improving public service delivery and financial management...

AImproving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

Improving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

South Sulawesi Public Expenditure Analysis 2012

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World Bank Offi ce Jakarta

Indonesia Stock Exchange Building, Tower II, 12th-13th Fl.Jln. Jenderal Sudirman Kav. 52-53Jakarta – 12190Phone (+6221) 5299 3000Fax (+6221) 5299 3111www.worldbank.org/id

Printed in November 2012

The photos in this report are Copyright © Guntur Sutiyono for center photos on the front cover page, and on the Executive Summary, Chapter 4 and Chapter 5, the right photo on the front cover page, Chapter 1, Chapter 2 and Annex page are Copyright © Bastian Zaini, Copyright © the World Bank for the left photo on the front cover page, Chapter 3 and Chapter 6, and Copyright © Governance and Decentralization Survey 2 for the photo on Chapter 7.

South Sulawesi Public Expenditure Analysis 2012. Improving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia, is the result of a collaboration of a research team from Hasanuddin University, Government of South Sulawesi, and the World Bank staff . The fi ndings, interpretations, and conclusions expressed herein do not necessarily refl ect the views of the Board of Executive Directors of the World Bank or the government they represent.

The World Bank does not guarantee the accuracy of the data included in this document. The boundaries, colors, denomination and other information shown on any map in this report do not imply any judgment on the part of the World Bank regarding the legal status of any territory or the endorsement of acceptance of such boundaries.

For further information regarding this report, please contact Bastian Zaini ([email protected]).

This report is printed using recycle paper

Improving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

South Sulawesi Public Expenditure Analysis 2012

ii South Sulawesi Public Expenditure Analysis 2012

Acknowledgement

South Sulawesi Public Expenditure Analysis 2012 is a collaborative eff ort of South Sulawesi Government, the Research Centre for Policy and Management of Development or Pusat Penelitian dan Pengembangan Kebijakan dan Manajemen (P3KM) Hasanuddin University, and the World Bank with support from donors CIDA and AusAID. We would like to thank the research team, led by A. Madjid Sallatu, with Agussalim, Darmawan Salman, St. Bulkis Oesman, Budimawan, Rahim Darma, Nursini, Sultan Suhab, A. Tawakkal, Muhammad Yunus, and Djunaidi M. Dachlan as members. We would like to extend our gratitude to P3KM data team that consists of Sanusi Fattah, A. Amrullah, Abdullah Sanusi, A.Nixia Tenriawaru, and A. Abdul Azis Ishak. The research by P3KM was coordinated by Djunaidi M. Dahlan, assisted by Agussalim as secretary, and Nursini for administration support. The World Bank team was led by Guntur Sutiyono and Bastian Zaini, assisted by Erryl Davy, Ihsan Haerudin, Indira Maulani Hapsari, Chandra Sugarda, Andhika Maulana, and A. M. Rezky Mulyadi. Our profound gratitude is also dedicated to Luna Vidya for coordinating communication activity under PEACH in South Sulawesi.

This report would not be successfully completed without support and commitment from Project Management Committee (PMC) who have actively provided valuable inputs and feedbacks throughout report preparation; also from SKPD offi ces at district/municipality level in South Sulawesi province that has contributed on data collection process. The team would also like to express our gratitude and appreciation to the Head of South Sulawesi Bappeda, Mr. Tan Malaka Guntur, who is also the Chairman of PMC, for his relentless support. Our appreciation and gratitude extended to the Head of South Sulawesi Economic Bureau, Mr. Muhammad Firda who is also the PMC secretary, and Mr. Rusmin from PMC.

Overall guidance was provided by Gregorius D.V. Pattinasarany as Senior Economist and Task Team Leader of the World Bank Team. The team also acknowledges valuable contribution from our colleagues in the World Bank, Cut Dian Rahmi Agustina, Ahmad Zaki Fahmi, and other colleagues from the World Bank and CIDA for their positive input and feedback. We also would like to thank Sarah Sagitta Harmoun for the logistic support. Last but not least, we would also like to acknowledge Caroline Tupamahu and Yayasan BaKTI for their facilitation to PEACH during the project in South Sulawesi.

iiiImproving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

Preface

South Sulawesi is a province that plays important role in Eastern Indonesia. Its capital, Makassar, has been the heart of trade and distribution in this region for generations. For many years, South Sulawesi is also one of the major food estates in Indonesia, with main products such as rice, maize, and cocoa. Nowadays, South Sulawesi is rising up with its cattle and seaweed production. In the last fi ve years, South Sulawesi has benefi ting a higher than national economic growth. The rapid growth is mainly driven by Construction, Financial Services, and Transportation sectors.

While enjoying high economic growth and larger fi scal capacity over the years, South Sulawesi is still facing several challenges in development, such as poverty. Basic services in education and health are also requiring works to increase Human Development Index substantially. Therefore, the South Sulawesi Government must put extra eff ort to optimize their potential. Economic growth will stimulate mobility; hence investment in infrastructure and basic services is essential.

This report is an eff ort to assist the South Sulawesi’s subnational governments in improving their public fi nancial management performance, improving the planning and budgeting quality, and fi nally contributing to regional development. The report was produced from strong cooperation between subnational governments in South Sulawesi, the Research Centre for Policy and Management of Development, Hasanuddin University (PSKMP-UNHAS), which was supported by CIDA, AusAID, and the World Bank. South Sulawesi Bappeda played an important role in facilitating the preparation of this report.

Hopefully this report will benefi t South Sulawesi’s subnational governments, the subnational governments elsewhere in Indonesia, and the central government by serving as a reference for eff orts to improve subnational public fi nancial management performance and the regional development process. In the future, the role of South Sulawesi will become more important, and we hope that this report can contribute to better and more eff ective sub-national public fi nancial management and governance.

DR. H. Syahrul Yasin Limpo, SH, MSi, MH Stefan G. Koeberle

GovernorSouth Sulawesi Province

Country Director, IndonesiaThe World Bank

iv South Sulawesi Public Expenditure Analysis 2012

Table of Contents

Acknowledgement ii

Preface iii

Table of Contents iv

List of Figure vi

List of Table viii

List of Box ix

List of Abbreviation x

Executive Summary 1

Chapter 1 Introduction 7

1.1 Subnational Growth 8 1.2 Subnational Economic Condition 9 1.3 Demographic and Employment Condition 13 1.4 Human Development Condition 16 1.5 The Direction of Long Term and Medium Term Development 18Chapter 2 Subnational Development Planning and Financial Management 21

2.1 National and Subnational Development Planning 22 2.2 Subnational Working Units (SKPD) and Development Planning 25 2.3 Community Discussion for Local Development Planning or Musyawarah Perencanaan Pembangunan (Musrenbang) 27 2.4 Development Planning and Subnational Budgeting 28 2.5 Subnational Financial Management and Performance Measurement 30 2.6 Findings from the Subnational Financial Management Analysis 33 2.7 Conclusions and Recommendations 35Chapter 3 Subnational Revenue 37

3.1 General Profi le of South Sulawesi Revenue 38 3.2 Own Source Revenue or Pendapatan Asli Daerah (PAD) 40 3.3 Balancing Fund 41 3.4 Other Revenues 43 3.5 Regional Financing 43 3.6 Conclusions and Recommendations 44Chapter 4 Subnational Expenditure 47

4.1 General Profi le on South Sulawesi Expenditure 48 4.2 Expenditures by Economic Classifi cation 49 4.3 Expenditures by Sector 50 4.4 Gender-related Expenditure in South Sulawesi 52 4.5 Conclusions and Recommendations 55Chapter 5 Analysis of The Strategic Sectors 57

5.1 Analysis of the Education Sector 58 5.1.1 Education Sector Expenditure 58 5.1.2 Output and Outcome Performance in the Education Sector 60

vImproving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

5.1.3 Analysis of Education Expenditure in Districts/Municipalities in South Sulawesi 63 5.1.4 South Sulawesi’s Free Education Policy 68 5.1.5 Conclusions and Recommendations 72 5.2 Analysis of the Health Sector 73 5.2.1 Health Sector Expenditure 73 5.2.2 Health Sector Outputs and Outcomes Performance 74 5.2.3 Analysis of Health Expenditure and the District/Municipality Level 76 5.2.4 The Free Health Policy 79 5.2.5 Conclusions and Recommendations 81 5.3 Analysis of the Infrastructure Sector 82 5.3.1 Infrastructure Sector Expenditure 82 5.3.2 Infrastructure Sector Outputs and Outcomes Performance 84 5.3.3 District/Municipality Analysis 87 5.3.4 Conclusions and Recommendations 89Chapter 6 Analysis of Prime Commodities 91

6.1 Agriculture Sector Expenditure 92 6.2 Output and Outcome Performance of Agriculture Sector 94 6.3 Maize 95 6.4 Cocoa 97 6.5 Cattle 99 6.6 Seaweed 100 6.7 Shrimp 102Chapter 7 Analysis of Specifi c Issues 107

7.1 Analysis of Poverty 108 7.1.1 A General Description of Poverty in South Sulawesi 108 7.1.2 Description of Poverty at the District/Municipality Level 111 7.1.3 Poverty Alleviation Policies in South Sulawesi 112 7.1.4 Conclusions and Recommendations 113 7.2. Analysis of Environmental Conditions 113 7.2.1 Expenditure on the Environment 114 7.2.2 Description of Environmental Conditions in South Sulawesi 115 7.2.3 Conclusions and Recommendations 116 7.3. Analysis of Gender Issues 117 7.3.1 General Description of Gender Issues in South Sulawesi, 117 7.3.2 Gender Issues in Coastal Areas 119 7.3.3 Conclusions and Recommendations 121Annexes 123

Annex A. What is the South Sulawesi Public Expenditure Analysis? 124 Annex B. Methodology Notes 125 Annex C. Matrix of Conclusions and Recommendations 126 Annex D. Budget Master Table 135

vi South Sulawesi Public Expenditure Analysis 2012

List of FigureFigure 1.1. Makassar is positioned right in the center of Indonesia 8Figure 1.2. South Sulawesi economic growth is increasing and higher than the national rate 9Figure 1.3. South Sulawesi per capita GRDP remains below national average 12Figure 1.4. Infl ation rate in South Sulawesi and national, 2005-2010 12Figure 1.5. Average South Sulawesi population growth is 1.3 percent 13Figure 1.6. Level of participation of work force in South Sulawesi, 2005-2010 14Figure 1.7. Female work force by sectors in South Sulawesi, 2009 15Figure 1.8. Open Unemployment Rate TPT) in South Sulawesi and National, 2005-2010 16Figure 1.9. South Sulawesi HDI tends to increase although still lower than the national average and not yet fully aligned with RPJMD target 17Figure 1.10. South Sulawesi HDI rank relatively lower compared to other provinces in Indonesia, 2009 17Figure 2.1. Consistency on development process and stages of the planning documents of RPJMD and Renstra SKPD in South Sulawesi 25Figure 2.2. Musrenbang process for all levels of subnational government 27Figure 2.3. Process and stages of RAPBD formulation (Perspective of Permendagri 59/2007, from RKPD to RAPBD) 29Figure 2.4. Performance-Based Budgeting within the framework of planning and budgeting consistency 31Figure 2.5. Performance achievement framework for subnational government 31Figure 2.6. PFM score from sample area in South Sulawesi 34Figure 3.1. South Sulawesi real subnational revenue, 2005-2011 38Figure 3.2. Composition of South Sulawesi real revenue, 2005-2011 39Figure 3.3. Composition of per capita income by district/municipality in South Sulawesi, 2010 40Figure 3.4. Composition of South Sulawesi Own Source Revenue, 2005-2011 40Figure 3.5. Comparison of district/municipal PAD per capita in South Sulawesi, 2010 41Figure 3.6. Composition of Balancing Fund in South Sulawesi, 2005-2011 41Figure 3.7. Comparison between DAU in South Sulawesi by levels of government 42Figure 3.8. Comparison of Balancing Fund per capita by district/municipality in South Sulawesi, 2010 42Figure 3.9. Other Legitimate Revenue at provincial and district/municipal level in South Sulawesi, 2005-2010 43Figure 3.10. Surplus/Defi cit of APBD of South Sulawesi, 2005-2011 44Figure 4.1. Government expenditure in South Sulawesi, 2005-2011 48Figure 4.2. APBN/PHLN fund administered by government agencies in South Sulawesi, 2007-2010 48Figure 4.3. Expenditure per capita of districts/municipalities in South Sulawesi, 2010 49Figure 4.4. Personnel spending dominated South Sulawesi expenditure, 2005-2011 49Figure 4.5. Expenditures by economic classifi cation for province and district/municipality, 2005-2011 50Figure 4.6. South Sulawesi expenditure (province and districts/municipalities) by Sector, 2007-2011 51Figure 4.7. Expenditure for strategic sector of provincial and district/municipal governments 52Figure 4.8. Gender responsive budget by Women’s Empowerment Agency at provincial and district/municipal level in South Sulawesi, 2007-2011 53Figure 4.9. Expenditures by economic classifi cation for Women’s Empowerment and Child Protection Agency in South Sulawesi, 2010-2011 54Figure 4.10. Allocation of expenditure for PUG-programs at provincial level varies 54Figure 5.1. Total education expenditure and total regional expenditure in South Sulawesi, 2005-2011 58Figure 5.2. Composition of real education expenditure by economic classifi cation in South Sulawesi, 2005-2011 59Figure 5.3. Composition of real education expenditure at the district/municipality and provincial level in South Sulawesi, 2005-2011 59Figure 5.4. Ratios of school and teacher to students at each education level, 2005-2010 60Figure 5.5. Comparison of school participation rates in South Sulawesi against the national average, 2010*) 60

