Mixed Outcomes: The Impact of Regional Autonomy

and Decentralization on Indigenous Ethnic

Minorities in Indonesia

Christopher R. Duncan
ABSTRACT
This article examines how indigenous ethnic minorities in Indonesia are being affected by the implementation of decentralization and regional autonomy policies. New legislation transferred responsibility and authority over
various issues, including resource extraction and local governance, from the
central government to regional authorities at the district level. Members of
the growing indigenous rights movement hoped that this decentralization
process would allow ethnic minority communities to retain or regain control
over natural resources through local-level politics. Furthermore, some ethnic minorities saw the implementation of decentralization as an opportunity
to return to local forms of land tenure and resource management that had
been disparaged by the national government for most of the twentieth century. However, these new laws also encourage district level governments to
generate income through natural resource exploitation, as they will receive
a certain percentage of these revenues. Minority communities could be adversely affected as local governments disregard their land rights in efforts to
raise income to cover their new expenses, essentially continuing the practices
of previous governments. This article examines the new opportunities, as well
as the new threats, posed by decentralization to ethnic minorities throughout
Indonesia.

INTRODUCTION

Indonesia began experimenting with a new form of decentralization at the

end of the twentieth century, with the passage of new legislation that shifted
political and fiscal authority from the national government in Jakarta to
sub-provincial level governments throughout the country. This transfer of
authority transformed one of the most centralized governments in the world
into one of the most decentralized (World Bank, 2003b: 1). On the national
level, politicians and policy makers saw decentralization and regional autonomy as a way to stabilize the country by making government more accountable to local populations and by addressing demands from regional leaders

C Institute of Social Studies 2007. Published

Development and Change 38(4): 711733 (2007). 
by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St.,
Malden, MA 02148, USA

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Christopher R. Duncan

that wanted more control over their natural resources. 1 Communities from
resource-rich regions had long complained that the wealth generated by their
natural resources had enriched politicians and their cronies in Jakarta rather
than benefiting local communities. Many saw regional autonomy as one way
to address this by returning control over most of these resources to regional
governments. Policy makers also thought that shifting authority and responsibility for numerous administrative functions to the local level would make
government more responsive to local concerns.
A large amount has been written about decentralization and regional autonomy in Indonesia, but most of the analysis has focused on the economic
and political aspects of the legislation (Alm et al., 2001; Aspinall and Fealey,
2001; Hadiz, 2004a), or its impact on natural resources, particularly in the
forestry sector (Barr et al., 2001; Resosudarmo, 2005). Despite this vast
amount of literature little attention has been paid to how this legislation
could affect indigenous ethnic minorities throughout the country. While the
legislation presents new opportunities for ethnic minorities, it also presents
new challenges and new threats. On the positive side, members of the growing
indigenous rights movement hope that this move towards regional autonomy
will allow indigenous ethnic minority communities in Indonesia to retain, or
regain, control over natural resources through local-level politics (Nababan,
2002). Additionally, some ethnic minorities see regional autonomy as an opportunity to return to local forms of governance, land tenure, and resource
management practices that had been ignored or discouraged by the national
government during most of the twentieth century. However, the new fiscal arrangements encourage district-level governments to generate revenue
through natural resource extraction, as they will receive a large percentage
of this income. The districts need these new revenues now that they are responsible for a large portion of their own budgets, which have increased
significantly since the central government shifted numerous responsibilities
to the district level as part of the decentralization process. Unfortunately,
the aggressive extraction of natural resources often works against the best
interests of indigenous peoples as these resources (timber, minerals, and so
on) are often found on their land.
Another aspect of decentralization, and one that remains under-examined,
is the fate of small-scale indigenous ethnic groups, such as swidden agriculturalists and forest-dwelling foragers, under regional autonomy. Numerous
scholars (see, for example, von Benda-Beckmann and von Benda-Beckmann,
2001: 78; Li, 2002) have noted the connection between decentralization
and the increase in localism, but few have looked at how this connection has
impacted smaller indigenous groups that remain minorities after decentralization. Although calls for localism may benefit the larger group or groups
in a district, small-scale societies often do not share the same benefits. These
1. In the Indonesian context, the terms decentralization and regional autonomy are used interchangeably.

Regional Autonomy and Decentralization in Indonesia

713

groups are often still peripheral to regional governance structures and remain
largely absent from the local political hierarchies and bureaucracies that will
make decisions in newly decentralized districts. However, these same groups
often occupy land rich in natural resources. Thus regional autonomy will most
likely benefit certain larger indigenous ethnic minority groups, while continuing, and in some cases accelerating, policies that work against the best
interests of smaller groups. In what follows, I examine the contradictory impacts of the new regional autonomy legislation on this particular sub-set of
ethnic minorities, looking at examples from the literature, as well as from
my own field research on the eastern Indonesian island of Halmahera in the
province of North Maluku.
THE PROMISES OF DECENTRALIZATION

