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POLITICS, GOVERNMENT AND SECURITY
How Politics, Budgetary Institutions, and Corruptions Shape Budget Problems in Indonesian Local Governments
Sugiyarto University of Canberra Abstract: Budgeting is a substantial economic and political decision making process for governments. A budget is the life-blood of a government (Wildavsky 1961) because it authorizes what the government intends to do and expects to do during a certain period (Hagen & Harden 1995). However, many governments developed countries and developing countries experience budget problems. Existing literature suggests that budget deficits, budget delays, budget policy volatility, and underspending budget appropriations are some typical budget problems. Scholars propose some factors that can be clustered into politics, economics, budgetary institutions, human resources conditions, and corruptions and anti-corruption programs to predict budget problems. However, scholars neglect the understanding of local budget actors on how those factors (politics, economic, budgetary institutions, human resources conditions and corruptions) shape budget problems in Indonesian local governments. This research aims to fill this gap. Using an interpretivism paradigm, this research aims to understand the real-life experiences of budget problems from the perspective of local budget actors in Indonesia, by borrowing and combining the underlying logic from other context, and adapting to the local context in the Indonesian local government environment. Deploying semi-structure interview and document analysis of three selected cases, this research finds that budget approval delays and budget execution delay are the main budget problems experienced by local governments in Indonesia. Those budget problems lead to underspending budget appropriations problems. Participants argued that politics and budgetary institutions are the main reasons of budget approval delays. Meanwhile, fears and worries to execute the budgets due to corruption cases, financial administration challenges, human resources challenges, geographic and natural challenges, and fiscal transfer challenges are the reasons of budget execution delays on top of budget approval delays. This research contributes to the academic debate on the institutionalism theory. This research shows how institutions do matter in government policy, especially in local budget. The institutional structure for budgeting in Indonesian local government is designed to ensure contest between the executive and the local council. This research finds that at the heart of this structure, in fact, there are three main groups of local budget actors. Those are the elected local executive leader as the executive, the elected politicians in the local council as the legislature, and civil servants as the bureaucracy. Normatively, the role of the bureaucracy is to prepare the local planning, combined with the visions and mission of the local executive leader. The role of the Local Council members is to scrutinizes the budget proposal. Some positivist scholars introduced divided government and party polarization to predict budget delays. However, this research finds that the bargaining over financial resources among fragmented local budget actors is the main driver of budget approval delays across the three cases. Each individual budget actors are in fact potential veto players. Political cost and private cost of each budget actor, instead of ideological, drive polarization among those budget actors. 2
An Analysis of Indonesian Government Capabilities in Countering the Social NetworkBased Terrorist Funding and Financing
Sylvia Windya Laksmi The Australian National University Abstract: The expansion of global terrorist movement is conclusive evidence in explaining the issue of terrorist network which was grown and adapted rapidly nowadays. Terrorism became a core agenda in international security area because of its significant threat to the world peace. This international phenomenon occurred because of the financial support provided in supporting their brutalized and barbarity actions. Financial aspect has become the heart of terrorism. According to the International Convention for the Suppression of the Financing of Terrorism, terrorist fund is defined as “assets of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets, including, but not limited to, bank credits, traveller’s cheques, bank cheques, money orders, shares, securities, bonds, drafts, letters of credit”("International Convention for the Suppression of the Financing of Terrorism," 1999), used to support operations and violence. In addition, the money could also be used for training costs, accommodation, explosive material, weapon purchasing, propaganda efforts and the recruitment program (Giraldo & Trinkunas, 2007). Recently, the Indonesian Government is facing a high tension of terrorism and terrorist financing. In response to this issue, Indonesia intensified the Counter-Terrorist Financing policy by conducting financial network monitoring mechanism in order to control flow of fund and purpose of using them. However, the investigation process on terrorism financing cases also faced some obstacles. This was reflected on the low number of terrorist financing conviction and the low amount of terrorist’s asset forfeiture. Based on the recent development of terrorism financing trend, it is necessary to improve the countermeasures by applying a social network framework in analysing the problem. The analysis would target and profile the individual organised crime figures. By mapping the structure of group’s network, the investigators could allocate the resources to counter the organisation. Thus, they could also design appropriate regulations and controls (Sparrow, 1991). Moreover, the result could also be used as a tool to predict future strategy to combat the terrorist network (Koschade, 2007). According to those issues, both on the improvement of social network-based terrorist financing and the inability of government to tackle them, it is important to have further analysis on the opportunities of applying new approach to counter the new trend of terrorist funding and terrorist financing context. This research would seek further understanding in the social network-based terrorist funding and financing. Then, it would promote an improvement in the strategy on how the government is capable of preventing and combating the crimes. By measuring the interaction among indicators and considering several moderating or contingency factors, this analysis framework then finally could influence the future policy implementation. The analysis would be limited to the Indonesian context.