viiImproving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

Figure 5.6. Comparison of average number of years schooling in South Sulawesi against the national average, 2006-2010 61Figure 5.7. Comparison between South Sulawesi and national average literacy rates, 2005-2010 62Figure 5.8. Male literacy rates are higher than female literacy rates, 2005-2010 62Figure 5.9. Literacy rates in South Sulawesi versus national fi gures, 2010*) 62Figure 5.10. Education expenditure by District/Municipality in South Sulawesi, 2010 63Figure 5.11. Education expenditure by economic classifi cation among districts/municipalities in South Sulawesi, 2010 64Figure 5.12. Average number of years schooling by district/municipality in South Sulawesi, 2009 66Figure 5.13. Literacy rates by district/municipality in South Sulawesi, 2009 66Figure 5.14. Flow scheme of free education policy in South Sulawesi 69Figure 5.15. Total health expenditure compared to total regional expenditure of South Sulawesi, 2005-2011 73Figure 5.16. Comparison of composition of health expenditure by expenditure type between province & district/municipality in South Sulawesi, 2010 74Figure 5.17. Number of health facilities and medical personnel per 10,000 population in South Sulawesi, 2005-2009 74Figure 5.18. Comparison of life expectancy in South Sulawesi against national life expectancy, 2007-2010 74Figure 5.19. Infant mortality rate in South Sulawesi, 2005-2009 75Figure 5.20. Maternal Mortality Rate in South Sulawesi, 2005-2009 per 100.000 Population 75Figure 5.21. Real per capita health expenditure by district/municipality in South Sulawesi, 2011 76Figure 5.22. District/municipality health expenditure by economic classifi cation in South Sulawesi, 2010 77Figure 5.23. Total infrastructure expenditure and total regional expenditure in South Sulawesi, 2005-2011 82Figure 5.24. Infrastructure expenditure by economic classifi cation in South Sulawesi, 2005-2011 83Figure 5.25. Infrastructure expenditure in South Sulawesi of 2010 by economic classifi cation 83Figure 5.26. Number of passengers and goods going through the Soekarno-Hatta Harbor, Makassar 84Figure 5.27. Comparison of availability of road facilities in South Sulawesi, 2007 & 2010 85Figure 5.28. Length and condition of road network in South Sulawesi, 2005-2010 85Figure 5.29. Achievement of basic infrastructure indicators in Sulawesi, 2009 86Figure 5.30. Women’s access to clean water, sanitation and electricity in South Sulawesi 86Figure 5.31. Irrigated Rice Fields in South Sulawesi, 2006-2010 87Figure 5.32. Size of rice fi elds by types of irrigation in South Sulawesi, 2007-2011 87Figure 5.33. Per capita infrastructure expenditure in districts/municipalities in South Sulawesi, 2010 88Figure 5.34. Newly formed districts of North Luwu and East Luwu have better road quality 88Figure 5.35. Urban areas achieve better basic infrastructure coverage 89Figure 6.1. Agriculture sector expenditure of South Sulawesi 92Figure 6.2. Agriculture expenditures by economic classifi cation (province and district/municipality) in South Sulawesi, 2005-2011 93Figure 6.3. Allocation of agricultural expenditure province and district/municipality by economic classifi cation in South Sulawesi, 2010 93Figure 6.4. Real agricultural expenditure per district/municipality in South Sulawesi 94Figure 6.5. Maize production on production centers in South Sulawesi, 2005-2010 95Figure 6.6. Corn Field in the production centers in South Sulawesi, 2005-2010 96Figure 6.7. Plantation area, production, and productivity of cocoa in South Sulawesi, 2010 97Figure 6.8. Cattle population for consumption/milk in South Sulawesi, 2005-2009. 100Figure 6.9. Production of G. Verrucosa and E. Cottoni seaweeds, 2006-2010 101Figure 6.10. Seaweed production in 5 districts in 2010. 101Figure 6.11. Contribution Made by 5 Districts as Producers of Seaweed Tends to Decline Up to 2009, then Increasing Fast in 2010. 102Figure 6.12. Shrimp Production per Species, 2006-2010 104Figure 7.1. Comparison of percentage of poor people in South Sulawesi and Indonesia, 2006-2010 108Figure 7.2. Comparison of the percentage of poor people among Indonesian provinces, 2010 108

viii South Sulawesi Public Expenditure Analysis 2012

Figure 7.3. Comparison between the amount and percentage of poor people in provinces in Sulawesi, 2010 109Figure 7.4. Distribution of poor people by area in South Sulawesi, 2010 109Figure 7.5. Poverty depth index (P1) and poverty severity index (P2) in South Sulawesi, 2006-2010 110Figure 7.6. Gini coeffi cient index in South Sulawesi and nationally, 2007-2010 110Figure 7.7. Percentage of poor people by district/municipality in South Sulawesi, 2009 111Figure 7.8. Percentage of female-headed households by income group in South Sulawesi 111Figure 7.9. Expenditure on environmental issues in South Sulawesi, 2007-2009 115Figure 7.10. Most coral reefs in South Sulawesi and Indonesia are damaged 116Figure 7.11. Growth of IPM & GDI South Sulawesi, 2005-2010 117Figure 7.13 Gender development index (GDI) in 23 districts/municipalities across South Sulawesi 118Figure 7.12. Growth of GDI South Sulawesi and nationally, 2005 – 2009 118Figure 7.14 Gender Empowerment Measure (GEM) in 23 districts/municipalities across South Sulawesi 119Figure 7.15. Level of absorption of female work force in South Sulawesi during 2005 – 2009 119

List of TableTable 1.1. GRDP on constant price by sectors in South Sulawesi is increasing in value but with slow structural transformation. 10Table 1.2. South Sulawesi’s constant price GRDP by utilization in 2005-2010 was dominated by Household Consumption 10Table 1.3. Per capita districts/municipalities GRDP in South Sulawesi by constant price 11Table 1.4. Development of Domestic and Foreign investments realization in the province, 2005-2010 13Table 1.5. South Sulawesi population by age groups and by gender, 2009 14Table 1.6. Sectoral distribution of employed population aged ≥ 15 in South Sulawesi, 2005-2009 15Table 1.7. Mission and General Policy for long-term development, specifi cally outllined as to establish South Sulawesi as a leading region on self reliance principle and religious nuance 18Table 1.8. Mission and General Policy for South Sulawesi medium-term development, specifi cally outlined as to establish South Sulawesi as a leading region in fulfi lling citizen’s basic rights 19Table 2.1. Translation of Development Agenda of RPJMN into South Sulawesi’s RPJMD 22Table 2.2. Translation of RPJMN development priority into South Sulawesi’s RPJMD 23Table 2.3. Correlation between development agenda in RPJMN and provincial/district/municipal RPJMD in South Sulawesi 24Table 2.4. Correlation between development priority in South Sulawesi’s RPJMD 2008-2013 and Renstra SKPD of Health Offi ce and Agriculture Offi ce 26Table 2.5. Priorities in Health Offi ce strategic plan (Renja) 2010 compared to South Sulawesi’s APBD 2010 30Table 2.6. BPK opinion on subnational government fi nancial statements in South Sulawesi, 2005-2010 32Table 2.7. PKD scores on sampled districts/municipalities for 9 areas of analysis 34Table 5.1. School participation rate by sex in South Sulawesi, 2006-2009 61Table 5.2. Average Household Spending for Education By Income Group in South Sulawesi, 2005-2009 63Table 5.3. Student-school ratio and teacher-student ratio at each education level by district/municipality in South Sulawesi, 2010 65Table 5.4. Literacy rates by age group in districts/municipalities in South Sulawesi, 2009 67Table 5.5. Average household spending on education by income group in districts/municipalities of South Sulawesi, 2009 68Table 5.6. Achievement of basic health indicators in Sulawesi in 2009 75Table 5.7. Average household spending on health by income group in South Sulawesi, 2005-2009 76Table 5.8. Health facilities per 10,000 people by district/municipality in South Sulawesi, 2005-2009 78Table 5.9. Average household spending for health by income group in districts/municipalities of South Sulawesi, 2009 79Table 5.10. District/municipality budget allocations for free health care policy, 2009-2011 80

ixImproving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

Table 5.11. Increasing frequency of fl ights, number of passengers and goods going through Sultan Hasanuddin Airport 84Table 6.1. Target production for top commodities planned by 2013 94Table 6.2. Maize productivity level in South Sulawesi, 2005-2010 96Table 6.3. Cocoa production in South Sulawesi from 2006 to 2010 98Table 6.4. Cocoa development programs in South Sulawesi, 2006–2010 98Table 6.5. The budget for cocoa development in South Sulawesi came mostly from APBN 99Table 6.6. South Sulawesi shrimp production, ponds size and productivity, 2010 102Table 7.1. Percentage of female-headed households by income group in South Sulawesi, 2005 -2009 110Table 7.2. Percentage of poor people by district/municipality in South Sulawesi, 2005-2009 112Table 7.3. Average household revenue and percentage of women’s contribution to household revenue by type of activity 120Table 7.4. Average allocation of household labor by type of household economic activity in a day, 2011 120Table C.1. Matrix of Conclusions and Recommendations for Subnational Development Planning and Financial Management Chapter 126Table C.2. Matrix of Conclusions and Recommendations for Subnational Revenue and Subnational Expenditure Chapters 127Table C 3. Matrix of Conclusions and Recommendations for Sectoral Development Chapter 129Table C.4. Matrix of Conclusions and Recommendations for Prime Commodities Chapter 132Table C.5. Matrix of Conclusions and Recommendations for Strategic Issues Chapters 133Table D.1. Revenue by Source 135Table D.2. Expenditures by Economic Classifi cation 137Table D.3. Expenditures by Sector 138Table D.4. Deconcentrated Central Government Expenditure to South Sulawesi province 139Table D.5. District/municipality per capita revenue by APBD-revision of 2010 140Table D.6. District/municipality per capita expenditure for strategic sectors by APBD-revision of 2010 141

List of BoxBox 5.1. Regulated variables for the calculation of free education assistance in South Sulawesi, 2011 69Box 5.2. Regulated fund utilization for free education in South Sulawesi, 2011 70Box 5.3. Free education in East Luwu District 71Box 5.4: Free health policy in South Sulawesi 81

x South Sulawesi Public Expenditure Analysis 2012

List of Abbreviation

PBB Performance-Based Budgeting or Anggaran Berbasis Kinerja (ABK)

LER Life Expectancy Rate

IMR Infant Mortality Rate

MMR Maternal Mortality Rate

AMDAL Analisa Mengenai Dampak Lingkungan or Environmental Analysis

APBD Subnational Buget or Anggaran Pendapatan dan Belanja Daerah

APBN State budget or Anggaran Pendapatan dan Pengeluaran Negara

SER School Enrollment Rate

COREMAP Coral Reef Rehabilitation and Management Program

BLHD Subnational environment offi ce or Badan Lingkungan Hidup Daerah

BUMN State-owned business entity or Badan Usaha Milik Negara

DAK Specifi c Purpose Grants or Dana Alokasi Khusus

DAS Drainage Basin or Daerah Aliran Sungai

DAU General Purpose Grants or Dana Alokasi Umum

DBH Shared-revenue or Dana Bagi Hasil

DPA Issuance of spending authority or Daftar Pengisian Anggaran

Gerbang Emas Gerakan Pengembangan Ekonomi Masyarakat is South Sulawesi Government program to develop local economy

Gerhan Forest and Land rehabilitation program or Gerakan Rehabilitasi Hutan and Lahan

Gernas Gerakan Nasional. Bagian dari Gerakan Nasional Kakao

Grateks-2 Gerakan Ekspor Dua Kali Lipat South Sulawesi Government program that encourage farmer to orient their products for export to gain higher selling price

HDI Human Development Index

KUA/PPA General Budget Policy/Budget Priority and Ceiling or Kebijakan Umum Anggaran/Prioritas dan Plafon Anggaran

LKPD Subnational Government Financial Report or Laporan Keuangan Pemerintah Daerah

NGO Non-Governmentla Organization

Musrenbang Development Planning Discussion or Musyawarah Perencanaan Pembangungan

P3KM Pusat Penelitian & Pengembangan Kebijakan & Manajemen

PAD Own Source Revenue or Pendapatan Asli Daerah

GRDP Gross Regional Domestic Product

xiImproving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

PMA Foreign Investment or Penanaman Modal Asing

PMDN Domestic investment or Penanaman Modal Dalam Negeri

PUG Gender Mainstreaming or Pengarus-Utamaan Gender

PUN National Shrimp Program or Program Udang Nasional

Renja Government unit work plan or Rencana Kerja

Renstra Government unit strategic plan or Rencana Strategis

RKA Work plan and budget or Rencana Kerja Anggaran

RKPD Subnational Government Work Plan or Rencana Kerja Pemerintah Daerah

SSR School-Student Ratio

STR Student-Teacher Ratio

RPJMD/N Subnational medium term development plan/national or Rencana Pembangunan Jangka Menengah Daerah/Nasional

SKPD Subnational government working unit or Satuan Kerja Perangkat Daerah

SiLPA Sisa Lebih Perhitungan Anggaran

SPPD/N Subnational development planning system/national or Sistem Perencanaan Pembangunan Daerah/Nasional

TAPD Subnational government budget team or Tim Anggaran Pemerintah Daerah

TKPKD Coordination team for poverty alleviation at the subnational level or Tim Koordinasi Penanggulangan Kemiskinan Daerah

LFPR Work force participation rate or Tingkat Partisipasi Angkatan Kerja

TPT Open unemployment rate or Tingkat Pengangguran Terbuka

UMKM Micro, small and medium enterprise or Usaha Mikro Kecil Menengah

UKL Environment management program or Upaya Pengelolaan Lingkungan

UPL Environment monitoring program or Upaya Pemantauan Lingkungan

USD United States Dollar (Dollar Amerika Serikat)

Executive Summary

2 South Sulawesi Public Expenditure Analysis 2012

1. Growth in General and Objective of PlanningSouth Sulawesi Province increasingly plays an important and strategic role in development in both Eastern

Indonesia and Indonesia as a whole. The province is located in the heart of Indonesia and covers 45,765 square kilometers, has a population of eight million (2010), and consists of 21 districts and three municipalities. This position places South Sulawesi as the gateway to Eastern Indonesia for marine transportation (Soekarno-Hatta Seaport in Makassar), overland transportation (the City of Makassar as the starting point of the Trans-Sulawesi Highway), and air transportation (Sultan Hasanuddin International Airport in Makassar). The province is also home to a national food estate and is the centre for cocoa development in Indonesia.