Decentralization refers to the process in which central governments transfer

political, fiscal and administrative powers to lower levels in an administrative
and territorial hierarchy. This process has become popular throughout the
world over the last several decades. In Southeast Asia, several countries have
undertaken new plans to decentralize government authority (Arghiros, 2001;
Bird and Rodriguez, 1999; Blunt and Turner, 2005). These efforts have been
vigorously supported by multi-lateral institutions such as the World Bank and
the Asian Development Bank (i.e. World Bank, 2005). This support stems
largely from the idea that decentralization will promote better governance as
local officials are supposedly more aware of, and more responsive to, local
needs (Ribot, 2004: 11). Proponents of decentralization also argue that it will
encourage the growth of democracy as local citizens are provided with more
control over their own governance (Crook and Manor, 1998; Manor, 1999).
As communities participate in local politics, governments will become more
accountable to their constituents. Enhanced accountability, it is argued, will
lead to better policy and less corruption (Agrawal and Ribot, 1999). 2 It is
also claimed that decentralization will improve natural resource management
(Kaimowitz and Ribot, 2002). They contend that local communities living
in direct proximity to the environment under exploitation will be more likely
to adopt sustainable resource management practices than outsiders.
A further incentive to decentralize is the belief that the interests of ethnic
minorities and other marginal groups within the state are better protected
as local communities gain more control over their own affairs (Kaimowitz
et al., 1998; Kalin, 1999). However, others contend that decentralization
allows local elites to capture more benefits while still excluding ethnic minorities and other vulnerable populations from the political process (Hadiz,
2004a; Resosudarmo, 2005). As Ribot (2004: 23) notes: Even perfectly
2. Whether decentralization increases or decreases corruption remains a matter of debate
(Bardhan and Mookherjee, 2000; Fisman and Gatti, 2002).

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representative and downwardly accountable local authorities may overexploit resources and ignore minority interests if given the unbridled power
to do so. These regional elite have little inclination to include ethnic minorities in the political process as their loyalties and future election hopes
are often tied to majority communities that might have different needs and
desires than local minorities.
Whether decentralization policies have helped indigenous ethnic minorities remains open to debate. Some authors argue that indigenous ethnic minorities have benefited from the new arrangements that arise from decentralization, while others have noted the failures. The case of Bolivia represents
a good example. Kaimowitz et al. (1998) claim that decentralization allowed
Bolivias indigenous minorities to gain more control over their land and over
governance. In contrast, Beneria-Surkin (2004: 3, 7, cited in Hughes, 2005:
30) found that indigenous communities fared poorly under Bolivias decentralization policy, due in large part to their inability to take advantage of
the political space opened up by decentralization. Although decentralization
provides new opportunities for ethnic minorities to participate in local politics, they are often still excluded from the decision-making process. In many
places continued discrimination against indigenous minorities, based in part
on the belief that they are incapable of effective governance, continues to
hamper their participation in decentralized politics. In Vietnam, a UNDP
study (2006: 356) found that the widely held prejudice that ethnic minorities have low capacity and a low intellectual level has been a significant
obstacle to increased minority participation. Thus, although decentralization shifts authority to lower levels of government, it does not always lead to
the equal inclusion of all indigenous peoples.
INDIGENOUS PEOPLE AND ETHNIC MINORITIES IN INDONESIA

The topic of indigenous people and ethnic minorities has always been a tricky
one in Indonesia. The Indonesian government has a strict policy of not officially recognizing ethnicity in government discourse or policy making. Calls
for preferential treatment by groups claiming status as indigenous people
were discouraged, if not explicitly forbidden, for most of Indonesias postindependence history. The government argues that the international legal
category of indigenous people is not applicable to the nation, as almost
all Indonesians (with the exception of the small Chinese community) are
indigenous. For example, there is no official body for dealing with indigenous people, or tribal people as there is in Malaysia or Vietnam, nor does
the government recognize certain ethnic groups as having special legal privileges based on their indigeniety. Special recognition of this type would be
considered unconstitutional since all Indonesians are guaranteed (in theory)
the same rights. The government does have a programme aimed at developing certain groups that it considers to be lagging behind the mainstream,

Regional Autonomy and Decentralization in Indonesia

715

such as forest-dwelling foragers and swidden cultivators. The government

refers to such groups as geographically isolated customary law communities (komunitas adat terpencil), but being labelled as such is not associated
with any particular legal category (Duncan, 2004).
The governments stance on issues of indigeniety hindered the development of an indigenous peoples movement during the reign of President
Suharto (196798, often referred to as the New Order). In the 1990s, however, as international aid agencies began to pay more attention to the plight
of indigenous minorities throughout the world, local groups in Indonesia began organizing and in 1999 founded the Alliance of Indigenous Peoples of
the Archipelago (Aliansi Masyarakat Adat Nusantara, or AMAN). AMAN
seeks to represent indigenous peoples as they attempt to gain recognition
and land rights from the government. AMAN defines indigenous peoples
as communities which have ancestral lands in certain geographic locations
and their own value systems, ideologies, economies, politics, cultures and
societies in their respective homelands (Down to Earth, 1999). Although
still problematic, the foundation of AMAN marks an organized effort to
strengthen the position of those politically marginalized groups that were
harmed the most (and victimized) by the politics of development over
the last three decades (AMAN, n.d.: 2). These groups include the Sakai
and Orang Rimba of Sumatra, the various Dayak groups and the Punan in
Kalimantan (Indonesian Borneo), and numerous groups in Papua, to name
just a few.
These small-scale societies on the political margins of Indonesia were
among the communities most adversely affected by the natural resource
policies of the Indonesian state prior to 1998. These groups often lived on
land that was needed for natural resource extraction, plantation expansion or
transmigration. Officials and bureaucrats usually saw them as obstacles to
development, which needed to be removed. Along these lines, the Indonesian government passed numerous pieces of legislation such as the Basic
Forestry Act of 1967, the Basic Mining Act of 1967, and the Basic Agrarian
Law of 1969 that placed the rights of the state and national development ahead of the rights of individual communities. For example, the Basic
Forestry Act of 1967, although recognizing the existence of locally owned
forests, stated that local communities could not obstruct the implementation
of government development agendas. Furthermore, in the 1980s, in what has
been called one of the largest land grabs in history, the national government
classified over 75 per cent of the nations land as State Forest, essentially taking land away from local communities and putting it under state control (Fay
and Sirait, 2001: 126). 3 Government officials saw individuals or communities who contested the seizure of their land as agitators working against
the best interests of the nations development by government officials, rather
3. Recent legal court cases in Indonesia are challenging the legality of these claims, see
Contreras-Hermosilla and Fay (2005: 1016).

