully in Indonesia since equity principle over

condition, potential and natural resources which are

different to each region, reaching balanced regional

growth and archipelago insight are fundamental

things that need to be satisfied in order to achieve the

purpose of autonomy which are granted to the head of

region, which is in line with Indonesian principle as

unitary state. Thus, most of financial sources which

come from region centrally collected by central

government, after that it will be returned to region

partially. Broad autonomy was used to be considered

as a threaten of our nation integration, however we

believe that autonomy can strengthen integration to

date. There is no single state that destroyed because

of the application of regional autonomy, on the one

hand. On the other hand, the downfall of state mostly

happens because the state is using centralism

governmental model (Kaunda, 1999).

Even if the valuation of decentralization showing

good side, the government need to be cautious when

they aim to implement broader decentralization or

when they want to delegate the implementation of

regional development. There is no passive result from

the assessment over decentralization; however, the

conditions that affect the implementation of

decentralization program can be certainly discovered.

The condition that affect decentralization

implementation are (Nellis, 1986, p. 21): (i) some of

central government and central bureaucracy officials

support decentralization and support organs which

are given responsibility to do decentralization; (ii) to

what extent do the dominant act, behavior and culture

supporting decision making of decentralization; (iii)

to what extent do the policies and programs are

designated and implemented appropriately in order to

increase decentralization of decision making and

management; (iv) to what extent do financial, human

and physically sources that are available for the

organization which were given responsibility to

conduct decentralization.

In the context of unitary state, the regional

expansion during regional autonomy era is urgently

needed. The regional expansion is not conducted in

order to be separated from the main state but it is

conducted to reach effectivity and efficiency of

society development in region. This is in line with

philosophical point of view of regional expansion

which is conducted in order to fulfill people

prosperity. The regional expansion will shorten

control range between state and its people especially

for some regions which has not received facilities

properly. It is also conducted in order to create equal

development among its regions. Natural resources

might be transferred to the underdeveloped region.

3.2 The Ratio Legis of Regional

Expansion Arrangement under

Indonesian Law and regulation

In the history of regional government implementation

in Indonesia, the regional expansion regulation was

started since the promulgation of Law No. 22 Year

1999 regarding Regional government (Law No.

22/1999) jo Government Regulation No 129 Year

2000 regarding the requirement and the criteria of

regional formation and expansion, abolition of region

Sustainable Regional Expansion Model in Order to Increase the Regional Potency: Case Study in Indonesia

181

and regional unification (PP No. 129/2000). Before

this law was enacted, it doesn’t mean that there is no

regional expansion in Indonesia. Referring to data

compiled by Ministry of Internal Affairs, there was

fact that there was regional expansion during old

regime in Indonesia. The regional expansion

happened mostly outside The Java Island. Regional

expansions were considered to be conducted in

Sumatera, Kalimantan and Sulawesi since those

islands have larger geographical area.

The data of regional expansion which are

happened during Indonesian old regime can be seen

on this table (Herawati, 2011) :

Table 1: Regional Expansion Data of Indonesia: Old

Regime.

Year Main Region New Expanded

Region

1950 Sumatera

Province

orth Su

atera

Province (including

Aceh), Central

Sumatera, South

Sumatera

1956 Kalimantan

Province

West Kalimantan

Province, South

Kalimantan

province and East

Kalimantan

province.

1957 Center

Sumatera

Jambi Province,

Riau Province,

West Sumatera

province

North Sumatera Aceh Province

1959 Sunda Kecil

(Lesser Sunda

Islands)

Bali Province, West

Nusa Tenggara

Province, East Nusa

Tenggara Province

South

Kalimantan

Province

Central Kalimantan

province

1960 Sulawesi North Sulawesi

Province, South

Sulawesi province

1963 West Irian joined

Indonesia

1964 South Sumatera

Province

Lampung Province

North Sulawesi

Province

Central Sulawesi

Province

South Sulawesi

Province

South East Sulawesi

Province

In the following new order, regional expansions

were also happened even if the total expansion were

not big. The regional expansions that were happened

during this era is the formation of 3 new provinces.