South Sulawesi has experienced rapid socio-economic development over the past fi ve years. Over this period, during which population growth was quite high, Gross Regional Domestic Product (GRDP) increased and its structure shifted, income per capita and economic growth have increased, investment has improved, and poverty and the unemployment rate have decreased. All of this occurred in the context of increasing subnational spending, increasing infrastructure development and improving service delivery.

The quality of human resources is the main challenge for local development in South Sulawesi. South Sulawesi’s Human Development Index (HDI) has increased signifi cantly and in relative terms it has risen from 23rd to 19th in Indonesia. However, South Sulawesi’s HDI, along with other socio-economic indicators, needs further improvement in order to attain high quality human resources.

South Sulawesi’s economy is driven by agriculture through its top commodities. Over the past fi ve years, agriculture has accounted for almost 27 percent of the province’s PDRB and absorbed nearly half of the labor force (2009). This means that the economy is still driven largely by primary products and human resources in traditional agriculture. Challenges in managing top commodities such as estate crops (cocoa), food crops (rice paddies and maize) as well as sea food (fi sh and seaweed) must be addressed and oriented towards agro industry and agribusiness.

Consistency and interrelatedness between planning and budgeting documents is improving. In general, subnational budget allocations align with planning documents. However, several aspects of planning and budgeting need to be improved. Subnational governments tend to pay more attention to budgeting than planning and are less committed to achieving consistency between the two. There are still inconsistencies in planning at diff erent levels of government, delays in the formulation of mid-term planning documents (RPJMD), and inappropriate indicators and performance targets.

2. Subnational Revenue and ExpenditureSubnational revenue and expenditure have increased signifi cantly yet remain highly dependent on

central transfers. Between 2005 and 2010, total revenue grew 76 percent to almost IDR 16 trillion. District/municipal governments’ revenue is growing by 11 percent whiles the province at 9 percent annually. Central transfers account for 76 percent of South Sulawesi’s revenue and totaled IDR 11 trillion in 2010. District/municipal governments could only generate Own Source Revenue (PAD) totaling 7 percent of total revenue, while more than half (58 percent) of the provincial government’s revenue comes from PAD.

South Sulawesi needs to improve its spending mix. The governments in South Sulawesi spend nearly half of their expenditure on personnel (44 percent), while spending on capital accounts for 26 percent. The provincial government spends the largest share on transfers to the district (37 percent), which funds the Free Health and the Free Education Policies. Districts are allocating 33 percent of total expenditure to education, which is one of the largest allocations. Allocations for programs related to gender equality and equity in South Sulawesi are low.

3Improving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia

Executive Summary

3. Performance of the Strategic Sectors

Education

Increased education spending is yet to produce consistent outcomes. Education spending grows as much as 27 percent per year, with three quarters spent on personnel. Teacher-student and school-students ratio have improved across all educational levels and literacy has increased from 85 percent (2005) to 88 percent (2010) but still falls behind the national average of 93 percent (2010). The municipalities have achieved better literacy rates and mean years of schooling compared to the districts, a common phenomenon throughout Indonesia. At the same time, girls tend to spend less time in school than boys even though their Net Enrollment Rate is similar if not slightly higher than for boys. This shows that South Sulawesi is facing challenges in providing service delivery to rural areas as well as to keep girls in school.

The policy on free-of-charge education has enhanced synergy between the province and districts/

municipalities in fi nancing for education. The policy on free-of-charge education has enhanced the capacity of the province and districts/municipalities to achieve synergy in fi nancing for education services. In line with its purpose, the policy on free-of-charge education has eased the burden of school-aged children who are already enjoying education, although it has not yet been eff ective in attracting other children to enroll in schools. The policy is also yet to eff ectively encourage schooling for school-aged children who are forced to earn money for their families or who face geographical challenges.

Health

Basic health indicators are improving as health spending increases. In 2010 consolidated health spending in South Sulawesi reached IDR 1.7 trillion, with 48 percent allocated to personnel. However, as a proportion of total spending, health remained the same at 9 percent. There have been several improvements: the ratio of health facilities and health personnel per 10,000 population increased from 2.2 to 2.7 and from 15 to 16.5 between 2005 and 2009, respectively; life expectancy increased from 70.2 (2007) to 70.8 (2010), which is closer to the national average of 70,9; Infant Mortality reduced from 30.0 (2005) to 26.6 per 1,000 births (2009); and maternal mortality reduced from 133 (2006) to 118 per 100,000 births (2009).

The free-of-charge health care policy has helped to ease the health-fi nancing burden borne by communities. Free-of-charge health care has also contributed to the expanded coverage of health services, improved quality of health services, and extended public health insurance. Nevertheless it seems that the policy on free-of-charge health care emphasizes the provision of illness-related services and treatments (short term) over longer-term health investments such as immunization, nutrition, sanitation and clean water.

Infrastructure

Increased infrastructure spending has helped to position Makassar as a gateway to Eastern Indonesia. South Sulawesi’s infrastructure spending grew substantially prior to construction of the new airport. In 2010 infrastructure spending accounted for 15 percent of total spending or as much as IDR 2.5 trillion. More than 85 percent of this was spent at the district level. South Sulawesi is easily accessible from both Western and Eastern Indonesia and Sultan Hasanuddin International Airport in Makassar serves almost all fl ight routes to Eastern Indonesia. The Seaport of Soekarno-Hatta in Makassar is still by far the largest container seaport in Eastern Indonesia.


However, South Sulawesi is facing basic infrastructure and roads challenges. Access to basic infrastructure, including clean water, decent sanitation and electricity, remains below the national average. More than one-third of roads infrastructure is mildly or severely damaged. And the ratio of irrigation channels to the area of fi elds has tended to decrease, although in absolute terms the number of fi elds receiving irrigation has tended to increase.

Agricultural

Spending in agriculture has doubled but its contribution to the economy is decreasing. Agriculture spending has been growing by 24 percent annually, reaching IDR 491 billion in 2010, but half of this was allocated to personnel. South Sulawesi continues to be home to a central food estate, producing rice, maize, cattle, seaweed and cocoa. These commodities are projected to reach their production target by 2013. Despite this, agriculture’s contribution to GRDP decreased from 31 percent to 28 percent between 2005 and 2009.

4. Gender and Other Strategic IssuesSouth Sulawesi is doing relatively well at alleviating poverty and improving gender indicators. The poverty rate decreased from 15 percent to 12 percent between 2006 and 2010, with 87 percent of poor living in rural areas. The Gender-related Development Index (GDI) increased from 50 in 2005 to 54 in 2009. At the same time the Gender Empowerment Measure (GEI) increased from 57.4 (2005) to 61.2 (2009). This progress needs to be sustained, especially since programs related to gender tend to receive inconsistent budget allocations.

5. Development Recommendation

Improve budget quality through better planning and spending mixImprove the quality of local development planning and budgeting. The subnational governments need to strengthen planning and budgeting capacity by enhancing the competence of local development planners and public fi nancial managers as well as by establishing a shared perception among local stakeholders concerning planning and budgeting processes and mechanisms. Specifi cally, South Sulawesi’s sub-national governments need to be more focused on ensuring that documentation is made available and improving the quality of annual planning and budgeting at the subnational level and especially within the working units (SKPDs).

Improve subnational governments’ fi scal capacity from Own Source Revenue (PAD). Although PAD increased in real terms, its contribution is less than fi scal transfers from the central government. Therefore, South Sulawesi should continue eff orts to increase PAD, including: (i) reviewing and expanding the potential for Local Tax and Levy revenues, regardless of the amount, by referring to the latest Law on Local Tax and Levy; (ii) improving the administration system for collecting Local Tax and Levy to minimize leakage; and, (iii) providing training on taxation for local government, particularly with regards to setting revenue targets based on existing potentialal.

Improve the composition and quality of government expenditure allocated to the strategic sectors and

gender. Personnel expenditure dominates other expenditures, both at province and district/municipal level. Proportion of expenditure allocation for strategic sectors (education, health, infrastructure and agriculture) is lower than general administration expenditure. Likewise, allocation for gender program to create gender equality and fairness is also low. Some measures that should be taken to improve the composition and quality of local government expenditure are: (i) application of a moratorium on recruitment of new government personnel over the next 2 - 3 years; (ii) if recruitment of new personnel is necessary, the recruitment of technical offi cers such


Executive Summary

as accountants, teachers and medical personnel should be prioritized, and the number of new recruits should be kept lower than the number of retiring personnel; (iii) increasing the proportion of expenditure allocated to health and agriculture as well as other sectors that are relevant to economic growth; (iv) enhance the commitment of policy makers to implementing gender mainstreaming; and, (v) formulate gender-responsive programs and increase the associated budget.

Better service delivery for better outcomesImprove HDI composite indicators, especially education indicators. Such low literacy rates and mean-years-of-schooling contribute signifi cantly to South Sulawesi’s low HDI. The subnational government needs to allocate signifi cantly more funding to eradicate illiteracy and improve access to secondary and tertiary education. Eff orts to eradicate illiteracy should focused on women in the Southern area of South Sulawesi, namely the districts of Jeneponto, Bantaeng, Takalar and Gowa. Eff orts to increase Average Years of Schooling should focus on poorly performing districts such as Bantaeng, Jeneponto, Wajo, and Takalar.

Allocate a greater share of the health budget to longer-term investments. The current health policies are focused on shorter-term measures such as treatments (curative actions). These short-term measures need to be balanced with longer-term preventative actions, such as immunization, nutritional enhancement, sanitation and clean water. Such health investment can potentially improve the status and quality of public health in the long run as well as improve health indicators.

Improve basic infrastructure. South Sulawesi’s basic infrastructure (sanitation, clean water and electricity) is ranked second best in Sulawesi after North Sulawesi. However, South Sulawesi’s basic infrastructure indicators remain low compared to the national fi gures. Access to sanitation and clean water needs attention, particularly in districts where the outcomes are low. In improving access to electricity, despite the fact that the authority for provision of electricity lies with the central government, the subnational government needs to continue pushing for improved electric power capacity in South Sulawesi.

Develop the agricultural sector to add value to the top commodities. Organic rice and maize products should be developed and this should be done in cooperation with livestock development. Integration of rice and maize with cattle can produce organic fertilizer, cattle feed and biogas so that the production cost for the three commodities can be minimized and better product quality and price can be achieved. South Sulawesi should also develop its organic shrimp industry to satisfy the requirements of international demand as well as restore or upgrade the shrimp ponds ecosystem to ensure sustainable and continuous shrimp farming. The development of cocoa and seaweed should be aimed at producing ready-to-consume processed products.

Improve the indicators that constitute Gender-related Development Index (GDI) and Gender Empowerment

Measure (GEM). Close observation of GDI outcome indicators shows that the low rate is attributable to the low contribution of income from men and women as well as the low literacy rate of both men and women. Income contribution from women is particularly low in coastal areas. In order to further improve the role of women, both in their contribution to household income and in their participation in the public sphere, it is necessary to perform the following: (i) provide assistance for both men and women in managing their businesses in order to increase their income contribution to improve GDI and GEM; (ii) develop functional literacy education; (iii)intensively socialize/disseminate information to and increase the awareness of the general public regarding gender-responsive compulsory nine years and 12 years Education Programs; and (iv) provide assistance and facilitation for women in coastal areas in terms of business management and technical issues.

Chapter 1 Introduction


1.1 Subnational Growth

South Sulawesi plays an important and strategic role for the growth of Sulawesi Island and Eastern

Indonesia in general. Geographically located at the center point of Indonesia with a total area of 45,764.53 square km, the position has placed South Sulawesi as the gateway for other Sulawesi sub-regions and Eastern Indonesia (KTI) through sea transportation (Soekarno-Hatta Port), land (the starting point of trans-Sulawesi) and air (Sultan Hasanuddin Airport). In the past, Makassar was a major international port both before and during the colonial era, and when the Sulawesi province was established shortly after the independence, Makassar became the capital of the province. From then on the title of the gateway to Sulawesi and Eastern Indonesia remains attached to the province.

Figure 1.1. Makassar is positioned right in the center of Indonesia

Source: Map prepared by the World Bank staff , 2011.

South Sulawesi is one of the provinces with signifi cant regional proliferation in decentralization era.