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ECONOMICS AND DEVELOPMENT
The Impact of Electricity Interruptions on Micro-, Small-sized Manufacturing Enterprises (MSEs) in Indonesia: A Pseudo-panel Approach
Anna Falentina The Australian National University Abstract: Indonesia is struggling in providing reliable and sufficient electricity supply. It is among the lowest rank in easiness to get reliable electricity supply. In this paper, we estimate the impact of electricity interruptions on micro-, small-sized manufacturing enterprises (MSEs) performance. Our analysis utilizes repeated cross-section data on MSEs and creates a pseudopanel data covering 21 regions of PLN during 2004-2015. We use an instrumental variable approach while controlling for covariates, cohort fixed effects and clustering the standard errors. Our estimates suggest that electricity quality matters. Electricity interruptions have induced economic loss of MSEs of around 0.31 to 0.55 percent. Keywords: electricity interruptions, SAIDI, micro- small-sized manufacturing enterprises, Indonesia, pseudo-panel
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The Relationship Between Company’s Financial Performance and Environmental & Social Performance: An Empirical Study on Indonesian Listed Companies and SOEs
Cacik Rut Damayanti University of Canberra Abstract: Increase in population growth and the rapid rise of industrialization caused severe pollution and environmental problems in Indonesia. Industrial pollution contributed 25%-50% of water pollution in Java and environmental degradation caused the reduction of forest areas in Sumatra and Borneo at the rate of 3.4 million hectares per year. In order to tackle the environment problems, the Indonesian government created PROPER (Program for Pollution Control, Evaluation and Rating) in 1995 and implemented Corporate Law no 40/2007 Article 74 as well as Investment Law no 25/2007 Article 15 in 2007. Those two regulations require all corporations to perform their environment and social responsibility. However, the enactment of those regulations created a conflict between the government and the business communities. Some companies argue that the implementation of the regulations creates additional burden to companies because it increases their cost, reduces their net profit and loss their competitiveness. Also, the theories on environmental issues suggest that it can help increase companies’ profit as well, but with no conclusive empirical evidence. An empirical study providing applied evidence in this context may help minimize the conflict between the government and the companies. To fill this gap, this study aims to investigate the influence of the new regulations on the companies’ ESP, based on the performance color compliance level (code) maintained by the PROPER, as well as to examine the interrelationship between regulation on environmental and social performance (ESP) to the companies’ financial performance.
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Does Export Experience Improve Firm Performance? Evidence from Indonesia
Deasy Damayanti Putri Pane The Australian National University Abstract: “Learning-by-exporting” hypothesis suggests that once a firm enters foreign markets, its productivity will increase thanks to exposure to knowledge and experience from abroad. If learning mechanism works, does the performance keep increasing throughout the years of exporting? Using Indonesia’s firm level data from 2000 to 2012, this study scrutinizes the learning process of exporters by incorporating “export age” in the model. I find that the exporter's total factor productivity increases with exporting age, but not linearly: it is significant only until a certain year of exporting and turns insignificant afterward. I also find that exporters that are relatively large in size and those engaged in particular industries have clearer learning process. However, even though export experience can boost productivity, it is only applicable for firms that have high productivity from the beginning, a support for “self-selection” hypothesis.
