Sri Mulyani: Central And Regional Government Relations In Indonesia Make Foreigners Interested

Minister of Finance Sri Mulyani (Photo: dock. Antara)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani Indrawati said that the relationship between the central and regional governments in Indonesia attracted the attention of international organizations.

"Many international organizations are interested in Indonesia regarding how Indonesia continues to improve relations between the center and the regions, both from the government and fiscal side," Sri Mulyani said quoting Antara, Tuesday, October 3.

The Minister of Finance said that the idea of decentralization needs to be continuously calibrated. In addition, the delegated authority needs to be increased based on the situation so that it can be in accordance with the problems faced.

For example, continued Sri Mulyani, community mobility is increasing along with infrastructure development that further connects inter-regional access.

If these conditions are not balanced with local government alignment, it will burden the community and hinder economic performance.

To overcome this condition, the Indonesian Government has drafted a Law on Harmonization of Central and Regional Finances (UU HKPD) which is able to strengthen fiscal decentralization.

The State Treasurer believes that the HKPD Law can provide an overview of how Indonesia continues to learn and improve relations between the central and regional governments.

This then provoked the attention of international organizations towards Indonesia. "Because many other countries are in trouble between the central and regional governments," added the Minister of Finance.

The HKPD Law has 4 pillars of purpose, namely developing central and regional financial relations, developing a regional tax system to support efficient allocation of funds, improving spending quality, and harmonizing central and regional spending.

In its implementation, the government will focus on improving local taxi power by implementing the new Regional Tax and Regional Retribution (PDRD) and simplifying the PDRD Regional Regulation. The government will also focus on improving the quality of Regional Financial Transfers (TKD) through the TKD earnered synergy with K/L spending to achieve national priorities.

The next focus is on aligning the national fiscal policy. Finally, namely reforming regional financial management carried out by implementing active cash management to accelerate the realization of regional spending and digitizing monitoring and evaluation.