South Sulawesi province was initially a result of proliferation of Sulawesi in 1950s, the process established South and Southeast Sulawesi Province. During the decentralization era in 2000s, several districts in South Sulawesi province split into several new districts, such as the District of Luwu split into Luwu District, Palopo City, North Luwu District and East Luwu District. Also District of Polewali Mamasa split into Polewali Mandar District and Mamasa District; whereas Mamuju became Mamuju District and North Mamuju District. In 2004, South Sulawesi province was split into South Sulawesi Province and West Sulawesi Province, in which the West Sulawesi incorporated Polewali Mandar, Majene, Mamasa, Mamuju and North Mamuju Districts. The purpose of such regional administrative proliferation is basically to bring services closer to public, and South Sulawesi is so keen to provide better services closer to its citizen.



1.2 Subnational Economic Condition

South Sulawesi’s economy has a fl uctuated growth but still well above the national average. As shown in period of 2005-2010, economic growth in South Sulawesi is always higher than the national average economic growth. The rapid economic growth in South Sulawesi in the recent years will allow this region to catch up with the other provinces. In addition, South Sulawesi’s economy is expected to be able to further drive economic growth of greater Sulawesi and Eastern Indonesia (KTI) regions.

Figure 1.2. South Sulawesi economic growth is increasing and higher than the national rate

5.2

6.72 6.84

7.78

6.2

8.08

5.75.19

6.8

6.1

4.5

5.9

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009 2010

Pe

rce

nt

Source: Processed based on BPS data.

South Sulawesi GRDP by economic activities is characterized with signifi cant growth and dominated by agricultural sector. South Sulawesi GRDP had grown signifi cantly during the period of 2005-2010, however the transformation of economic structure has not happened signifi cantly. Agriculture is the highest contributor of GRDP compared to other sectors, although in terms of growth, it was slowing down. On the other hand, the contribution of manufacture industry is relatively small and grows slowly. Such slow transformation from agriculture to industry is also due to national and subnational development policies that prioritize agriculture above industry given South Sulawesi’s status as the national food estate.

Such situation resulted in relatively low labor absorption in industrial sector. As the South Sulawesi GRDP showed agriculture domination over industry the labor shift from agriculture to manufacture industry also showed similar pattern. This also hindered the human resources transformation from traditional-agricultural characteristic into modern-industrial. One of cause is the underdeveloped agro-industry, and most of agriculture products are marketed as raw materials. Although in the last 20 years, government has promoted various campaigns such as “petik-olah-jual”, “gerakan ekspor dua kali lipat/Grateks-2”, “Gerakan Pengembangan Ekonomi Masyarakat” (Gerbang Emas)1 and “local industries empowerment” the impact on local agricultural sector has not been signifi cant. With less developed agro-industry, citizen in rural areas have no socio-economic means to alter their livelihood from traditional agriculture to trained/educated industry labors, and to increase their capacity into a more trained or educated workforce.

1 “Petik-Olah-Jual or “Harvest-Process-Sell” and Grateks 2 are aimed to increase added value of the products by processing fi rst before selling or orienting them for export to gain higher selling price. “Gerbang Emas” is a program aimed to develop local community economy.


Table 1.1. GRDP on constant price by sectors in South Sulawesi is increasing in value but with slow structural transformation.

No Sectors 2005 2006 2007 2008 2009 2010

1 Agriculture 11,337.55 11,802.56 12,181.82 12,923.42 13,528.69 13,809.80

2 Mining and Quarrying 3,649.05 3,891.34 4,157.15 4,034.94 3,852.79 4,491.34

3 Processing Industry 5,112.43 5,481.51 5,741.39 6,241.44 6,468.79 6,869.43

4 Electricity, Gas, Water 342.43 368.27 400.88 451.00 490.45 529.82

5 Building Construction 1,712.29 1,787.87 1,942.09 2,328.42 2,656.77 2,900.27

6 Trade, Hotel, and Restaurant 5,386.35 5,770.90 6,322.43 7,034.56 7,792.10 8,698.81

7 Transportation & Communication 2,757.78 2,945.64 3,244.61 3,651.37 4,023.68 4,619.93

8 Finance, Leasing and Service 2,152.68 2,340.47 2,610.48 2,881.07 3,203.98 3,742.09

9 Services 3,970.80 4,479.10 4,731.58 5,003.60 5,308.83 5,535.55

GRDP with oil & gas 36,421.36 38,867.66 41,332.43 44,549.82 47,326.08 51,197.03

Source: Processed based on BPS data.Note: Figures in billion Rupiah.

By utilization, South Sulawesi GRDP is dominated by household consumption and government

consumption. During the period of 2005-2010 South Sulawesi GRDP was signifi cantly spent on household consumption and government consumption, while private consumption remains very low. This implies that GRDP growth in South Sulawesi is still looking for greater support from the business sector and entrepreneurship side, which later creating atmosphere to promote technological innovation, higher effi ciency and eff ectiveness.

Table 1.2. South Sulawesi’s constant price GRDP by utilization in 2005-2010 was dominated by Household Consumption

No Description 2005 2006 2007 2008 2009 2010

1 Household Consumption 20,707.93 22,145.28 22,263.51 24,344.17 25,877.60 27,475.81

2 Private institutions Consumption 222.64 236.58 259.66 274.58 316.43 341.38

3 Consumption by Government and Defense 5,427.12 5,834.15 6,075.87 6,740.98 7,087.11 7,466.20

4 Establishment of Gross Fixed Capital 6,168.58 6,304.06 6,973.39 8,414.11 9,783.91 11,142.66

5 Change of Stock 407.04 200.53 332.84 649.62 734.74 64.13

6 Interinsular and To Overseas Export 15,019.83 15,629.99 19,988.89 19,706.96 15,656.04 23,535.45

7 Interinsular and From Overseas Import 11,531.36 11,482.91 15,561.74 15,580.60 12,141.81 18,828.59

PDRB 36,421.79 38,867.68 41,332.43 44,549.82 47,314.02 51,197.03

Source: Processed based on BPS data.Note: Figures in billion Rupiah.

GRDP per capita in South Sulawesi shows high inequality. East Luwu is the district with the highest GRDP per capita (from the contribution of nickel mining). Makassar city has the largest GRDP in South Sulawesi, but their GRDP per capita was second to East Luwu, only around half the value of the East Luwu. This shows



the gap between East Luwu and other districts/municipalities. The lowest GRDP per capita in the province is Jeneponto at merely one tenth of East Luwu’s. Another mining supported district, Pangkep District, has the third largest GRDP per capita. This shows that non-renewable mining sector plays signifi cant role in district/municipal GRDP.

Table 1.3. Per capita districts/municipalities GRDP in South Sulawesi by constant price

District/Municipality 2005 2006 2007 2008 2009 2010

East Luwu 19.5 19.6 20.2 19.2 17.9 20.3

Makassar 8.8 9.3 9.9 10.9 11.6 12.1

Pangkep 6.6 6.8 7.2 7.6 7.9 8.2

Pinrang 5.6 5.8 6.1 6.4 6.8 7.2

Wajo 5.0 5.2 5.5 5.9 6.1 6.4

Palopo 5.1 5.2 5.4 5.6 5.9 6.2

Pare Pare 4.6 4.9 5.3 5.6 6.0 5.9

Sidrap 4.5 4.9 5.1 5.5 5.8 5.6

Soppeng 3.9 4.2 4.4 4.7 5.0 5.4

North Luwu 3.7 3.9 4.1 4.3 4.5 5.3

Luwu 4.0 4.2 4.4 4.6 4.8 5.1

Sinjai 3.6 3.8 4.0 4.3 4.5 4.7

Bone 3.3 3.5 3.7 4.0 4.2 4.5

Bulukumba 3.4 3.5 3.7 4.0 4.2 4.4

Barru 3.5 3.6 3.8 4.0 4.2 4.4

Bantaeng 3.2 3.4 3.5 3.7 4.0 4.2

Enrekang 3.2 3.3 3.4 3.6 3.8 4.0

Selayar Islands 3.0 3.0 3.2 3.3 3.5 3.8

Maros 3.0 3.1 3.2 3.4 3.5 3.6

Takalar 2.7 2.8 3.0 3.1 3.3 3.4

Tana Toraja 2.4 2.4 2.5 1.3 2.6 3.0

Gowa 2.4 2.5 2.6 2.7 2.9 2.9

Jeneponto 2.1 2.2 2.3 2.4 2.5 2.6

Source: Processed based on BPS data.Note: North Toraja District, which just proliferated in 2008, is not included. Figure in table in million IDR.

GRDP per capita shows a relatively steady increase, but remained below the national average. In 2006, South Sulawesi GRDP per capita reached IDR 8 million, which then increased to IDR 12.6 million in 2009 or increasing by an average of 19 percent per year. However the fi gure remains well below the national average. The national GRDP per capita growth rate is moving faster than that of South Sulawesi, at an average growth of 20.5 percent per year, compared to South Sulawesi of only 19.4 percent per year. This condition implies: (i) on average, other provinces experience an increase in GRDP per capita relatively faster than South Sulawesi, (ii) South Sulawesi GRDP per capita will continue to stay below the national average with the gap that will grow wider, and (iii) in the future, the contribution of South Sulawesi GRDP per capita to the improvement of HDI relative position, can hardly be expected.


Figure 1.3. South Sulawesi per capita GRDP remains below national average

1518

2224

26.90

8 911

1314.67

0

5

10

15

20

25

30

Mil

lio

n I

DR

Source: Processed based on BPS data, 2009 data is temporary fi gure; 2010 data highly temporary.

South Sulawesi’s infl ation rate is quite high with

food and clothing prices as the major contributors. South Sulawesi infl ation rate has been fl uctuating following the national trend of infl ation. Soaring national infl ation in 2005 which was partly caused by fuel price hike did not seem seriously aff ecting South Sulawesi. Main contributors of infl ation in South Sulawesi are food and clothing prices. This condition makes per capita income always resulting in decreasing purchasing power due to such high infl ation fi gure.

South Sulawesi investment condition has been

fl uctuating but tends to increase in last two years. Despite the fl uctuations in number of investors and investment value, in the last three years there has been a positive trend of in South Sulawesi, both for the Domestic Investment (PMDN) and the Foreign Investment (PMA). Sectors capable to signifi cantly absorb domestic investment are agriculture, animal husbandry, food industry, construction, transportation and telecommunications, while for foreign investment, agricultural, horticultural, food industry, wood industry, electricity, gas and water supply as well as building construction. This corresponds to the South Sulawesi’s improving competitiveness which is aff ected by security stability, better investment services at provincial and district/municipality level, while campaigns to attract more investment is being constantly promoted.

Figure 1.4. Infl ation rate in South Sulawesi and national, 2005-2010

17.11

6.60 6.59

11.06

2.78

6.967.45

7.21

5.71

11.79

3.24

6.82

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009 2010

Pe

rce

nt

Indonesia South Sulawesi

Source: Processed based on BPS data .



Table 1.4. Development of Domestic and Foreign investments realization in the province, 2005-2010

YearDomestic Investment

(Thousand IDR)Foreign Investment (USD)

2010 3,212,295,181 441,796,125

2009 1,137,863,414 76,982,850

2008 110,524,937 27,696,510

2007 244,670,640 141,430,870

2006 2,362,627,000 679,965,000

2005 940,544,000 53,558,000


1.3 Demographic and Employment Condition

Demographic situation in South Sulawesi is marked with positive growth and increasing population. In the last six years South Sulawesi population has increased on average above one percent, except in 2007 (0.92%). The average population growth in South Sulawesi is 1.3 percent. Based on Population Census 2010, the province is now home to 8 million people, comprising of 3.9 million males and 4.1 million females.

Figure 1.5. Average South Sulawesi population growth is 1.3 percent

7,489,696

7,595,000

7,700,255

7,805,024

7,908,519

8,032,551

7,200,000

7,300,000

7,400,000

7,500,000

7,600,000

7,700,000

7,800,000

7,900,000

8,000,000

8,100,000

2005 2006 2007 2008 2009 2010

Pe

op

le

Source: Processed based on BPS data.Note: 2010 based on result of Population Census.

Population of productive age is higher than the non-productive, and female population is larger than

the male. In 2009, the non-productive age population (aged under 14 years and over 65 years) reached 2.9 million people (36% of the population), while the productive age (aged 15 to 64 years) was 5 million people (64% of the population). Dependent ratio was 0.57, which means the cost of one non-productive person is borne by roughly two productive-age persons. The number of women in productive age is greater than men, which means South Sulawesi has more women in the labor force compared to men.


Table 1.5. South Sulawesi population by age groups and by gender, 2009

Age Groups Male Female Number Sex Ratio

0-4 375,198 352,040 727,238 106.58

5-9 447,014 407,851 854,865 109. 60

10-14 431,498 409,938 841,437 105. 26

15-19 351,712 362,508 714,220 97. 02

20-24 291,052 309,477 600,529 94. 05

25-29 301,980 343,087 645,067 88. 02

30-34 275,764 311,959 587,723 88. 40

35-39 296,539 327,183 623,722 90. 63

40-44 237,824 266,303 504,127 89. 31

45-49 210,957 228,271 439,227 92. 42

50-54 168,401 195,258 363,660 86. 25

55-59 135,327 144,647 279,973 93. 56

60-64 106,189 144,438 250,627 73. 52

65+ 207,515 268,586 476,104 77. 26

Total 3,836,971 4, 071,548 7,908,519 94. 24


Labor Force Participation Rate (Tingkat Partisipasi Angkatan Kerja - TPAK) continues to increase

while labor force growth is fl uctuating. In 2010, TPAK was 64 percent consisted of 3.6 million people in labor force of 5.6 million working age people. This fi gure increased from 2005 in which the TPAK was only 54 percent and labor force was only 3.2 million people out of 6 million citizens. Increase in TPAK is mainly because more productive age citizens enter the workforce rather than continuing their education at school since the TPAK portion at ages 15-20 years is quite large.