The formation of region was mainly conducted in the

form of formatting municipalities as a result of rural

urbanization. This process were started by the

formation of administrative city as administrative

region, which later on formatted to be municipality as

autonomy region. The regional expansions were Top

Down and dominated by technocratic administration.

Here is the data of regional expansion during new

order era (Herawati, 2011):

Table 2: Regional Expansion Data of Indonesia: New

Regime.

Year Main Region New Expanded

Region

1967 South

Sumatera

Province

Bengkulu

Province

1969 West Irian

become 26

province of

Indonesia

1976 East Timor

become 27

province of

Indonesia

East Timor

conducted

separation in

1999

According to Article 5 paragraph (1) Law No.

22/1999, it mentioned that “Region is formatted

based on the economic ability, region’s potential,

socio-culture, socio-politic, total of population, how

big the area is and other consideration which make

regional autonomy can be conducted”. It is explained

further under article 6 paragraph (1) and paragraph

(2) Law No. 22/1999 which regulates that every

region can be omitted or merged with other region,

and autonomous region can be expanded to be more

than 1 region based on the development of the region

itself. This law gives highest chance for the formation

of new autonomous region. This law is supported by

Government Regulation No. 129/2000 which is

delegated legislation from Law No. 22/1999.

From normative point of view, regional expansion

according to article 16 of Government Regulation No.

129/2000 consists of these actions:

1. There is political willingness from

regional government and its people

2. Regional formation should be supported

by initial research which is conducted

regional government

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3. The suggestion to form municipality or

regency is conveyed to the Government

cq Minister of Internal Affairs and

Regional Autonomy through Governor,

which is completed by an attachment of

regional research result and approval

from municipality or regency house of

representative which is stated under

Provincial House of Representative’s

Decision.

4. Minister of Internal Affairs and

Regional Autonomy doing further

process and assigning unit to observe

the region, the result of this observation

will be a recommendation for Regional

Autonomy Advisory Council.

5. Regional Autonomy Advisory Council

assigning Regional Autonomy

Advisory Council’s secretarial

technique team to do further research

6. If the Regional Autonomy Advisory

Council meeting result agree upon

regional formation suggestion, Minister

of Internal Affairs and Regional

Autonomy as the head of Regional

Autonomy Advisory Council proposing

the regional formation suggestion and

proposing the Regional Formation Law

Draft to the President.

7. If the President agrees on that

suggestion, the Regional Formation

Law Draft will be conveyed to The

House of Representative in order to get

an approval.

Referring to those normative regulations, it seems

very easy for the region to propose regional

expansion, since it basically only needs the approval

from Regional House of Representative and they

don’t need the approval from the society. The ratio

legis of those regulations is encouraging the

formation of new regions, thus the regional potential

can be maximized. Furthermore by the existence of

regional expansion, regional formation, abolition of

region and merger between region, it is expected that

it can increase people’s prosperity through: a.

Improvement of public service; b. acceleration on

development of democracy; c. acceleration on

regional financial development; d. acceleration on

region’s potential management; e. improvement on

public security and order; f. improvement of

harmonious relation between central and regional

government.(Article 2 Government Regulation No.

129/2000)

Regional Expansion according to Law No.

22/1999 jo Government Regulation No. 129/2000 is

no longer applicable since there is new regulation, it

is Law No 32 Year 2004 regarding Regional

Government (Law No. 32/2004) jo Government

Regulation No 78 Year 2007 concerning the

Procedure of Formation, Abolition, and Regional

Merger (Government Regulation No. 78/2007).

Under Law No. 32 /2004, Government regulates strict

and firm regulation over regional expansion. This can

be seen from the provisions regarding regional

merger that have been expanded if it cannot meet the

minimum standard of work’s result that should be

conducted. Even if it has been regulated under formal

juridical form, there is no regional merger which is

conducted by central government. The addition of

autonomy region is the only thing that has been

implemented as the result of certain region

separation.