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than victims seeking just compensation for their losses. These agitators were
either jailed or intimidated with threats of violence (Human Rights Watch,
2003). The allocation of logging or mining concessions and the demarcation
of transmigration sites and plantations was usually done without the consultation of the people who lived in these supposedly empty spaces. Their rights
and needs were disregarded and subjugated to those of industrialists, loggers,
and others who were connected to the Suharto family, their cronies, or the
military. These connections enabled certain individuals to acquire land at a
furious rate, while making it difficult for indigenous minority communities
(as well as other marginalized communities, such as farmers in Java or Bali;
see Bachriadi and Lucas, 2001) to hold on to their land.
The cultural policies of the Indonesian government during the Suharto
regime also threatened the continued survival of many small-scale ethnic
groups. Many government officials considered these groups backward and
primitive people who needed to be brought into mainstream Indonesian
society. To facilitate this process the government had several programmes
aimed at developing these groups. One of the more notorious was the
Programme for the Development of Social Prosperity of Isolated Societies
(Pembinaan Kesejahteraan Sosial Masyarakat Terasing) renamed the Programme for the Development of Social Prosperity of Geographically Isolated
Customary Law Communities (Pembinaan Kesejahteraan Sosial Komunitas
Adat Terpencil) in 1999. This programme sought to incorporate such groups
into the nation-state through a five year period of social engineering that
attempted to change various aspects of a groups culture, such as agricultural techniques and religious beliefs, and included (often forced) resettlement. For example, on the island of Halmahera in eastern Indonesia, officials
used this programme to justify the resettlement of numerous forest-dwelling
groups into coastal communities, often against their will. The government
then took their land for state-sanctioned development projects (Duncan,
2002).
The national government also passed legislation aimed at eroding the
traditional heritage of local communities. The 1979 Law on Village Administration standardized village government across the archipelago and
replaced local systems of community governance with a Javanese model. 4
Local customary leaders were marginalized or removed, and individuals more
amenable to state rule were installed in their place. Harwell and Lynch (2002:
27) refer to the law as the most crippling assault ever on village authority in
Indonesia. Village leaders became civil servants responsible to the central
government rather than to the local population (Antlov, 2003). They had little
interest in maintaining traditions that did not benefit them, and in some cases
even called into question their legitimacy (Bartels, 2003: 139). This law also
had a negative effect on the ability of many ethnic minorities to preserve local
systems of land management and resource use. Local leaders who formerly
4. Law 5/1979 on Village Administration.

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717

oversaw resource use allocation and land management lost their authority
to village heads who now implemented policies based on national directives
that often showed little concern for sustainability or local needs. The Law on
Village Administration and the above-mentioned laws on natural resource
extraction have all been either repealed or substantially altered by the new
regional autonomy legislation.
DECENTRALIZATION IN INDONESIA

The Indonesian governments plan for decentralization, despite being rather

vague and not well thought out, has been very ambitious. It has included
plans for the transfer of both fiscal and political responsibility from Jakarta
to over 400 districts and municipalities. The process initially centred around
two pieces of legislation: Law 22/1999 on Regional Governance and Law
25/1999 on the Fiscal Balance between the Central Government and the
Regions. These laws were pushed through the legislative branch immediately after the fall of President Suharto in 1998 by his replacement President
Habibie. The national government passed the legislation, in part, to mollify
regional leaders who were tired of centralized rule from Jakarta and wanted
more say over their own governance and their own resources. Habibie also
hoped that the quick passage of such legislation would help to create a constituency in the outer provinces to help his (ultimately cancelled) bid for
re-election. The legislation bypassed the provinces and transferred authority
from the central government directly to districts (kabupaten) and municipalities (kotamadya), the level of government directly below that of the province.
Legislators hoped that transferring power to the districts and municipalities
would make government more responsive to local communities and placate
the critics of centralized rule. They also thought that bypassing the provincial level of government would curtail separatist tendencies that are more
prominent at that level (particularly in places like Aceh and Papua), something that had hindered earlier efforts at decentralization. Furthermore, the
government would have more control over the smaller districts than it would
over larger, more powerful provinces. 5 The central government passed the
laws so quickly that they lacked clarity and were rife with contradictions and
inconsistencies (Bell, 2001). As a result, both laws were amended with the
passage of two revised laws on regional autonomy in 2004. Law 32/2004
on Regional Administration replaced Law 22/1999, and Law 33/2004 on the
Fiscal Balance between the Central Government and the Regional Governments replaced Law 25/1999. 6 For the focus of this article, minority rights,
5. The average population of districts/municipalities is 500,000, but it ranges from 120,000 in
more rural regions to 3.5 million on Java.
6. The two revised laws on regional autonomy are not the only pieces of legislation that
affect the process of decentralization. Numerous other regulations and laws from both