Figure 1.6. Level of participation of work force in South Sulawesi, 2005-2010

54.20

57.17

61.0762.02 62.48

64.14

48

50

52

54

56

58

60

62

64

66

2005 2006 2007 2008 2009 2010

Pe

rce

nt

Source: BPS data.

There is a wide gap between TPAK of female and male. In 2009, female TPAK in South Sulawesi was only 45 percent while male 82 percent. Such condition had actually improved from 2000 in which female TPAK was only 28 percent compared to 70 percent of male. This indicates that although there has been improvement, equal access to employment between male and female in the South Sulawesi has yet to be achieved.



The majority of the workforce is found in agriculture sector although the percentage tends to decrease. In 2009, the labor force working in agriculture, forestry, hunting and fi shery sectors was 49 percent or down from 55 percent in 2005. This represents a large portion compared to the labor absorption in other sectors, particularly in manufacture and processing industry which had only 7 percent in 2009,slightly increased from 6 percent in 2005. The reason why most of the workforce is absorbed in agriculture sector is because the emerging seaweed farming activities, revitalization of cocoa plantation, and maize agribusiness which requires huge number of workers from rural or coastal areas, in addition to those traditionally already working in the rice fi elds.

Table 1.6. Sectoral distribution of employed population aged ≥ 15 in South Sulawesi, 2005-2009

No Employment Sectors 2005 2006 2007 2008 2009

1. Agriculture, Forestry, Hunting and Fishery

1,678,884(54.70%)

1,469,418(55.76%)

1,580,962(53.78%)

1,613,949(51.46%)

1,588,626(49.30%)

2. Processing Industry 197,729(6.44%)

128,966(4.89%)

147,391(5.01%)

183,430(5.85%)

214,668(6.66%)

3. Wholesale, Retail, Restaurant and Hotel

457,530(14.91%)

439,047(16.66%)

566,397(19.27%)

578,961(18.46%)

636,714(19.76%)

4. Community and Social Services and Individual

361,471(11.78%)

302,040(11.46%)

170,135(5.79%)

352,573(11.24%)

362,460(11.25%)

5. Others* 373,607(12.17%)

295,943(11.23%)

374,578(12.74%)

407,198(12.98%)

419,788(13.03%)

Total3,069,221

(100%)

2,635,414

(100%)

2,939,463

(100%)

3,136,111

(100%)

3,222,256

(100%)

Source: Processed based on BPS data .Others* include Mining and Quarrying, Electricity, Gas and Water, Buildings, Transport, Storage and Communication, Finance, Insurance, Leasing Business Building, Land and Business Services .

Of the total female labor force in South Sulawesi, nearly half are employed in agriculture. In 2009, the number of female workers in South Sulawesi reached 1.1 million or 88 percent of total female workforce. This proportion is much larger than that in 2005 at only 71 percent. This increase also indicates the growing involvement of female in various occupations. It is apparent that most female workers work in agriculture sector (48%), followed by trade, restaurant and accommodation services (30%), and community and social service sector (12%).

Figure 1.7. Female work force by sectors in South Sulawesi, 2009

47.96%

0.39%

5.56%

0.00%0.45%

29.91%

2.44%

0.96%12.32%

Agriculture, Plantation, Forestry, Hunting, and FisheryMining and Quarrying

Manufacture Industry

Electricity, Gas and Drinking Water

Construction

Trade, Restaurant, and Service

Transportation, Warehousing,and CommunicationFinancial Institution, Real Estate, Leasing Company, and Company ServiceIndividual, Social and Public Service

Source: Processed based on Sakernas 2009.


Open Unemployment Rate or Tingkat

Pengangguran Terbuka (TPT) in South

Sulawesi is likely continued to decline. Although TPT in South Sulawesi is still higher than the national fi gure, the decline is faster than the national average. The decrease of TPT shows improvement in absorption of labor. The unemployment rate is mainly fi lled by openly unemployed young people aged 15-24 years, which makes up about 20 percent of the total workforce. Despite the decline, this condition should be a concern since youth unemployment means that many school-age populations are forced to enter the labor market.

1.4 Human Development Condition

South Sulawesi Human Development Index (HDI) has increased, and has reached the category of

“upper middle”. Improvement of HDI is the main vision of South Sulawesi medium-term development plan or Rencana Pembangunan Jangka Menengah Daerah (RPJMD), 2008-2013. In 2008 South Sulawesi’s HDI was already in “upper middle” category (above 70 point), and during 2006-2010 the fi gure had increased by 3.44 points, which is the third highest increase nationally, after Lampung and West Papua. In fact, in 2008-2009 South Sulawesi HDI improvement was the highest in Indonesia. Such improvement can be attributed to several factors. First, South Sulawesi economic growth increased signifi cantly while infl ation relatively under control, this has prompted an increase in purchasing power. Second, improvements in education, resulting in improvement in literacy rate from 85.7 percent in 2006 to 87.75 percent in 2010; as well as the average years of schooling increased from 7 years in 2006 to 7.8 years in 2010. Third, improvements in public health service, which increases Life Expectancy Rate (LER) from 69.2 years in 2006 to 70.8 years in 2010.

South Sulawesi HDI also showed improvement in the national ranking, but the fi gure is still far from

its regional medium term planning (Rencana Pembangunan Jangka Menengah Daerah – RPJMD)

target. In 2006 South Sulawesi was ranked at 23rd position in HDI accomplishment of the 33 provinces in Indonesia, which then rose to 19th in 2010. If improvement pace remain, at the end of fi ve-year period (by 2013), the highest possible rank attainable is at 17th of the 33 provinces in Indonesia. This position is still relatively far from the RPJMD target, which is to be included in the top 10 provinces

Figure 1.8. Open Unemployment Rate TPT) in South Sulawesi and National, 2005-2010

10.30 10.40 9.758.39 7.87

7.14

18.64

12.7611.25

9.04 8.74 8.37

0

2

4

6

8

10

12

14

16

18

20

2005 2006 2007 2008 2009 2010P

erc

en

t


Source: BPS data.



Figure 1.9. South Sulawesi HDI tends to increase although still lower than the national average and not yet fully aligned with RPJMD target

70.1070.59

71.1771.76

73.40

68.8169.62

70

South Sulawesi

.2270.94

72.25

66

67

68

69

70

71

72

73

74

Source: BPS and Coordinator Ministry of Public Welfare, UNDP.

The insignifi cant increase in the province’s HDI rank nationally is due to slower acceleration of HDI

points. Some of HDI components showed a lower point and a relatively slower increase than the national achievement. For example, the national literacy rate in 2009 was 92.6 percent, while South Sulawesi’s was 87 percent. Average years of schooling nationwide was 7.7 years, while South Sulawesi’s was 7.4 years. Both indicators are also experiencing a relatively slow pace improvement compared to the national. As a result, their role and contribution to South Sulawesi HDI improvement in overall is relatively small.

Figure 1.10. South Sulawesi HDI rank relatively lower compared to other provinces in Indonesia, 2009

70,9471,76

55

60

65

70

75

80

Source: BPS data.


1.5 The Direction of Long Term and Medium Term Development

South Sulawesi long-term development (2005-2025) is directed toward achieving the position as a

leading region in Indonesia by relying on local self-reliance and religious nuance. This visionis setting South Sulawesi to be the leading region in terms of development indicators. It also shows the way to achieve that goal, by relying on local potential and the fundamental value of religious spirit. The general direction of this long-term development, along with the national long-term development, also encompasses the districts/municipalities’ long-term development goal, to ensure consistency between public policy and its operations.

Table 1.7. Mission and General Policy for long-term development, specifi cally outllined as to establish South Sulawesi as a leading region on self reliance principle and religious nuance

2005-2025 Vision:

South Sulawesi to be the Leading Province in Indonesia

under Self Reliance principle and Religious Nuance

Mission General Policy

1. To improve South Sulawesi human resource quality. 1. Improving South Sulawesi human resource quality.

2. To establish South Sulawesi as a learning entity 2. Making the citizen of South Sulawesi as learning community.

3. To establish South Sulawesi as a conducive region 3. Making South Sulawesi a conducive region.

4. To establish South Sulawesi as one unifi ed social-economic region with justice and fairness.

4. Establishing South Sulawesi as one unifi ed social-economic region with justice and fairness.

5. To increase the role of South Sulawesi as developed, self-reliant archipelagic region, to strengthen national security.

5. Improving the role of South Sulawesi as developed, self-reliant archipelagic region, to strengthen national security.

Source: RPJPD South Sulawesi 2005-2025.

The medium-term development of the province is aimed at positioning South Sulawesi in top 10

provinces in term of fulfi llment of basic rights. That means within the period of 2008-2013, the vision, to be a leading region in long-term needs to be translated into medium-term focus to be able tomeet citizen’s basic rights. The indicator of this vision is set on accelerating the achievement of South Sulawesi HDI. The mission and the general policy of the medium-term development have also been directed to the realization of that vision.



Table 1.8. Mission and General Policy for South Sulawesi medium-term development, specifi cally outlined as to establish South Sulawesi as a leading region in fulfi lling citizen’s basic rights

Vision 2008-2013 South Sulawesi as The Top Ten Province in Fulfi llment of Citizen’s Basic Rights

Mission General Policy

1. Improvement of service quality to fulfi l citizen’s basic rights

1. Improve the quality of public health and education

2. Accelerate the equal distribution and improvement of public’s welfare

2. Improve and create equal distribution of public’s welfare

3. Develop local competency to prompt local economic growth

3. Establish local competency to prompt economic growth

4. Establish a conducive environment for innovativeness

4. Realize South Sulawesi as a socioeconomic entity founded in the principal of justice

5. Establish a conducive environment for innovativeness

5. Institutional strengthening in order to create good governance.

6. Community institutiona strengthening.

7. Government institutional strengthening.

Source: RPJMD South Sulawesi 2008-2013.

Chapter 2 Subnational Development Planning and Financial Management


Linkage and consistency between subnational development planning and budgeting (APBD) refers to Law 25/2004 on national development planning system or Sistem Perencanaan Pembangunan Nasional (SPPN) and Government Regulation 08/2008 on stages, procedures, control, and evaluation of the implementation of the development planning. In addition to content analysis on a number of planning documents, the team also performed analysis on the preparation and implementation processes and mechanisms of the planning and budgeting documents at all levels of governments. Content analysis as well as analysis on process and mechanism was observed from the medium-term development planning at national, provincial and district/municipal level, and the annual planning and budgeting at provincial level as well as district/municipal level in South Sulawesi. In addition, the team also presented general overview on subnational fi nancial management.

2.1 National and Subnational Development Planning

Diff erent timelines is one of the obstacles in synchronizing the national and subnational development

planning. This is was illustrated by the short intercept time between the publication of national medium term development plan or Rencana Pembangunan Jangka Menengah Nasional (RPJMN) 2004-2009 and South Sulawesi medium-term development plan or Rencana Pembangunan Jangka Menengah Daerah (RPJMD) 2008-2013. The RPJMD 2008-2013 was published before the RPJMN 2010-2014, thus it is hardly that RPJMD refers to the RPJMN. It is important that Provincial governments undertake fi rmer evaluation of the district/municipal RPJMD before their publication to ensure that the RPJMD substance is aligned to the provincial RPJMD. Likewise, the Ministry of Home Aff airs and Bappenas must also perform similar step to examine the consistency and correlation between provincial RPJMD and RPJMN.

Table 2.1. Translation of Development Agenda of RPJMN into South Sulawesi’s RPJMD

Development agenda under

RPJMN 2004-2009

Development agenda under

RPJMD South Sulawesi 2008-2013

Establish Indonesia as a safe, secure and

orderly nationEstablish a conducive environment for innovativeness

Establish Indonesia as nation based on

justice and democracy

Strengthen community organization;Strengthen governmental institution.

Improve public welfare

Improve the quality of public health and education;Improve and create equal distribution of public welfare;Establish local competency to prompt economic growth;Realize South Sulawesi as a social-economic entity founded

on the principle of justice

Source: Processed based on RPJMN 2004-2009 and South Sulawesi RPJMD 2008-2013.

South Sulawesi RPJMD 2008-20013 has refl ected development agenda of the RPJMN 2004-2009.

Table 2.1 shows the translation of RPJMN’s development agenda into South Sulawesi RPJMD’s development agenda. Judging from the development priorities, most of national development priorities have been synchronized with the development priorities of the province, as shown in Table 2.2, what considered to be the province’s main development priorities are already in line with the national development priorities, especially for health and education sectors, through free health and education development program.



Table 2.2. Translation of RPJMN development priority into South Sulawesi’s RPJMD

Development Priority under

RPJMN 2004-2009

Development Priority under

South Sulawesi’s RPJMD 2008-2013

Improvement of women’s role and life

quality as well as improvement of child

protection and welfare

Women empowerment

Dignifi ed and good governance

Improvement of SKPD performance;Improvement of professionalism quality among

government offi cers and civil servants;Institutional arrangement and good governance.