Government Regulation No. 78/2007 is stricter

compared to Government Regulation No. 129/2000.

Government Regulation No. 129/2000 is less strict

thus it is easier for region to purpose regional

expansion. For instance, under Government

Regulation No. 78/2007 it is regulated that the

province that would be expanded need to be

minimum 10 years old, meanwhile the municipality

or regency that want to be expanded need to fulfill 7

years of requirement. This provision is different

compared to Government Regulation No. 129/2000

which regulates that the expanded region can directly

be expanded if it is needed. The other significant

chance under this regulation is the minimum amount

of municipalities or regencies that cam be

transformed as New Province and the minimum

amount of districts that can be transformed as new

municipality or regency. Referring to Government

Regulation No. 129/2000, to form new province it is

needed at least 4 municipalities or regencies,

meanwhile under Government Regulation No.

78/2007 it is needed at least 5 municipalities or

regencies. Under Government Regulation No.

129/2000, in order to form new regencies, it is needed

at least 4 districts, meanwhile Government

Regulation No. 78/2007 require at least 5 districts. In

order to form new municipalities, it is needed at least

3 districts, meanwhile Government Regulation No.

78/2007 requires at least 4 districts. Government

Regulation No. 78/2007 has provided legal basis to

merge new region which is a result from separation or

unification of region that is considered unable to

govern its autonomy privilege. It means that if the

expanded region could not maximize its potential, it

would be evaluated by central, thus it is expected that

Sustainable Regional Expansion Model in Order to Increase the Regional Potency: Case Study in Indonesia

183

the region expansion would not cause economic,

socio and political excesses in that region.

By the promulgation of Government Regulation

No. 78/2007, the Government wants to suppress

regional expansion suggestion. Therefore, it would

not be as easy as when Government Regulation No.

129/2000 was applied. Up to 2008, however, regional

expanding remained experienced in a lessen number

compared to previous years, mentioned in data table

below (Agency, 2017) :

Table 3: Regional Expansion Data in Indonesia:

Reformation era to 2008.

Year Month New

Provi

nces

New

Autonomous

Cities/

Municipalitie

Total

1999 October - 27 27

2000 June 2 - 2

October 1 - 1

Decem

ber

2 1 3

2001 June - 12 12

2002 April - 22 22

October 1 - 1

2003 Februar

- 12 12

April - 17 17

May - 12 12

Decem

ber

- 23 23

2004 October 1 - 1

2007 January - 16 16

March - 1 1

August - 8 8

2008 January - 6 6

TOTAL

7 157 164

Furthermore, during the period of 2010 – 2025

Ministry of Home Affairs along with House of

Representative do moratorium by designing of new

autonomous region arrangement by limiting the total

of province and municipalities or regencies into

maximum 44 Provinces and 546 municipalities or

regencies. It means the chance to do regional

expansion during this period will be limited to 11 new

provinces and 54 new municipalities or regencies

which can be approved by Central Government.

3.3 The Legal Consequences of

Regional Expansion in Relation to

the Enhancement of Region’s

Potential

Aforementioned under article Article 2 Government

Regulation No. 129/2000, the regional expansion

intends to give prosperity for its people. Up to 2017,

the latest data collected by the National Law

Development Agency (BPHN, hereinafter), this

regional expansion is becoming more favourable

solution overcoming public matters under local

democracy and impacting national democracy

circumstances (Agency, 2017). By enhancing local

democracy, particularly for the sake of new expanded

region, it can create the development of equality,

liberty, and local responsiveness. In other words,

local’s responsiveness towards national legal reform

thus supports national legal enforcement, at least

aiming it towards. For example, local people may be

able to supervise and control policies and other legal

products from which national level regulation will be

affected, vice versa. Ideally speaking, moreover,

under Central Government’s perspective, the regional

expansion policy becomes a good solution to

encourage economics activities and accelerate

economics development around national border

region. Not only supporting economics development,

three other aspects are possibly enhanced, such as: 1)

National Identity, and 2) the Defense Mechanism of

Outer National Border Region (Agency, 2017).