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ENVIRONMENT AND TECHNOLOGY
Australian Alpine Seed and Seedling Ecology, Conservation and Management in the face of Climate Change
Annisa Satyanti The Australian National University Abstract: Alpine ecosystems and their plant communities worldwide have been identified as vulnerable to a changing climate. Critical gaps in our knowledge of alpine plant seed ecology in Australia and elsewhere are becoming apparent and have important implications for our ability to predict and manage biodiversity in the face of climate change. In Australia, only 0.15% of the landmass is alpine, but this area is home to 212 plant species, including 30 exclusively alpine and 21 endemic species. Plant responses to a changing climate will depend on their potential to recruit in-situ or migrate upwards, both of which are inherently dependent on establishment from seed. Plant population dynamics and future distributions will therefore be significantly affected by seed and seedling ecology. In Australia, where the alpine region extends across an elevational range of just 400 m, understanding the scope and potential of alpine plant migration is crucial. A more nuanced understanding of the regeneration stages from seed to seedling in our changing climate is needed. Here I outline several areas of investigation of Australian alpine seed and seedlings currently underway at the Australia National University and Australia National Botanic Gardens for my PhD project. The project includes several quite diverse experiments: 1) to examine the drivers of within-species variation in germination strategy in a single widespread species, 2) to simulate future climates and aims to tease apart the effects of changes in seasonality and temperature on germination and establishment traits of 40 species with different germination strategies, 3) to examine transgenerational effects of warming on germination and seedling growth and 4) a large assay of drivers of longevity in 70+ species. The studies described here will better inform our understanding of the germination niche and requirements of alpine species, and how dormancy and germination will change in a warming climate with altered patterns of seasonality. This knowledge will contribute to improved understanding of alpine seed and seedling ecology with both applied and pure ecological and evolutionary relevance to Australia and will make a substantive contribution to our global understanding of alpine plants.
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Insights from the Traditional Fishing Community of Jakarta: Looking Through the Vulnerability Lens
Amanda Putri University of New South Wales Abstract: The traditional fishing community in Jakarta has relied on the Jakarta Bays' fishery resources for decades. In addition to being among the poor and the marginalised within the society, this community's daily livelihood is under pressure of environmental stressors. Water pollution, as one of the most significant stressors, has contributed to the degradation of the resources in Jakarta Bay that in turn affected the livelihood of this community. This paper demonstrates how the concept of livelihood vulnerability was used to better understand the susceptibility of different occupational groups (traditional fishers, mussel farmers, and informal workers) to water pollution. Biophysical and participatory approaches were combined in performing the vulnerability assessment. Water quality data, consisted of 12 parameters from 23 sampling points, from the period of 2001-2013 were used to define the level of water pollution across the Bay and estimate the exposure on the groups. Participatory activities (questionnaire survey and community workshop) were conducted to 286 households in the fishing villages of Muara Angke and Cilincing to obtain useful information on their livelihood, fishing activities, and environmental knowledge. The findings suggest that the fishing community was not necessarily the poorest in terms of their livelihood capacity. Yet, they were found the be the most vulnerable (in particular the mussel farmers group) to water pollution, as a result of their high exposure to water pollution and high dependency on fishery resources. This vulnerability perspective contributes to the understanding about how the improvement of wellbeing, particularly for the traditional fishing community, might be less effective without considering both the environmental stressor and their livelihood characteristics. Understanding on how different groups within a society could be differently vulnerable to and affected by environmental stressor such as water pollution is also important for developing more targeted solutions and management options to reduce their vulnerability.