Stronger democratic institutions

Enhancement of social political life;Enhancement of nation’s integrity;Enhancement of public security and state of order;Enhancement of information and communication quality

Poverty Alleviation Improvement of service to the poor

Agriculture Sector Revitalization

Improvement of agriculture production and developing rural agribusiness;

Improvement of public access to production and productive asset

Empowerment of cooperative and small-

medium business or UMKMRevitalize poor community’s economic institution

Improvement of employment climate

Creation of more job and employment opportunity;Placement and expansion of job opportunity;Quality enhancement and supervision of labor

Solidifi cation of macro economy stability

Improvement of manufacture industry

competitiveness

Development of strategic industries;Development of regional cooperation and promotion of

trade;Relization of South Sulawesi as favorite tourism destination

in Indonesia

Development of rural areasDevelopment of rural facility and infrastructure;Rural community empowerment

Minimize gaps in regional developmentImprovement of spatial planning and monitoring;Quality improvement of regional facility and infrastructure

Increase public access to quality education

Provision of free education;Quality improvement of educational services;Eradicate illiteracy

Improve public access to better quality

health service

Provision of free health service;Quality improvement of health service;Nutrition improvement for public;Improvement of housing and settlement services, including

sanitation and clean water.

Improve social protection and welfare Development of local social life.

Develop better quality administration

service and small family as well as youth and

sport

Empowerment of youth and sport organization

Improve the quality of religious life Empowerment of religious organization;

Source: Processed based on RPJMN 2004-2009 and South Sulawesi RPJMD 2008-2013.


Not all national priorities become South Sulawesi priorities. There are two national priorities excluded from South Sulawesi’s priorities, i.e. science and technology development and acceleration of infrastructure development. While South Sulawesi has four specifi c priorities, namely urban development, actualization of local cultural values , strengthening communities, quality enhancement of community structure, and professional organization empowerment. Some districts/municipalities have synchronized their development agenda with the provincial agenda. The PEA research team took RPJMD samples from Makassar City and North Luwu District. Table 2.3 shows how the national development agenda is translated to RPJMD of Makassar City and North Luwu District.

Table 2.3. Correlation between development agenda in RPJMN and provincial/district/municipal RPJMD in South Sulawesi

Development agenda of

2004-2009 RPJMN


2008-2013 RPJMD of

South Sulawesi

Development agenda

of 2009-2014 RPJMD of

Makassar City


District of North Luwu

2005-2010

Establish Indonesia

as a safe, secure and

orderly nation

Establish a conducive environment for innovativeness

Establish Indonesia

as nation based on

justice and democracy

Strengthen community organization;

Strengthen governmental institution.

Decentralization of good and corruption-free governance

Solidifi cation of regional autonomy and self reliance in performing regional development;

Enforcement of law, political and governance as main principles.

Improve public

welfare

Improve the quality of public health and education;

Improve and equally distribute welfare among citizen;

Establish local competency to prompt economic growth;

Realize South Sulawesi as a social-economic entity founded on the principle of justice

Improvement of human quality;

Development of spatial and environmental planning;

Enhancement of economic structure

Establish local competency and competitiveness;

Improvement of public welfare through pro-community poverty alleviation program;

Development of rural area and regional infrastructure;

Enhancement and development of human resource quality;

Administer disaster mitigation and relief.

Source: Processed based on 2004-2009 RPJMN, South Sulawesi RPJMD 2008-2013, Makassar City RPJMD 2009-2014 and North Luwu District RPJMD 2005-2010.

Districts/municipal governments in South Sulawesi still have diffi culties in synchronizing their

development agenda to national agenda. Besides the limited human resource capacity of the apparatus, subnational government’s attention toward national and regional macroeconomic planning is still weak. This is mainly caused by the issuance of a number of laws and regulations which are often inconsistent to each other. As an illustration, based on Law 32/2004 on subnational government, RPJMD of provincial/district/municipal should be legalized by local law (Perda). On the other hand, Law 25/2004 on national development planning system, issued by the National Development Planning Agency/Bappenas/Ministry of National Development Planning requires that RPJMD should be legalized by the head of region’s



regulation (Perkada), equivalent with the legalization of RPJMN by presidential decree. In fact, all RPJMD in South Sulawesi are ratifi ed by local regulations to comply with the Ministry of Home Aff airs regulation and to provide a more legally binding basis. However, the fl exibility of the substance of regional planning within the strategic environment would be better if such planning is established by the head of region’s regulation.

2.2 Subnational Working Units (SKPD) and Development Planning

Some of the districts still having diffi culties to maintain consistency between their development

priorities with their SKPD’s Strategic Plan (Renstra). However, the problem does not occur at provincial level. This illustrates the disparity of understanding of the processes and mechanisms in elaborating regional development planning documents and SKPD in every district and municipality, especially between district/municipal with province level, and between districts in urban areas and those with rural character. To address this disparity, the main challenge to be overcome are institutional capacity and human resource competency of government offi cers in the planning bureau. It is important to create the same understanding between the province and districts/municipalities and the planners at each SKPD.

Figure 2.1. Consistency on development process and stages of the planning documents of RPJMD and Renstra SKPD in South Sulawesi

Vision, Mission, Program of Appointed Head of Region

Bappeda holds Musrenbang RPJMD

Used as guideline for preparing RKPD Draft

Bappeda prepares early draft

of RPJMD

a.Vision, Mission of Head of Regionb.Development Strategyc.General Policyd.Macro economic framework

Bappeda prepares Final Draft of

RPJMD

a.Vision, Mission of Head of Regionb.Development Strategyc.General Policyd.Macro economic frameworke.SKPD program

SKPD prepares Renstra SKPD

RPJMD Ratifi cation

e. SKPD Program

SKPD Program

(1)

(2)

(3)

(5)

(4)

(6)

(7)

Source: Processed based on Law 25/2004 on national development planning mechanism.

In general, districts/municipalities and SKPD discipline in compelling the stages planning documents

production needs to be improved. Districts/municipalities still have not been able to consistently

implement the stages of preparation of SKPD’s Renstra parallel with RPJMD preparation. The subnational development programs should be contributed by each SKPD, but in reality, only few districts are capable to consistently perform that process and according to the specifi ed stages. Even in some districts, SKPD’s Renstra was not completely available (because they never develop one). Instead, they use simple matrix of programs and activities to prepare planning and budgeting documents, not a Renja-SKPD.


Challenges faced by SKPD in preparing their strategic plan are quite diverse. One of them is the diffi culty faced by SKPD to elaborate priorities from RPJMD into SKPD priorities. Priority in RPJMD is often too general and cross-sectoral. For example, priorities in agriculture sector requires involvement of the Offi ce of Industry, Public Works Offi ce, and many more. While for certain sectors, such as health, Public Health Service might be better in mapping their priorities in accordance with the priority in RPJMD (year plan). Table 2.4 illustrates the comparison between strategic plan priorities between Health SKPD and Agriculture SKPD.

Table 2.4. Correlation between development priority in South Sulawesi’s RPJMD 2008-2013 and Renstra SKPD of Health Offi ce and Agriculture Offi ce

South Sulawesi’ RPJMD Priority in Health Sector Priority in Health Offi ce SKPD Renstra

Provision of free health service;

Quality improvement of current health services;

Nutrition improvement for citizen;

Improvement of housing and settlement services

including sanitation and clean water.

Provision of free health service;Quality improvement of current health services;Nutrition improvement for citizen;Prevention and eradication of epidemic diseases;Health promotion;Improvement of housing and settlement services

including sanitation and clean water.

North Luwu’s RPJMD Priority in Agriculture Priority in Agriculture Offi ce SKPD Renstra

Development program which can foster

development in business sectors in rural areas.

Development and improvement of facility and

infrastructure in rural areas where agriculture

products need to be distributed to sub-district

and local markets.

Acceleration of eff ort to improve mobility of

goods of agricultural, plantation, forestry and

fi shery products to be distributed to regional

central markets.

Improvement of local food resilience;Development of agribusiness;HR Development of government offi cers and civil

servants and farmer-fi sherman;Improvement of facility and infrastructure for

agriculture and maritime fi shery;Awareness in local food resilience.

Source: RPJMD South Sulawesi 2008-2013 and Renstra-SKPD Health Offi ce of 2008-2013.

The inability to integrate development program priorities among SKPDs becomes a major obstacle

elaborating regional development priorities into development priorities in each SKPD. In defi ning their priorities, each SKPD tend to be partial by highlighting their sectoral-ego, especially when it comes to budgeting. A number of SKPD in some districts are more concern in claiming responsibility for some development programs rather than perform real eff orts integrating and synergizing their planning to achieve optimal outcomes. This can be seen in the tendency of each SKPD trying to make their programs as the priorities, rather than creating synergies, correlation and mutual support between SKPD programs. The low capacity to accumulate and formulate development planning happens simultaneously in each SKPD, leading to dissociation of SKPD’s substantial role in accomplishing a comprehensive regional development.



2.3 Community Discussion for Local Development Planning or Musyawarah Perencanaan Pembangunan (Musrenbang)

Participatory planning and budgeting defi nition is still limited in terms of bottom-up collective

decision making process from village/kelurahan to produce government unit working plan or

Rencana Kerja Perangkat Daerah (RKPD) at the provincial/district/municipal Musrenbang. The correct participatory planning should come from and dedicated to the community, and supported by all available resources. Citizens develop the plan, implement the program, evaluate the implementation supported by all available resources from the community as well as as from government and private sector

Figure 2.2. Musrenbang process for all levels of subnational government

RPJMD RENSTRA SKPD

RPJM

RKPD Draft

RENJA SKPD

MusrenbangProvince/District/

Municipality

MusrenbangProvince/District/

Municipality

Priority for Regional Development

MusrenbangSub

MusrenbangVillage

Priority for Sub-District Development

Priority for Village Development

SKPD Forum/Joint SKPD

Source: Processed based on Joint Circular between Ministry of Home Aff airs, and Bappenas on Technical Guideline on Mechanism of Musrenbang, 2005.

In overall, the quality of the development of participatory planning is still low. This is caused by limited capacity in formulating and coordinating the development planning and the limited time of Musrenbang (in most cases only one day of discussion). Thus, this process is unable to produce a qualifi ed and coordinated planning, which encompasses community’s needs. In addition, guidelines at village/sub-district Musrenbang are not suffi ciently informed and understood by both the committee and participantsone of the reasons is lack of planning document which is essential as reference and guidelines. For example, not all areas have Renja SKPD, or not many villages have any medium-term planning document. As a result, the implementation in Musrenbang at all levels tend to be a routine practice and simply to adhere to the regulation.


Proposals from community submitted through Musrenbang still not being fully accommodated

in the APBD. This is mainly because Musrenbang tend to focuses more on the technical aspect than on substance of the participatory planning. The situation is worsened by the absence of post-Musrenbang feedback mechanism to inform the communities about their recommendation’s status. Consequently, communities that submit the recommendation do not know whether it is accepted and received budget allocation. This leads to higher public distrust in Musrenbang, especially at district and village level, which is evident from lower public interest attending the Musrenbang. Moreover, with Musrenbang meeting held annually, without any actual implementation of activities proposed by the community, the community will build their own prejudice against the Musrenbang.

In general, the quality of regional development planning at district/municipal level is relatively low.

Planning documents at SKPD often missing its substance elaboration and not always available. For example, some districts have no strategic plan (Renstra) and work plan (Renja) for SKPD at all, or some of Renstra SKPD still not yet fully refer to RPJMD and not all Renja SKPD fully refer to SKPD strategic planning. Similarly, the temporary budget ceiling or Kebijakan Umum Anggaran/Perhitungan Plafon Anggaran Sementara (KUA/PPAS) which shows little correlation to subnational government work plan or Rencana Kerja Pemerintah Daerah (RKPD). Another example is SKPD work plan and budget or Rencana Kerja dan Anggaran (RKA) does not consistently follow Renja SKPD. As a consequence, a number of programs/activities included in the draft of subnational government budget (RAPBD/APBD) were never existed the planning documents. One of the possible solutions is having local regulation or Peraturan Daerah (Perda) on regional development planning system and mechanism in each district/municipality (similar to South Sulawesi Governor’s decree on SPPD) which of course, should not be confl icting with any existing regulations (Law 25/2004; PP 08/2008 and Permendagri 54/2010).

2.4 Development Planning and Subnational Budgeting

Planning and budgeting process in the region still faces a number of challenges. Among others, there are still mismatches between subnational development priorities in the government work plan (RKPD) and budget allocation in the regional budget (APBD). This is especially happen in a number of districts with less consistency and lack of discipline in implementing the development planning and budgeting. Developing a consistent subnational planning and budgeting will always be a challenge without having the same perspective and determining the interests of individuals, groups, sectors, and region challenge in. Another challenge is that provincial and district/municipal governments fail to be consistent and disciplined in following the schedule that has been set out. Process and stages to develop RKPD, which should be completed at the end of May, still not yet thoroughly followed, RKPD mechanism toward the discussion of the budget draft (RAPBD) in local parliament is often running late such discussion usually takes much time. In overall, limited human resource capacity is not the only challenge in development planning and budgeting, but interventions from various stakeholder with their own agenda is also contributed in the poor quality of planning and budgeting in South Sulawesi.



Figure 2.3. Process and stages of RAPBD formulation (Perspective of Permendagri 59/2007, from RKPD to RAPBD)

Subnational Government

Work Plan

End of May

Early June

Mid June

End of July

Early August 1st Week of October

End of November

Head of Region DPRD

Agreement of KUA_PPAS

MoU of KUA-PPAS

Head of Region DPRD

Draft of KUA-PPAS

Head of Region TAPD

Initial Discussion of

KUA-PPAS

RAPDB and draft of

elaboration

TAPD - DPRD

RKA-SKPD

RKA-PPKD

RKA-SKPD Circular Letter

Dissemination

DPRD

Source: Processed based on Minister of Home Aff airs Regulation (Permendagri) 59/2007 on Amendment regarding Permendagri 13/2006 on Guideline for Regional Financial Management.