To add, practically speaking, there are several

impacts (advantages and disadvantages) of regional

expansion mentioned as follows (Pratikno, 2008):

1. Socio - politic aspect.

Refering to this aspect regional expansion can

lead into egosentrism for the region which

further can cause horizontal or vertical

conflict. The regional expansion creates

several new regions which means that the

government will face inefficiency in managing

regional governments

2. Socio – economic aspect

The expanded region is expected to contribute

more for the development of state however on

certain point the expanded region is tend to

rely on central government, thus it is giving

more burden for state economic condition.

3. Socio-cultural

On certain point it can create cohesiveness

among its people, but from external point of

view it can be seen as regional egosentrism

4. Increase public service quality

5. Economic development

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Poverty area is given chance to get more

subsidy from the government which can

improve their percapita income (PCI)

6. Regional expansion can be seen as one of the

cause of the separation which likely happens

within the unitary state. It also can be seen as a

threat for state to form federal state.

In the regional expansion practice field, the logic

consequences that happened are there will be change

in governmental structure, regional budget, region’s

border will be decreased and region’s name will be

changed, and distribution of regional revenue

resources should be conducted (Muqoyyidin, 2013).

According to further studies, the ideal goals’

achievement of regional expansion is threatened by

several factors, such as:1) Performance of Local

Public Servants, 2) the Duration of Regional

Expanding, 3) the Loophole under Local Government

Regulations in Indonesia, and 4) Miss-conceptional

understanding of Local People towards Regional

Expansion Aims (Rebellious Action upon Main

Region inability to provide equality) (Sabarno, 2008,

p. 117)

From the research that has been conducted in

several expanded regions, it is found that the new

region which is a result of regional expansion has no

better economic condition compared to the main

region. The economic development on those new

regions are more fluctuate compared to the main

region. Even if the poverty is successfully reduced in

the main region, the expanded region is not merely

affected.

Figure 1. Poverty Level: Home Affairs Department Data

2008.

By 2008, generally speaking, main region

economic development remained stable at 5-6% per

year, whilst new expanded region seemed more

fluctuative depending on natural resources ownership

and management (Affairs, 2008).

Figure 2. Economic Development: Home Affairs

Department 2008.

Following Sabarno, the factual situation is

grounded in those threats of new expanded region

governing ability. Moreover, unstable of economic

development was also triggered by the fact many

local people who experienced economic level

disparity tent to move out from New Expanded

Region to Main Region. For instance, local people of

Bengkayang Municipality moved out towards

Singkawang City. This migration is also experienced

in North Aceh Municipality from which lowers its

Regional-Owned Source Revenues (Ratnawati, 2009)

& (Affairs, 2008).

It is expected that the regional expansion will be

leading the development, increasing economic level,

shortening the relation between the government and

its people within the particular region. In contrast,

factually speaking, it can be shown that the expanded

region tends to have lower economic level and slower

development in several aspects due to the lack of

comprehensive consideration in terms of planning.

This issue may be solved if the planning of expanding

region has been thoughtfully considered by

authorised bodies.

4 CONCLUSIONS

The spirit of regional expansions which is regulated

under Law No.22/1999 jo Government Regulation

No. 129/2000 which is replaced with Law No.

32/2004 regarding Regional Government jo

Government Regulation No. 78/2007 concerning the

Procedure of Formation, Abolition, and Regional

Merger are to bring prosperity for their people. The

regional expansion is intended to improve public

service, accelerate the development of democracy,

financial development, region’s potential

management, improve public security and order and

improve the harmonious relation between central and

regional government. However, in fact, the expanded

region remains placed on lower level of development

Sustainable Regional Expansion Model in Order to Increase the Regional Potency: Case Study in Indonesia

185

both in economic and services compared to the main

region. Thus, the regional expansion should be

planned wisely and there should be fair distribution

of financial sources between the regions in order to

create sustainable regional expansion.

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