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the substantial change was in the Law on Regional Governance that now calls
for the direct election of the district head or mayor. 7
The legislation on regional governance, Law 22/1999 (subsequently replaced by Law 32/2004), transferred political control to the many districts
(kabupaten) and municipalities (kotamadya) across the country. These regional governments have been given authority over areas such as health,
education, village governance, land tenure, trade, environment and resource
extraction. 8 The national government remains responsible for national defence, international relations, justice, security, religion, and monetary policies. Along with these new authorities and obligations the central government
transferred a large number of civil servants (and the responsibility to pay their
salaries) to regional governments. To understand the magnitude of this shift
in authority, the World Bank notes that over 2 million civil servants, as well
as 239 provincial-level offices of the central government, 3,933 local-level
offices, and more than 16,000 service facilities schools, hospitals, health
centres were transferred lock stock and barrel to [over 400 plus] regional
governments throughout Indonesia (World Bank, 2003b: 1).
The second aspect of regional autonomy, Law 25/1999 (subsequently replaced by Law 33/2004 of the same name) on the Fiscal Balance between the
Central Government and the Regions, provides for, among other things, the
redistribution of natural resource revenues to the district level. The districts
now receive a certain percentage of revenues generated by the exploitation
of natural resources, particularly oil, natural gas, timber and mining (see
Appendix Table A1). Officials hoped this legislation would address longterm resentment from resource-rich regions that were angered over perceived
outflows of wealth to Jakarta, particularly Aceh and Papua. In fact the latter
two provinces were given their own regional autonomy laws with a different distribution of resources. According to Law 21/2001 on Special Autonomy for the Province of Papua, the provincial government of Papua receives
70 per cent of the revenue from oil and gas exploitation for the first twentyfive years, after which the revenues will be 50 per cent for oil and 40 per
cent for natural gas. 9 The province of Aceh will receive 80 per cent of
the revenues from oil and gas for an eight year period, and then the revenue will be reduced to 50 per cent. 10 The other aspects of revenue sharing
are similar to other provinces. The new legislation also gives all districts

7.
8.
9.
10.

Jakarta and district capitals can affect how decentralization is subsequently enacted at the
local level. These include implementing regulations from national-level ministries and from
district-level governments. Often these regulations depart from the spirit of the original
decentralization legislation (Antlov, 2003: 201). The implementation of regional autonomy
is also affected by (often contradictory) existing sector laws and regulations from ministerial
departments, such as the Department of Forestry.
Law 32/2004: article 24, paragraph 5.
For a more in-depth discussion and analysis see World Bank (2003b).
Law 21/2001 on Special Autonomy for the Province of Papua: article 34, paragraphs 26.
Law 18/2001 on Special Autonomy for the Special Administrative Area of Aceh as the
Province of Nanggroe Aceh Darussalam: article 4, paragraphs 35.

Regional Autonomy and Decentralization in Indonesia

719

and municipalities in Indonesia the authority to implement new taxes and

fees to raise revenues. At the same time that these regions received control
over these new sources of income, they also accepted responsibility for a
significant portion of local expenditures previously covered by the central
government. 11
Local Participation and Indigenous Ethnic Minorities

One of the main selling points for decentralization was that it would allow for stronger local participation in government as older patterns of centralized rule from Jakarta were discarded. Local communities now have an
opportunity to play a larger role in shaping and implementing policy that directly affects them. Regional leaders (the district head, bupati, or the mayor,
walikota) are now directly elected by their constituents (albeit from a list of
candidates selected by political parties) rather than being appointed by the
Department of Interior Affairs in Jakarta. 12 Thus, in theory, regional leaders
are now accountable to their constituents, rather than to the central government. Even village heads are now, technically, more accountable. Prior
to the new legislation, village heads were approved by higher administrative levels and were responsible to those officials. Now they are elected by
the community and must report to a Village Representative Board (Badan
Perwakilan Desa) made up of local citizens who evaluate their work. 13 Advocates of indigenous rights hope that this new level of accountability will provide ethnic minorities with a greater say in influencing policy decisions that
affect them.
The new autonomy provided by decentralization gives regional leaders
the ability to turn down large-scale development projects that they consider
harmful to the best interests of their constituents. For decades, decision makers in Jakarta implemented development plans throughout the country without taking notice of local interests. One result was a frequent lack of concern
for the rights and well-being of ethnic minorities as the state took their
land for large-scale development projects, such as transmigration, timber
concessions and plantations. One of the most egregious examples of national development priorities that disenfranchised ethnic minorities was the
Million-Hectare Peat-Swamp Project in Central Kalimantan. This project
sought to transform over one million hectares of peat swamp into a ricebased transmigration settlement for 1.5 million migrants. The indigenous
11. The numerous other aspects of Law 33/2004 that affect the fiscal relationship between
Jakarta and the districts are beyond the scope of this article. For more details on these new
arrangements, see Hofman et al. (2006).
12. Law 32/2004 on Regional Administration: article 24, paragraph 5; also article 56, paragraph
57.
13. Law 32/2004 on Regional Administration: articles 203210. For a good analysis of how the
Village Representative Board works, see Ito (2006).