There are a number of programs listed under Renja-SKPD that do not receive budget allocation in the

APBD, and vice versa. South Sulawesi budget in 2010 showed a number of health programs described in APBD were actually not listed in the 2010 Health SKPD strategic planning document. This situation occurred because hospitals and health center at district/municipal level have the authority in budgeting but not in program planning.


Table 2.5. Priorities in Health Offi ce strategic plan (Renja) 2010 compared to South Sulawesi’s APBD 2010

Renja-SKPD Health Offi ceProgram for Health Sector as allocated in South

Sulawesi’s APBD

Health insurance for public Health insurance for public

Improvement of safe labor for mother and baby Health improvement for mother and baby

Health improvement for baby and under fi ve Health improvement for baby and under fi ve

Health improvement for senior citizen Health improvement for senior citizen

Health service for the poor Health service for the poor

Improvement of public health Improvement of public health

Health service standardization Health service standardization

Supply of health instruments and medicine Supply of medicine/drug for health treatmentProcurement for supply of medicine and equipment

Promotion of Indonesian traditional medicine Promotion of Indonesian traditional medicine

Mitigation of KEP, AGB, GAKY, KVA and other micro

malnutrition cases

Improvement of nutrition for public

Supervision and control on food security Supervision and control on food security

Prevention and eradication of diseases Prevention and eradication of diseases

Health promotion and community empowerment Health promotion and community empowerment

Clean water and basic sanitation infrastructure

Maintenance and supervision of public sanitary

Supervision and mitigation of environmental

contamination

Currently not allocated in the APBD

Development of healthy dwellings Development of healthy dwellings

Administration service in government offi ces Administration service in government offi ces

Improvement of facility and infrastructure of local

offi cers

Improvement of facility and infrastructureImprovement of discipline among civil servantsImprovement of human resource capacity

Programs not priority in the Renja of SKPD Health

Offi ce

Development of reporting system for performance and fi nance

Partnership for better health serviceMaintenance, facility and infrastructure

enhancement, for RSIA Siti FatimahProcurement, improvement of facility and

infrastructure for Mental Hospital/General HospitalMaintenance for hospital’s facility and infrastructure

Source: Processed based on Renja-SKPD of Health Offi ce 2010 and APBD of South Sulawesi province 2010.

2.5 Subnational Financial Management and Performance Measurement

The Performance-Based Budgeting (PBB) has not been fully applied in all areas. This is partly because the local government offi cers have limited understanding and operating the PBB, as well as budget constraints. This is causing a situation where the local development performance can only be set based on the availability of government budget. As a result, the most urgent needs of the citizen may not be implemented due to budget constraint.



Figure 2.4. Performance-Based Budgeting within the framework of planning and budgeting consistency

Performance

Performance

Performance

Performance

Planning

Planning Budgeting

Consistency

The Principle of Effi ciency

The Principle of Economical

The Principle of Eff ectiveness

Performance-Based Budgeting

Source: Performance-Based Planning and Budgeting Module (Agussalim, 2011).

Measurable and appropriate performance indicators are not clearly stated in all ditricts/

municipalities and SKPD planning documents. Output indicators are used to measure performance of activity and programs undertaken by SKPD echelon IV, outcome indicators are to measure performance of program executed by Echelon III, and impact indicators are to measure the performance of policy enforced by echelon II or head of SKPD. The indicators will eventually appraise the accomplishment of governor’s development vision. there are still some inaccuracies in formulating those indicators. For instance, indicators are set without considering the load of the program and often not measurable. This will leave a challenge evaluating development achievements.

Figure 2.5. Performance achievement framework for subnational government

Regional Govt

IMPACT Indicator

OUTCOME Peformance Indicator

OUTPUT Indicator

Target

Program

Activity

Input

Vision & Mission

Echelon III

Echelon IV

SKPD

Source: Processed based on Joint Circular between Bappenas and the Ministry of Finance on Guideline for Planning and Budgeting Reformation, 2009.


South Sulawesi fi nancial management has improved signifi cantly in the last two years. Subnational government fi nancial reports or Laporan Keuangan Pemerintah Daerah (LKPD) have seen signifi cant improvement, obtaining Qualifi ed Opinion (WDP) in 2009, and Unqualifi ed Opinion (WTP) in 2010. This was a signifi cant achievement after two years in a row, in 2007 and in 2008 South Sulawesi received the lowest rating (Disclaimer). A number of districts have received similar good ratings but few others such as Palopo and Maros, are still struggling with the lowest rating. Particularly for Maros, it has been six years in a row for them to have Disclaimer rating. In 2010, only North Luwu obtained the Unqualifi ed Opinion, after in previous four years obtained Qualifi ed Opinion. Meanwhile, the Palopo City experienced a setback for having the Disclaimer rating, in spite of their previous three consecutive years of Unqualifi ed Opinions.

Table 2.6. BPK opinion on subnational government fi nancial statements in South Sulawesi, 2005-2010

No.Province, Districts and Municipalities

Opinion on subnational government fi nancial statements (LKPD)

2005 2006 2007 2008 2009 2010**)

1. South Sulawesi WDP WDP TMP TMP WDP WTP

2. Bantaeng WDP WDP WDP WDP WDP WDP

3. Barru WDP WDP WDP WDP WDP

4. Bone WDP WDP WDP WDP WDP WDP

5. Bulukumba WDP WDP TMP WDP WDP WDP

6. Enrekang WDP WDP WDP WDP WDP WDP

7. Gowa WDP WDP WDP WDP WDP WDP

8. Jeneponto TMP WDP TMP WDP *)

9. Selayar Islands TMP WDP TMP WDP *)

10. Luwu WTP WDP WDP WDP WDP *)

11. East Luwu WDP WDP TMP WDP WDP *)

12. North Luwu WDP WDP WDP WDP WTP

13. Maros TMP TMP TMP TMP TMP TMP

14. Pangkajene Islands WTP WDP WDP WDP WDP WDP

15. Pinrang WDP WDP WDP WDP WDP *)

16. Sidenreng Rappang WDP WDP WDP WDP WDP WDP

17. Sinjai WDP WDP WDP WDP WDP *)

18. Soppeng WDP WDP WDP WDP WDP *)

19. Takalar WDP WDP WDP WDP WDP WDP

20. Tana Toraja WDP WDP WDP WDP WDP *)

21. North Toraja WDP *)

22. Wajo WTP WDP WDP WDP WDP WDP

23. Makassar WDP WDP WDP WDP WDP *)

24. Palopo WDP WDP WDP WDP TMP TMP

25. Pare-pare WDP WDP WDP WDP WDP *)

Source: Summary of Audit Report on LKPD by BPK-RI, 2010.Note: *) Still under audit; **) Obtained from Bawasda of South Sulawesi.WTP (Unqualifi ed opinion), WDP (Qualifi ed Opinion), TW (Adverse Opinion), TMP (Disclaimer Of Opinion).



SKPD capacity in fi nancial reporting is still relatively poor. The issue is particularly highlighted by inaccurate and late fi nancial report submission. This condition happened in a number of SKPDs in some districts with high number of programs and activities, it happens not only to programs initiated by the districts but partly to the programs that are priority for national/provincial level, such as in education and health sectors. Limited human resource capacity of subnational governments has been the principal reason for the low capacity of SKPD in performing their fi nancial accountability report.

Internal and external supervision and monitoring on budget implementation should be performed

periodically and on a regular basis in each districts/municipalities. To provide assistance and coaching to provincial/district/municipality SKPD, internal audit can be conducted monthly, or at least quarterly by regional inspectorate. External audit conducted by the BPK can be up to two times a year, or an external audit on district/municipality by provincial inspectorate once a year.

2.6 Findings from the Subnational Financial Management Analysis

Analysis on subnational fi nancial management is based on Subnational Public Financial Management

(PFM) or Pengelolaan Keuangan Daerah (PKD) Assessment. Subnational Public Financial Management (PFM) is a series of process from planning, budgeting, budget execution, to evaluation and accountability (PP 58/2005). Assessment on PFM capacity was conducted to obtain a baseline sample of fi nancial management capacity in South Sulawesi which not only comply with the regulations, but also show the best practices of PFM. South Sulawesi PFM assessment was conducted at one provincial government and three districts/municipalities as samples, that are the City of Pare-pare, Jeneponto District which represents low income per capita district, and East Luwu which represents a proliferated district. The tool of the assessment was developed by the Ministry of Home Aff airs and the World Bank, it is a balance scorecard on nine strategic areas of PFM of Regional Regulatory Framework; Planning and Budgeting; Cash Management; Procurement of Goods and Services; Accounting and Reporting; Internal Control; Debt and Public Investment; Asset Management; as well as External Audit and Monitoring.

PFM performance of South Sulawesi provincial government and three districts/municipalities

of sample area are relatively good. This is seen from the total score of PFM assessment of the four governments which are above 60 percent. Provincial government receives the best score of 77 percent. When compared with some other provinces which PFM were analyzed recently, the South Sulawesi showed similar achievement with North Sulawesi (78%) and East Java (79%, temporary fi gure), and Southeast Sulawesi (60%, temporary fi gure). In general, among South Sulawesi governments, the PFM score of East Luwu as a new district is much better than other sample districts/municipalities.


Figure 2.6. PFM score from sample area in South Sulawesi

64.2%

70.1%

72.1%

73.8%

76.7%

Jeneponto

Average of 3 Districts/Municipalities

Pare-Pare

East Luwu

South Sulawesi Province

Regional Regulatory Framework

Planning and Budgeting

Cash Management

Procurement of Goods and Services

Accounting and Reporting

Internal Control

Debt, Grant and Public Investment

Asset Management

External Audit

Source: Result of PFM Survey conducted by the World Bank, 2011.

The District of East Luwu and Pare-pare are examples of local governments with good fi nancial

management. Based on assessment of the nine fi nancial management areas of PFM, the provincial government of South Sulawesi always occupies the best or second best position. East Luwu District and Pare-pare City received the highest score at district/municipal level. The average of district/municipal PFM in South Sulawesi is 64 percent. East Luwu achieved best scores in terms of Cash Management and Accounting and Reporting, whereas Pare-pare achieved the best for Regional Regulatory Framework. Jeneponto District, on the other hand, scores lower compared to the two governments’ PFM.

Table 2.7. PKD scores on sampled districts/municipalities for 9 areas of analysis

Jeneponto East Luwu Pare-PareProvince of

South Sulawesi

At an average of

3 Dist/Municp

1Regional Regulatory Framework 66.7% 76.2% 76.2% 71.4% 73.0%

2 Planning and Budgeting 50.0% 64.3% 64.3% 71.4% 59.5%

3 Cash Management 57.1% 71.4% 60.7% 67.9% 63.1%

4Procurement of Goods and Services 75.0% 81.3% 75.0% 87.5% 77.1%

5 Accounting and Reporting 55.6% 72.2% 55.6% 66.7% 61.1%

6 Internal Audit 64.7% 76.5% 70.6% 88.2% 70.6%

7 Debt, Grant, and Investment 90.0% 90.0% 90.0% 80.0% 90.0%

8 Asset Management 55.0% 60.0% 75.0% 75.0% 63.3%

9 External Audit 63.6% 72.7% 81.8% 81.8% 72.7%

Total Score 64.2% 73.8% 72.1% 76.7% 70.1%

Source: Result of PKD Survey conducted by the World Bank, 2011.



2.7 Conclusions and Recommendations Development agenda for district/municipality level has been aligned to the province’s RPJMD, but still

not aligned with the national development agenda stated in RPJMN. On the other hand the RPJMD of South Sulawesi has consistently described the national development agenda and priorities. This uncoordinated priority issue is partly due to some inconsistency in regulations, for example, Law 32/2004 with Law 25/2004.

At both provincial and district/municipal level, the SKPDs’ strategic plan (Renstra) and work plan (Renja) have not consistently elaborated all the priorities from the RKPD and RPJMD. In fact there are a number of SKPD with no annual planning documents. To address this issue the Government of South Sulawesi need to implement reward and punishment mechanisms for the SKPDs based on their RKPD and Renja completion.

Many districts are late in submitting their planning and budgeting documents, and there are a number of programs listed in Renja of several SKPDs that do not received budget allocation in the APBD, and vice versa. In addition, the quality of Musrenbang’s implementation and results is still poor, as indicated by how few communities’ recommendations accommodated through the Musrenbang. This is caused by extensive process in the executive and a drawn out decision-making process in the legislative. It is recommended that institutional strengthening and human resource development program should also engage the legislative. Audit can also be done on Musrenbang outcome to see to what extent the fi nal outcome of a Musrenbang can actually accommodate the initial proposals from the community.

In several districts/municipalities, RKPD and RAPBD/budget is still weakly correlated, This is indicated by some programs and priorities in RKPD and Renja SKPD not being budgeted in RAPBD/APBD, and vice versa. To address this issue subnational budget team or Tim Anggaran Pemerintah Daerah (TAPD) and Legislative Budget Committee or Panitia Anggaran Legislatif (PAL) should make RKPD and Renja SKPD as their main reference in preparing budget issuance or Daftar Pengisian Anggaran (DPA) and the proposed budget/budget.

Government offi cers and program/fi nancial managers/planners are still lacking capacity and competence in applying the performance-based budgeting. The concrete action to be taken such as: (1) Placing planning offi cers with background or experience on development planning or have had some trainings in it. (2) Placing fi nancial management offi cers with economic background or specifi c public fi nance accounting and/or have had regional PFM trainings.

