1. PRINCIPLES OF LOCAL GOVERNANCE

2. PRINCIPLES BASED ON UUD 1945 BEFORE AMENDMENT Locality – Indonesia is divided into large and small local governance; – Local reffer to society as a unity of law. Democratic Deliberation – Governance based on democratic deliberation as a process of decicion making; – Formed local representative body. Respect to the Local Originality – Respect pluralism – Special local government. Administrative Governance – As a agent of central government  Region

3. PRINCIPLES BASED ON UUD 1945 POST-AMENDMENT Locality and Hierarchy – NKRI divided into provinces, each province divided into kabupaten and kota. – Every single province, kabupaten and kota have their own local governance. Democracy – Every local governance have representative bodies which members is elected through general electionl. – Every chief of local governance popularly elected. Local Autonomy – Every local governance regulate and manage their own bussines based on autonomy and medebewind principles. – They have the widest autonomy except the bussines that difinited as central bussines by the Act. Local Regulation – Have the right to make by law and other regulation to perform autonomy.

4. THE PHILOSOPHY OF LOCAL AUTHONOMY Local Governance for Increase public welfare democraticly; Every single local authority shall create welfare and democracy; Public welfare through public services (basic services and core services);

5. WHOSE AUTHORITY? Externality: Who bear Impact? Accountability: Who Closest to the impact and more accountable? Efficiency  Which more efficient?

6. UU No. 32/2004 BACKGROUD: – Problem of Hierarchy – Problem of Authority – Problem of Employment – Problem of Election of Chief Local Government.

7. Principles of Authority based on UU No. 32/2004 Central Authority:  Absolute Authority – Foreign Affairs – Defence – Security  Residual Theory – Judicial – Moneter and Fiscal – Religion Local Authority: – Obligatory – Optional – Concurent  sharing bussines

8. OBLIGATORY AUTHORITY Planning and restraining development; Planning and controlling spatial planning; Perform Public order; Supplying public infrastructure; Healtcare; Education dan Human Development; Solving social problem; Facilitate Micro-entrepreneur; Restraining Enviroment; Demography and civil services; Public Administration; Investment; Basic Services.

9. OPTIONAL AUTHORITY Riil and Potential for increasing public welfare due to the local condition, i.e: – Farming; – Mining; – Fisheries; – Plantation; – Forestry; – Tourism; – Etc.

10. Obligation of Local Government Protecting and Guarding NKRI; Develop democratic society; Perform justice and equity; Increase healt service; Fullfil public services; Develop Social Insurance; Set up spatial planning; Concerve Environment; Etc....

11. Rights of Local Gov. Regulate and Govern their Own Bussines; Elect the chief; Govern the Employment; Manage Assets; Local Fiscal and Restribution; Get fund sharing from natural resources; Etc.

12. LOCAL BUDGET PAD (Local Revenue) Sharing/Balance Fund: Sharing fund; – General Alocation Fund (DAU); – Specific Alocation Fund (DAK).