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Christopher R. Duncan

Dayak people who lived in the project area saw their livelihoods largely
destroyed. The project turned productive gardens, forests and other communally and privately held lands into one of the most desolate spots on earth
a vast, stinking, blackened, smouldering and toasted place (Vidal, 1997
cited in Barber and Schweithelm, 2000: 34). Dayak communities received no
compensation from the government other than promises of inclusion in the
ultimately failed project. Unfortunately, examples such as this were common
during the last decades of the twentieth century. The central government considered sparsely populated regions outside of Java as empty places open
for development, rather than taking note of local people or local land-use
systems. The new regional autonomy legislation allows district governments
to refuse such projects, a major step forward in the ability of local people
to reclaim, or defend, their land rights. Regional autonomy also allows local
communities within a district to fight projects proposed by the district government. The ability to reject development plans devised at the national and
regional level provides ethnic minorities (and others) with more control over
their future than they had under previous regimes.
The new autonomy provided to villages also presents ethnic minorities with
an opportunity to return to local forms of customary rule. Older laws requiring a standardized form of village administration throughout the archipelago
have been repealed and villages can now choose to implement forms of
government based on local custom (adat). After decades of being ruled by
national legislation that often disregarded local beliefs and customs as a
hindrance to development, some ethnic minority communities hope that a
revitalization of adat will allow for more nuanced governance that pays attention to local needs and local culture. Regional autonomy has allowed some
regional governments to pass legislation that recognizes the legitimacy of
indigenous institutions for local governance, such as in the province of West
Sumatra and the district of Tana Toraja (South Sulawesi). 14 Furthermore, the
legislation in West Sumatra, where the majority of the population are from
the Minangkabau ethnic group, noted that the Mentawai, an ethnic group that
inhabits the Mentawai Archipelago off the coast, have a different adat and
culture and gave them an opportunity to create their own governance system
(Eindhoven, 2003: 47). In another example, the district government of Lebak
in the province of West Java passed a regional government regulation that
recognized the collective rights of two groups of the Baduy ethnic group. 15
This legislation recognizes the Baduy as a distinct community, and allows
them to govern their land based on their own custom (Colchester et al., 2003:
260).
14. West Sumatra Province Regional Government Regulation 9/2000 on Guidelines for the
Return of Village Government to the Traditional Nagari System, and Tana Toraja District
Regional Government Regulation 2/2000 on Lembang Government.
15. Lebak District Regional Government Regulation 32/2001 Protecting the Traditional Communal Land Use Rights of the Baduy People; see also Koran Tempo (2002).

Regional Autonomy and Decentralization in Indonesia

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The ability to control access to their land has enabled some communities
to profit from businesses that need access to that land. After decades of receiving little, if any, benefit from extractive industries, local communities
can now demand compensation from companies seeking use rights. Timber
companies, mining companies and others must co-operate with local people, at least superficially, or be denied access. Many local communities now
require numerous promises from timber companies, such as jobs, money,
and agricultural inputs before they grant permission to begin logging. For
example, a 20034 survey of sixty-five communities in East Kalimantan
found that the number of households per community that received financial
benefits from logging had increased significantly from 1 per cent before
decentralization to 94 per cent afterwards (Palmer and Engel, forthcoming).
However, results from this same study showed that although most communities were receiving benefits, others continued to lose their land and resources
for minimal financial compensation (Engel and Palmer, 2006: 444). As a
result, although communities are now able to receive some level of compensation (more than they did under previous regimes), the majority of profits
still go to regional elites and the companies involved in resource extraction
(Resosudarmo, 2005). Access to community forests is often granted by particular individuals or particular factions rather than the entire community,
which can lead to conflict within villages (McCarthy, 2004: 121011). Furthermore, some research has shown that decentralization has also increased
conflicts between ethnic groups with competing claims over land and natural
resources (Sudana et al., 2004).
Although many ethnic minorities are faring better under decentralization,
groups that became minorities due to redistricting, or that remain minorities
within an existing district, are no better off, and in some cases are doing worse.
Decentralization can often strengthen pre-existing power relations in cases
where traditionally marginalized people are unable to organize (Crook and
Manor, 1998: 302). In places such as Kalimantan, many politically powerful
Dayak groups have been doing well since the implementation of regional
autonomy. They have been able to regain control of land and resources that
they had lost under previous governments. However, this is not the case for
everyone. For example, the Punan, a group of forest-dwelling foragers in
Kalimantan, generally do not fare as well as other Dayak groups. They are
still a minority group and are often unable to organize or gain any political
power (due in large part to this lack of political organization). As new rights
and monies are being distributed, the Punan are often forgotten or in some
cases outright ignored (Wollenberg et al., 2006: 428).
The Forest Tobelo, a small group of forest-dwelling foragers on the eastern
Indonesian island of Halmahera, provide another example of a group not
faring well under regional autonomy. They have long been the subject of
development efforts by the national and provincial government (Duncan,
2002). However, these development efforts were often aimed at removing
them from land needed for timber plantations, transmigration or forestry

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concessions, rather than actually improving their socio-economic conditions.

In 2002 local elites claimed that under regional autonomy the Forest Tobelo
would no longer lose their land to development projects. Unfortunately, recent
initiatives show that the system continues to work as it always has and planned
resettlements of Forest Tobelo groups are going ahead as their land is taken
for other developments. Furthermore, future forestry and mining proposals,
often accelerated due to decentralization, threaten the last remaining forests
in which they live. The Forest Tobelo, like the Punan, remain unable to contest
these moves due to their lack of political organization and political power
and their continuing lack of presence in the bureaucracies that make these
decisions.
Another problem facing some ethnic minorities, particularly those who
have been resettled, is that they do not live in autonomous villages, but in
hamlets (dusun/anak desa) under the jurisdiction of a larger village, often
of a different ethnic group with whom they have limited ties. As a result,
the village head can now legally give away the rights to their land in the
name of regional autonomy. For example, in Halmahera most Forest Tobelo
settlements are technically under the jurisdiction of neighbouring villages. In
one particular case a Forest Tobelo community is now under the jurisdiction of
a neighbouring village of government-sponsored migrants who are primarily
from the Bicoli ethnic group. These Bicoli migrants live on land that the
government took from the Forest Tobelo in the 1980s to build a transmigration
settlement. The migrants have long had their eyes on remaining Forest Tobelo
land and have never been shy about stating those desires. Now that the Forest
Tobelos land is technically under Bicoli jurisdiction as part of their village,
the Bicoli can control how it is allocated for development projects, such
as selling timber rights, allowing gold mining, or giving away the land for
plantations. History shows that these decisions will most likely be made
without Forest Tobelo consultation and without concerns for their future. This
situation is not unique to this village in Halmahera, but occurs throughout
the archipelago.
Decentralization, Natural Resources and Corruption