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Specificity in fungal symbiont affects the distribution of endangered terrestrial orchid species in Australia Fitria Tisa Oktalira The Australian National University Abstract: Many orchid species have been reduced to extremely small population and at the edge of extinction. Their limit distribution ranges are disturbed by human activities as well as the availability of fungal partner that are needed during germination and establishment. In this study, we conducted the research by integrating DNA sequencing to assess the diversity of fungal partners and symbiotic seed germination to reveal the mycorrhizal specificity during germination. We used pairs of rare-common species in order to compare the mycorrhizal specificity between the rare and common species. The result showed that one rare orchid indeed associated with fewer fungi than the common one, whereas the other rare fungi could associate with as many as the common one. This result presented here suggest that mycorrhizal specificity does exist and contributes to orchid rarity. Our data here would give a useful insight for successful ex situ propagation effort in orchid conservation program. This result will not only applicable for Australian orchid, but also can be applied to other region around the world, including Indonesia. Given the numbers that about 15% of a whole numbers of orchids of the world are in Indonesia and about 800 of them are noted as protected species, the outcome of this research will gain the awareness to protect and conserve those orchids for biodiversity richness in Indonesia.
Key word: Conservation, rarity, rare, common, Australia
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SOCIAL, CULTURE AND TECHNOLOGY
Social Capital Based on Faith and Employment: a Study of Graduates from Traditional Islamic Boarding Schools (Dayah) in Rural Aceh, Indonesia.
Nanda Riska University of Canberra Abstract: This study reviews the ways in which graduates from traditional Islamic boarding schools (dayah) in Aceh use social capital to help gain employment. Dayah are rural-based, nonformal and traditional educational institutions. The curriculum in dayah is exclusive to teaching classical Islamic texts and excludes general subjects. Consequently, graduates are faced with challenges in finding employment because of the lack of formal education and their specialised knowledge and skills that are limited to classical Islam. Therefore, dayah graduates do not receive formal recognition of their education. For dayah graduates, this means that they are strictly ‘off the grid’ when applying for jobs, considering almost all jobs require a formal educational qualification. Thus, the likelihood for graduates to secure employment has been small. Therefore, the aim of this study is to explore other means of finding employment by dayah graduates; that is through social capital based on faith – as in social networks and support built during their time in dayah. While recognizing dayah’s contribution towards the development of graduates’ social capital based on faith, this study urges dayah to improve their education while preserving the traditions, to allow their graduates wider employment options that can address economic well-being. Keywords: social capital, Islamic education, dayah, Aceh.
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The Practice of Formative Assessment by English Language Teachers in Secondary High Schools in Indonesia
Maya Defianty University of Canberra Abstract: Formative assessment is the process of collecting evidence of students’ progress that constitutes three elements: process, feedback, and subsequent decision for instruction. Studies reveal that overall, formative assessment enhances teaching and learning. As this notion has become well-recognized, many countries have started to implement formative assessment into their assessment policies. As in these countries, in Indonesia, the government began to implement formative assessment in the current curriculum, Kurikulum 2013 (2013 curriculum, hereafter K13). Nevertheless, applying formative assessment in Indonesian context is still challenging for some teachers in Indonesia. In light of the great value of formative assessment, providing examples or models of how formative assessment can be implemented is highly crucial. This research aims to investigate how K13 teachers implement formative assessment and to identify teachers’ perceptions of formative assessment. This research is designed using qualitative multiple case study approach. It involves eight cases, and data was collected from interviews, documents, and observations.
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The Chinese Can’t Own Land: Is that what makes Yogyakarta special?
Bayu Dardias The Australian National University Abstract: Since 1975, non-indigenous Indonesians, including Indonesian citizens of Chinese descent, have been restricted from owning land in Yogyakarta. Prohibition on land ownership based on ethnic identity is not the case throughout other provinces of Indonesia. This article addresses why this racially discriminative policy continues to exist in Yogyakarta. I argue that there are three factors behind this discriminatory policy’s continued implementation. Firstly, the continued adherence to colonial era racial regulation in Yogyakarta has its origins in Chinese support of Dutch forces during the independence struggle. Secondly, the poor implementation of the Basic Agrarian Law (No. 5 1960) in Yogyakarta has resulted in ambiguous sources of authority concerning land acquisition. Thirdly, the dominance of traditional political elites in Yogyakarta have emphasized the importance of regulation prohibiting non-indigenous Indonesians from owning land. Keywords: Yogyakarta, Chinese, land discrimination, Hamengku Buwono, Paku Alam.
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