New Order Law Essay

Indonesia has started to decentralize governments’ affair since the fall of the long reign of President Suharto (1965-1998). During the three decades of –what so called- the New Order Era, Suharto developed a centralized government, both in the governance and the financial system. The reign also adopted a decentralized system, by the adoption of the Law of 5/1974. Nevertheless, the law primarily introduced a uniform system of local government for the whole Indonesian territory and neglected the existence of local systems that had been rooted in the society. As a result, local governments did not actively involve in development of programs and policies. This fact was mainly caused by the role of the central government holding all the political and economic resources. In 1999, the People Representative Assembly (Dewan Perwakilan Rakyat-DPR) passed a set of crucial law i.e. No. 22/1999 on Decentralization of Local Government and Law No. 25/1999 on Fiscal Balance between the Central and Local governments. The implementation of these laws, on the 1st January 2001 marked the beginning of a

23/2014 on Local Government which is still applicable in the present time. Compare to the previous laws, the law reduces the power of the local governments by introducing several measures for better decentralization, so that the governance of the public sectors can be more effective. The measures have three aims; the first is stressing on the presence of the state by regulating the law as the national authority and a central power. The second measure is to strengthen the position of the governor as the national government’s representative in providing guidance and oversight over the regencies and municipalities. The last measure is to introduce administrative penalties the local governments up to the dismissal of the regional head for a number of violations which against the national