The benefits of new local controls over development projects and natural
resource extraction created by regional autonomy are almost immediately
offset by the new fiscal responsibilities of regional governments. Although
the central government still provides a large amount of money for district
budgets, the regions have been given responsibility to cover a certain percentage of civil servant salaries, as well as other costs. Thus just as the districts
have been granted the authority to turn down timber, mining and plantation projects that conflict with local interests, they now need and desire
the income that these projects can generate. Issuing new permits for logging,
mining, or plantation expansion presents a quick and easy way to fill regional

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723

coffers for newly elected politicians. The almost millenarian hopes that many
have placed on the promises of regional development have increased the
pressure to raise funds. Newly elected local elites may feel compelled to
deliver on election promises, and their constituents are eagerly (often impatiently) waiting for such fulfilment. Thus even though transfers from the
central government often equal the expenditures they previously covered,
district level officials need even more funds for infrastructure development
and to pursue new projects (Brodjonegoro, 2004: 9). These desires for rapid
development are often coupled with a lack of expertise at the local level
to develop long-term management plans for the exploitation of natural resources. The danger is that regional leaders will choose short-term growth
over long-term sustainability. Ethnic minority communities could be adversely affected by such moves, as local governments disregard their land
rights in efforts to raise income to cover government expenditures and pet
projects.
Politicians also tend to side with business interests over those of local
communities, particularly in the area of the natural resource exploitation and
plantation expansion (Djogo and Syaf, 2003: 1617). In their quest to raise
income (both for their districts and for their own pockets) local politicians
eagerly seek businessmen to invest in their districts and often offer up their
natural resources as an enticement. However, these natural resources are often
claimed by indigenous minorities or in some cases the rural poor, who cannot
defend their claims against an entrenched regional elite. These communities
are only briefly consulted, if at all, before district-level civil servants and
district-level assemblies (DPR-D) approve these projects. For example, in
the district of North Halmahera district officials and elected members of the
DPR-D are considering a plan that will convert large swathes of the districts
interior into oil palm plantations. These plantations, managed by a number
of Jakarta-based conglomerates, would appropriate large tracts of land from
several indigenous minorities, including Pagu, Modole and Forest Tobelo
communities. Some communities would be engulfed by the plantations and
would lose virtually all of their forest land and gardens, which would be
converted to oil palm. Discussions of these plans focus on the income they
could generate for district budgets, rather than the welfare of the people who
would lose their land and their livelihoods.
The detrimental effects of regional autonomy on natural resource management have been examined in-depth in the forestry sector. In general,
the process of decentralization has led to an increase in illegal logging.
McCarthy (2001: 22) notes that decentralization does not completely explain
the rise in illegal logging: the increase began during the monetary crisis of
1997 and continued during the chaos following the fall of Suharto in 1998.
Decentralization will, however, make it harder to stop. Local officials, unconcerned with the long-term forestry planning undertaken in Jakarta, may
seek to exploit this illegal logging as a source of income rather than attempting it control it. For example, in a district in Central Kalimantan, rather than

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Christopher R. Duncan

trying to stop illegal timber operations, the district head decided to tax the
shipments of illegal logs that passed through his district to produce more revenue. While producing a new income stream for the regional government, he
essentially legalized illegal timber shipments (McCarthy, 2001: 1114). The
decentralization of natural resource management has led to a frontier-like
atmosphere in the outer regions of Indonesia, which is hastening resource
extraction and negatively affecting the ability of many ethnic minorities to
hold onto their land and resources. 16 Furthermore, the legal uncertainties
that now surround the extraction of natural resources, particularly timber,
have provided opportunities for district-level leaders to engage in illegal or
extra-legal logging and to argue for their legality. These uncertainties about
jurisdiction and rights over forests currently prevent national level authorities
from enforcing national laws.
One of the most frequently cited negative impacts of decentralization has
been an expected rise in corruption throughout the country. Although Indonesia is well known for its corruption, prior to regional autonomy large-scale
corruption was limited to a small number of people in Jakarta and in provincial capitals, who had decision-making authority and family connections.
Decentralization now provides local elites with access to these income flows.
As one official in North Maluku noted corruption will be decentralized just
like everything else. The new power of regional officials, coupled with a
surge in income due to natural resource extraction, may prove a temptation
for many (Djogo and Syaf, 2003; Simarmata, 2002). Efforts by corrupt politicians to maximize their income could lead to policies that are detrimental to
the well-being of ethnic minorities, such as rapid forest conversion and the
alienation of their lands for large-scale development projects. Ethnic minorities could lose their land rights or use rights as enterprising individuals sell
them to the highest bidder. Whether the total amount of corruption has actually increased since decentralization remains a matter of debate. 17 Public
perceptions about the correlation between decentralization and corruption
vary throughout the country. The general consensus in North Halmahera is
that the amount of corruption has remained approximately the same, but it
is significantly more visible now as it is going to local people who spend
it on conspicuous consumption. A popular joke explains that the acronym
DPR, which stands for Dewan Perwakilan Rakyat (Peoples Consultative Assembly) actually means they improve their houses (North Moluccan Malay,
dorong perbaiki rumah). The joke refers to the large amount of expensive
home improvements that virtually all members of the DPR-D have had made
16. For a good description of this frontier atmosphere and its effect on local communities, see
Tsing (2004: 3345).
17. Studies on corruption undertaken since decentralization have focused on perceptions of corruption (World Bank, 2003a: 47) or on narrow aspects of corruption that do not necessarily
apply to the more rural districts where most indigenous ethnic minorities live (Henderson
and Kuncoro, 2006).

