Bisnis.com, JAKARTA – Article 33 Indonesia research concludes that the village fund transfer formula currently used by the government has not been able to achieve the goal of reducing disparities between villages.
Village fund transfers use the 90:10 scheme. With this formula, 10% of total village funds are allocated equally, as the basic allocation. The remaining 90% is allocated taking into account population size, poverty rate, area area and construction cost index.
"This is where problems arise related to the formulation of village funds, one of which is related to the unfair allocation of village funds to villages in need," said Santoso, Executive Director of Article 33 Indonesia, on the sidelines of the themed Policy Discussion Village Funds and Village Development, Tuesday (6/12/2016).
According to him, the allocation using the 90:10 scheme means that village fund transfers between regions are not much different so that transfers do not take into account the level of progress and the region's ability to collect funds (fiscal capacity).
Santoso reminded us of the need to consider the objectives of the village fund policy, namely improving welfare and equitable development of villages, advancing the village economy, overcoming development gaps between villages, and strengthening village communities as development subjects.
The words "village community" in this objective indicate that village funds primarily aim to advance village residents as development subjects. "This goal will then guide what kind of indicators are better used to channel village funds to each region."
Santoso said that village fund formulations need to be made according to individual needs so that the village funds received can be absorbed well and contain principles of justice for villages that still need development and empowerment.
This, he said, could be done by considering the fiscal capacity and fiscal needs of each village.
Fiscal capacity includes regional income seen from local original income, profit sharing funds, and general allocation funds. Fiscal needs include considerations of area size, population and number of poor people.
According to him, regional clusters need to be created according to the level of progress or level of need of the village for village funds. Clusters can be created simply by grouping based on the Village Development Index or using population.
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