The portion of local income (PAD) is still below the fund transferred from the central government. This is among the reasons
Jakarta (ANTARA) - The government has yet to revoke the moratorium on regional expansion since several new autonomous regions (DOB) established during the 1999-2014 period were unable to become financially independent, Vice President Ma'ruf Amin stated.

"In connection with the government's policy regarding regional expansion, the moratorium would stay," Amin noted in a statement here on Friday.

An evaluation conducted by the government and the State Audit Board (BPK) in 2019 showed that majority of the 223 new autonomous regions (DOB) still relied on funding sourced from the state budget (APBN).

Moreover, local income is too low as compared to the state budget fund. "The portion of local income (PAD) is still below the fund transferred from the central government. This is among the reasons," the vice president explained.

The vice president’s spokesman, Masduki Baidlowi, stated that the unfavorable fiscal condition has currently become another reason for the government to maintain the moratorium.

"After the Indonesian economy recovers, the government will review the proposal of regional expansion," he added.

"Our fiscal capacity has contracted deep. Hence, it is impossible to revoke the moratorium. Therefore, we decided to maintain the moratorium until the Indonesian economy recovers from the crisis," he stated.

An evaluation conducted by the Home Affairs Ministry also showed that regional fiscal capacity had yet to reach its target.

"According to an evaluation of the Home Affairs Ministry, more regions have become increasingly dependent on the funding sourced from the state budget," he stated.

The government is still imposing a moratorium on regional expansion. It highlighted the need for a comprehensive study and analysis in preparing for a regional expansion since huge sums of money, reaching some Rp300 billion, will be required per district and municipality for establishing a new DOB.

The Home Affairs Ministry noted that almost 80 percent of the budget for 514 districts and municipalities in Indonesia are sourced from the central government's budget.

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