Regional Autonomy and Decentralization in Indonesia

725

since they were elected, many of them well beyond the means of their official
salaries.
Bureaucrats in Indonesia have shown a tendency to put their own interests
above those of their constituents, particularly the most marginalized ones.
As regional assemblies (DPR-D) have more independence and more control
over their finances they can allocate money as they see fit. For example in
the district of West Lombok, the government allocated more than 3.3 billion
rupiah (approximately US$ 350,000) towards the purchase of luxury cars and
motorbikes for district officials in fiscal year 2002. In contrast, they allocated
no money towards village development funds, because they forgot about it
(Mawardi et al., 2002: 11). This type of corruption hurts ethnic minorities,
as well as others, in that they tend to live in more rural areas, which are
usually the first to lose services as budgets are adjusted to pay for the perks
of local bureaucrats. Thus even if the profits from corruption are invested
locally, they are not helping rural ethnic minorities. The money that corrupt
officials use for conspicuous consumption, home improvements, or travel
may help the incomes of carpenters and other urban tradesmen, but it rarely
reaches the ethnic minorities in the rural hinterlands whose lands and forests
are often what generated those funds.
Elected members of the DPR-D and the district head/mayor can get away
with corruption and at times govern against the best interests of their constituency for several reasons. The continuing predominance of political parties in the electoral process, as stipulated in the decentralization legislation,
virtually ensures that candidates are more accountable to their party than to
their constituency. In elections for regional assemblies, there are no independent candidates. People may vote for an individual from a particular political
party seeking to be elected to a regional assembly, but the political parties
control, to a certain degree, how these votes are apportioned and which candidates are installed. 18 Although the district leader is now directly elected,
he must have the support of a recognized political party to run for office.
Obtaining such support can be very expensive and requires large amounts
of capital. Businesses leaders and others often provide this capital but then
expect favouritism (appointments to lucrative posts, state contracts, and so
on) once the candidate has been elected. The subsequent debt to these businessmen and others can prevent district heads from implementing reform or
removing corrupt leaders. Individuals who have widespread support outside
of political parties may be excluded from contesting elections simply because they cannot afford to purchase the nomination from a political party.
Furthermore, political parties are not likely to select candidates who might
implement reform or try to curb corruption.
Hadiz (2004b: 620) points out that the continuing prominence of political parties has allowed many old national and local predatory elites to
18. See IFES Indonesia (2003) for a detailed explanation of how seats in the regional assemblies
are distributed by votes and by parties.

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Christopher R. Duncan

re-position themselves in local politics. Thus many of the new regional officials (district-heads and mayors) as well as members of district-level assemblies are career civil servants that were nurtured under the predatory
and corrupt New Order system (Hadiz, 2004b: 621; Malley, 2003). Now
that the opportunities are more lucrative, it is unlikely that these individuals
will change their often corrupt ways (Hadiz, 2004a, 2004b). Furthermore,
the continuing dominance of political parties often works against the interests of small-scale minority groups. During the New Order, political parties
were dominated by an urban-based elite as they were only allowed to be active at the district level and above. Rural-based indigenous minorities were
represented inadequately, if at all, in these political parties (or in civil service bureaucracies) and many continue to be under-represented. This lack of
connections with established political parties and existing bureaucracies has
hindered their ability to take part in the new political environment created
by decentralization. Moreover, Indonesian bureaucrats, as well as districtlevel political elite, generally look down on indigenous ethnic minorities as
primitive people who need to be brought into the mainstream and the
bureaucrats believe they know how best to achieve this goal.
New Districts and the Rise of Localism

Outside of the fiscal and corruption issues raised above, one immediate
result of decentralization has been a drastic increase in the number of districts across the archipelago. Prior to 1999 there were approximately 168
districts and municipalities in Indonesia; by November 2004 that number
had increased to over 440 with many more on the drawing board. As districts become smaller, local minorities will have a larger say in policy decisions, and play greater roles in local government. They may even become
local majorities. This new majority status can have serious ramifications
for other ethnic and religious groups in the district. Many people on the
local level throughout the archipelago have interpreted regional autonomy
to mean giving priority to local people in a district at the expense of outsiders, whether migrants or smaller ethnic or religious groups. New indigenous majorities can pass legislation that ignores migrants, or in some
cases attempts to remove them (Rawski and MacDougall, 2004). In some
places, local people have begun to argue that only sons of the region (putra
daerah) should be given political office or coveted administrative positions,
in essence condoning ethnic discrimination (von Benda-Beckmann and von
Benda-Beckmann, 2001: 78; Fatah, 2005; Li, 2002). For example, in the district of North Halmahera it is difficult for individuals of Ambonese descent
(Ambon being the former provincial capital) to become the heads of districtlevel offices (kepala dinas), which are powerful and potentially lucrative
positions.

