establishing new policy on authority is then materialized in the new Regional 

Autonomy Bill (UU No. 22 and 25 year 1999) in active by January 1

st

 2001. The 

main objectives of this regional autonomy bill are to transfer some of the the 

authority and fiscal to the regional.  

The main issues of the regional autonomy bill, is to enable regional government 

utilized and allocated the regional resources to the benefit of the regional 

communities. Regional planning should be under the decision of the regional 

communities needs rather then what the central government needs. 

Unfortunately, the implementation of the regional autonomy is taking place under 

the uncertainty of the national politics and during the worse economic crises 

occurred in Indonesia. It is also clearly seen that the main issues of regional 

autonomy were overlapping with political agenda in the central government. 

Therefore, this decentralization process were also have created the disintegration 

threat in several regions. This disintegration threat is mainly due to the unequal 

distribution of development occurred during the previous central planning policy. 

Furthermore, regional resources previously were extracted from the region with 

out proper composition to the regional communities and development. 

There are still no sign of economic recovery after almost 20 months prior to the 

implementation the regional autonomy bill. In most of the off Java regions, the 

local government is having serious problem on budget allocation, due to their very 

small local government revenues. The only possible sources of local government 

income to date is by establishing additional taxes, local retribution and levies to 

the communities, especially to the business. The other ironic, consequences are 

there is a tendency on further degradation of environment caused by extraction of 

the natural resources.  

VI    9