Regional Autonomy and Decentralization in Indonesia

727

Many of the new districts have been drawn along ethnic lines and some
observers are concerned that local politicians will manipulate and exacerbate ethnic tensions for their own political gains (International Crisis Group,
2003: 45). Van Klinken (2002) refers to this process as the rise of ethnic
elites, local politicians who often use ethnic sentiments and claims on local tradition to get themselves elected (cf. Aragon, 2007; Bubandt, 2004).
Once elected, however, these new leaders often turn out to be equally corrupt
as those they replaced, and just as dismissive of the concerns of ethnic minorities, even if they come from the same ethnic group (Eindhoven, 2007).
Some commentators see the rise of new districts as a major cause of conflict within districts as these ethnic groups compete over political power and
control of natural resources (Aragon, 2007). Others fear that redistricting
could lead to conflicts between districts over claims to resources and their
associated revenue streams. Scholars have blamed such disputes for the outbreak of communal violence in Central Sulawesi, West Sulawesi and Central
Kalimantan (Aragon, 2001; International Crisis Group, 2005; van Klinken,
2002).
Ironically, regional autonomy has been touted as a panacea to ease these
ethnic tensions. As local people begin to play a larger role in regional governance they can also play a larger role in conflict resolution (Laksono and
Topatimasang, 2003; Permana, 2002). Newly empowered regional elites and
stronger village leaders now have the ability to try and solve regional conflicts using local custom (adat) and local forms of conflict resolution. These
local forms of conflict management had been weakened, if not dismantled,
during the Suharto regime and replaced with authoritarian military rule. With
a better understanding of local issues and local cultures, regional officials are
better placed to adjudicate disputes than members of the armed forces who
often come from other parts of the country and have their own interests. Furthermore, as decentralization makes local officials more accountable to their
constituents, they are more likely to seek a peaceful resolution to conflicts.
For example, the Tobelo in eastern Indonesia are hoping that a revival of adat
and its inclusion in local decision-making processes will help prevent the outbreak of future conflict in that part of Indonesia. Many Tobelo leaders believe
that New Order government policies created the religion-based tensions in
the region that allowed communal violence to break out in 19992000. They
are hoping that this turn to adat will facilitate reconciliation between the
warring parties. However, adat also has the potential to exacerbate tensions.
The use of adat for conflict resolution can pose a problem in heterogeneous
regions that contain multiple indigenous ethnic groups, as well as migrants
(Acciaioli, 2002). Decisions regarding which adat system to prioritize can
create conflict among competing indigenous groups. Additionally, migrants,
many of whom often lack valid adat-based claims to their land, are unlikely
to submit their resource claims to indigenous power structures from which
they are excluded.

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Christopher R. Duncan

CONCLUSION

It is too early to draw conclusions about the long-term effects of decentralization on ethnic minorities. In places where the legislation has been put into
practice, it has been done in a rather ad hoc and unplanned manner. For now
the results are somewhat mixed. Some ethnic minorities have fared rather
well, using the opportunities presented by regional autonomy to retain their
land and in some cases to regain land that had been lost under the previous
government. To a large degree the impact of decentralization depends on the
group in question. A number of factors determine how groups are affected
by the new legislation and its implementation, including the potential of their
natural resource base, their levels of political organization, and the ability of
local leaders to work effectively and honestly within the new political frameworks created by regional autonomy. An ethnic groups ability to manoeuvre
in this new political system and to engage with the new constellation of political actors at the district level will determine whether they improve their
situation, maintain the status quo, or lose ground. So far, the new system
has favoured those groups that were well integrated into the political system
prior to regional autonomy (Hadiz, 2004b; Malley, 2003). Many small-scale
indigenous groups were not part of that system. Groups that remain unorganized, or under-organized, such as the Punan or the Forest Tobelo, might not
fare well with the new political and fiscal arrangements. Decentralization
has often served simply to consolidate and entrench district level bureaucrats and party officials that were nurtured under the New Order regime.
These individuals ignored the concerns of indigenous ethnic minorities in
the past and, unfortunately, it appears as though they will continue to do so
in the future. This continued lack of accountability among district leaders,
members of the DPR-D, and civil servants remains the largest problem facing
indigenous ethnic minorities in a decentralizing Indonesia.
Acknowledgements

An earlier version of this article was presented at the conference Impact of

Globalization, Regionalism and Nationalism on Minority People in Southeast
Asia at the Social Research Institute, Chiang Mai University; I would like
to thank participants for their comments. The research was funded at various
points by a Research and Writing Grant from the John A. and Catherine T.
McArthur Foundation, and the Anthropologists Fund for Urgent Anthropological Research, in co-ordination with the Royal Anthropological Institute
and Goldsmiths College, University of London. My research in Indonesia
was sponsored by LIPI, Universitas Sam Ratulangi and Politeknik Perdamaian Halmahera. I would also like to thank two anonymous reviewers for their
suggestions for improving the paper.

Regional Autonomy and Decentralization in Indonesia

729

APPENDIX
Table A1. Revenue Sharing from Natural Resources According to Law
33/2004 (Percentage of Revenues Shared between Central, Provincial and
District Governments)

Item
Oil (after tax and levies)
LNG (after tax and levies)
Mining: land rent
Mining: royalty
Forestry: land rent
Forestry: resource rent
Forestry: reforestation
fund
Geothermal mining

Producing Other District Allocated for

Central
Provincial
District
Governments Elementary
Government Government Government in Province
Education
84.5%
69.5%
20%
20%
20%
20%

3%
6%
16%
16%
16%
16%

6%
12%
64%
32%
64%
32%

6%
12%

32%

32%

0.5%
0.5%

60%
20%

16%

40%
32%

32%

Note: Funds allocated for elementary education are divided between the province, the producing district
government and other districts in the province.
Source: Law 33/2004 on the Fiscal Balance between the Central Government and the Regional
Governments: articles 1121.

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Christopher R. Duncan is Assistant Professor in the Department of Religious Studies and in the School for Global Studies at Arizona State University
(PO Box 873104, Tempe, AZ 85287-3104, USA). His current research examines communal violence in eastern Indonesia. He is the editor of Civilizing
the Margins (Cornell University Press, 2004).