The internal and external monitoring (audit) still focus more on the budget documents and how they compare to the planning documents. In this regard what needs to be done is the implementation of external and internal audit to the planning document and budgeting, as well as to clarify the correlation between them.

Despite a number of shortcomings and issues in development planning and fi nancial management, the Provincial Government of South Sulawesi received a well note in PFM analysis conducted by the World Bank. In addition, two out of three sample districts, the District of East Luwu and City of Pare-pare also showed a good accomplishment. These districts can serve as both the learning center and example for other regions on PKD, at least in terms of availability of the documents.

Chapter 3 Subnational Revenue


3.1 General Profi le of South Sulawesi Revenue

South Sulawesi (province and district/municipality) revenue has increased nearly doubled during the

period of 2005-2010. During that period, subnational revenue had increased from IDR 9 trillion in 2005 to IDR 16 trillion in 2010, with an average growth of 13 percent per year. Subnational revenues managed by districts/municipalities had increased from IDR 7.4 trillion in 2005 to IDR 13 trillion in 2010 with an average growth of 14 percent per year, while provincial revenue increased from IDR 1.6 trillion in 2005 to IDR 2.5 trillion in 2010 with an average growth rate of 9 percent per year. Most of the revenue in South Sulawesi is managed by districts/municipalities. During the period of 2005-2010, proportion of average district/municipality income to total revenues is 84 percent per year.

Figure 3.1. South Sulawesi real subnational revenue, 2005-2011

1,6 1,9 2,2 2,4 2,3 2,5 2,7

7,4

10,912,3 12,1 12,3 13,4 13,2

02468

1012141618

Tri

llio

n I

DR

South Sulawesi Revenue

2010=100

Province District/Municipalities

18 15 15 16 16 15 17

82 85 85 84 84 85 83

0%10%20%30%40%50%60%70%80%90%

100%

2005

2006

200 7

2008

200 9

2010

*

2011

**

Proportion of District/Municipal

Revenue to Total Revenue

Province District Municipalities

Source: Processed based on South Sulawesi districts/municipalities and provincial APBD.Note: 2005-2009 APBD-Realization, 2010 APBD-Revision, 2011 Main APBD.

South Sulawesi’s dependency toward central government transfers remains very high. During the period of 2005-2010, the province’s revenue derived from Balancing Fund reached an average of IDR 10 trillion per year. The central transfers’ contribution to South Sulawesi revenue is around 69-83 percent or 76 percent on average during 2005-2010. Subnational revenue generated from Own Source Revenue (PAD) is still relatively small at around 15 percent. Another 8 percent was contributed by Other Revenues. The value and the proportion of the Balancing Funds toward Revenue refl ect South Sulawesi Government’s dependency toward central government transfers.



Figure 3.2. Composition of South Sulawesi real revenue, 2005-2011

1.5 1.7 2.1 2.1 2.2 2.4 2.7

7.0

10.611.6 11.2 11.2 10.9 11.40.5

0.60.9 1.1 1.1

2.5 1.8

0

2

4

6

8

10

12

14

16

18

Tri

llio

n I

DR

PAD Balancing Funds Others

16 13 14 15 15 15 17

78 83 79 78 78

6971

6 4 6 8 7

1611

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005

2006

2007

200 8

2009

2010

*

2011

**

Proportion to Total Revenue

PAD Balancing Funds Other Revenues

Source: Processed based on districts/municipal and provincial APBD of South Sulawesi.Note: 2005-2009 APBD-Realization, 2010 APBD-Revision, 2011 Main APBD.

Subnational revenue of provincial government is mostly derived from own source revenue or

Pendapatan Asli Daerah (PAD). The PAD had increased from IDR 942 billion in 2005 to IDR 1.4 trillion in 2010. PAD proportion to total provincial revenue had increased from 52 percent in 2006 to 58 percent in 2010 with an average of 56 percent per year. In 2011, revenue from the PAD is projected to account for about 62 percent of total province’s revenue. Contribution from the Balancing Funds to the province’s revenue is in average 42 percent whereas Other Revenues is only about 1 percent per year.

In contrast, fi scal resource for districts/municipal governments is dominated by the Balancing Funds. In 2005, district/municipal government revenue from the Balancing Fund amounted for IDR 6.4 trillion or 86 percent of total revenue, showing an increase of IDR 10 trillion in 2010 (74%). The high contribution of revenue from the Balancing Fund implies that district/municipal government still somewhat dependent to transfer from central government. Nonetheless, districts/municipal’s government’s attempts to improve their PAD have been recognized. It is seen from the increase in revenue of IDR 523 billion in 2005 to IDR 987 billion in 2010. During the period of 2005-2010, the share of district/municipal average own source revenue or PAD in South Sulawesi was 7 percent per year.

Fiscal resources of districts/municipalities in South Sulawesi are varied and tend to be uneven. The

City of Pare-Pare (IDR 3.8 million) and the District of Selayar (IDR 3.4 million) both have the largest revenue per capita in South Sulawesi. Other districts with the lowest revenue per capita are Bone, Makassar and Gowa with average IDR 1.1 million. All three are also those with the largest population in South Sulawesi. As for other districts, their revenue per capita range from IDR 1.5 million - IDR 2.7 million. Such diff erence indicates the fi scal resources disparity still exists between districts/municipalities in South Sulawesi.


Figure 3.3. Composition of per capita income by district/municipality in South Sulawesi, 2010

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Mil

lio

n I

DR

PAD Balancing Funds Others


The City of Pare-Pare has the largest PAD in 2010 and Jeneponto District the lowest. In 2010, PAD per capita of Pare-Pare City was IDR 344,000 whereas the lowest of IDR 43,000 was from the District Jeneponto. In the same year, the highest transfer funds per capita was in the District of Selayar at IDR 2.7 million whereas the lowest in Makassar at IDR 648,000.

3.2 Own Source Revenue or Pendapatan Asli Daerah (PAD)

Own source revenue, or Pendapatan Asli Daerah (PAD) of South Sulawesi (Provincial and District/

Municipality) has increased almost twofold; mostly came from local taxes. The 2005 PAD at IDR 1.5 trillion increased to IDR 2.4 trillion in 2010. PAD portion to total subnational revenue since 2006 has increased by 13 percent to 15 percent in 2010. Local taxes are the largest contributor to the local revenue by 64 percent. Revenues from Local Taxes increased from IDR 971 billion in 2005 to IDR 1.6 trillion in 2010. Local Tax Revenues from the provincial government increased from IDR 788 billion in 2005 to IDR 1.2 trillion in 2010, mostly from vehicle tax and property tax. Levy accounts for an average of 18 percent for PAD.

Figure 3.4. Composition of South Sulawesi Own Source Revenue, 2005-2011

971 1,0791,246 1,394 1,360

1,5261,875

294323

319348 400

524

501

8887

262120 187

124

12816%

13%14% 15% 15% 15%

17%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

2005 2006 2007 2008 2009 2010* 2011**

Bil

lio

n I

DR

112202

266 260 208

235

232




Composition of PAD per capita varied between districts/municipalities in 2010. The largest PAD was contributed by the city of Pare-Pare, it was around IDR 344,000 and the second largest came from the District of Pangkep at IDR 241,000. The largest component in the PAD of Pare-Pare is from local levy with a value of IDR 231,000 and in Pangkep, Local Tax contributed as much as IDR 129,000. District with the smallest per capita revenue is Jeneponto with IDR 43,000.

Figure 3.5. Comparison of district/municipal PAD per capita in South Sulawesi, 2010

-50,000

100,000 150,000 200,000 250,000 300,000 350,000 400,000

Tax Levy Other PAD

Source: Processed based on APBD-Revision of 2010.

3.3 Balancing Fund

Subnational revenue derived from General Purpose Grants or Dana Alokasi Umum (DAU) (Provincial

and District/Municipality) has increased but its proportion to total subnational revenue decreased.

The increase in DAU nearly doubled from IDR 5.6 trillion in 2005 to IDR 9 trillion in 2010. The proportion of DAU to total subnational revenue of South Sulawesi fell from 62 percent in 2005 to 54 percent in 2010. In average DAU proportion to total revenue reaches 61 percent per year.

DAK contribution to subnational revenue is relatively small, but it tends to increase at districts/

municipal level. During the period of 2005-2010, the average proportion of Specifi c Purpose Grants or Dana Alokasi Khusus (DAK) was 7 percent per year. This amount is only slightly smaller than shared-revenue fund or Dana Bagi Hasil (DBH) which was 9 percent per year. Yet the amount of DAK increased nearly three times from IDR 384 billion in 2005 to IDR 985 billion in 2010. DAK contribution to total revenue at district/municipality level has increased, from 6 percent in 2005 to 13percent in 2010.

Figure 3.6. Composition of Balancing Fund in South Sulawesi, 2005-2011

1,038 1,174 1,427 1,208 1,108 1,374 1,158

5,579

8,563 8,944 8,644 8,661 8,573 9,063

62.066.7

61.5 60.0 60.254.0 57.0

4.3 6.7 8.2 9.3 9.7 6.2 7.2

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

0

10

20

30

40

50

60

70

80

2005 2006 2007 2008 2009 2010* 2011**

Billio

n iD

RPe

rce

nt

Shared Revenue % DAU % DAK

Source: Processed based on districts/municipalities and provincial APBD of South Sulawesi.Note: 2005-2009 APBD-Realization, 2010 APBD-Revision, 2011 Main APBD.


More than half of the revenue from DAU is allocated to district/municipal governments.. The DAU received by district/municipal governments had increased from IDR 5 trillion in 2005 to IDR 8.3 trillion in 2010. In the period of 2005-2010, the average DAU share managed by district/municipal government was 92 percent per year, and only about 8 percent is allocated to the provincial government. General Purpose Grants in the province increased from IDR 464 billion in 2005 to IDR 706 billion in 2010 or in average they received IDR 667 billion of DAU per year.

Figure 3.7. Comparison between DAU in South Sulawesi by levels of government

464 662 737 722 7077 06 769

5,1157,900 8,207 7,922 7,954 7,867 8,294

91.7 92.3 91.8 91.6 91.8 91.8 91.5

0

10

20

30

40

50

60

70

80

90

100

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 2006 2007 2008 2009 2010* 2011**

Pe

rce

ntB

illi

on

ID

R


Shared-revenue from tax or DBH Pajak increased signifi cantly and mostly managed by district/

municipal governments rather than the provincial. Revenue from DBH for district/municipality had increased by IDR 298 billion, from IDR 837 billion in 2005 to IDR 1,135 billion in 2010. At the provincial government, the DBH they received in 2005 amounted to IDR 201 billion, had increased to IDR 239 billion in 2010. The average proportion of DBH to total Balancing Fund at district/municipal level was only 11 percent per year. This shows that contribution of DBH Pajak is still very small.

The DAU per capita from central government to district/municipal governments in South Sulawesi

is varied. In 2010, District Selayar and City of Pare-pare received the highest DAU transfer per capita at IDR 2 million. Other districts/municipalities with a relatively dense population, such as City of Makassar and Gowa obtained relatively low DAU per capita compared to district/municipalities with relatively smaller population. DAU per capita of Makassar City was at IDR 481,000 whereas District of Gowa IDR 661,000.

Figure 3.8. Comparison of Balancing Fund per capita by district/municipality in South Sulawesi, 2010

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

DAU DAK Shared Revenue




3.4 Other Revenues

Realization of subnational revenue derived from Other Revenues was fl uctuating during the period

of 2005-2010, both at the provincial and district/municipal level. At provincial level, Other Revenues has increased from IDR 18 billion in 2005 to IDR 59 billion in 2010. While at district/municipalit tends to increase until 2010. This revenue is actually part of transfer or emergency fund from higher levels of government, so the amount received by district/municipal government increases in accordance with the amount of provincial government’s transfer expenditure.

Figure 3.9. Other Legitimate Revenue at provincial and district/municipal level in South Sulawesi, 2005-2010

18 35 9 4 20 59 0

520 516880 1,085 1,161

2,481

1,814

0

500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 2008 2009 2010* 2011**

Bil

lio

n I

DR

Province District/Municipality


3.5 Regional Financing

South Sulawesi has a surplus of income over the period 2005-2007, but experienced a defi cit during

2008-2011. Surplus revenues peaked in 2006 with the real value of IDR 2,514 billion. Surplus of income for the period 2005-2007 occurred in almost all districts/municipalities. This indicates the government budget absorption is quite low. Most of APBD surplus is then used for repayment of principal loan due, transfer to the reserve fund and equity investment.

The defi cit of APBD was funded from the remaining balance from previous budget year or Sisa Lebih Perhitungan Anggaran (SiLPA) and local loans. In 2008, the government of South Sulawesi experienced the largest budget defi cits amounting to IDR 902 billion. High defi cit in 2008 was primarily due to decreasing subnational revenues particularly at districts/municipal level that comes from Balancing Fund and PAD, at the same time subnational government expenditure increased signifi cantly. In 2008, SiLPA decreased from IDR 2,095 billion to IDR 780 billion in fi scal year 2010. In 2009-2010, defi cit was mainly caused by regional borrowing which has increased dramatically from IDR 69 billion to IDR 305 billion in 2010. This underlines the predominant role of regional borrowing to fi nance development in the province.


Figure 3.10. Surplus/Defi cit of APBD of South Sulawesi, 2005-2011

-10 110 -27 -128 69 -261 -71

1,033

2,404

614-773

-421-627

-285

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

2005

2006

2007

2008

2009

2010

*

2011

**

Bil

lio

n I

DR

Province District/Municipality


The provincial government experienced defi cit almost every year, while district/municipal

governments had it in the last four years. At the provincial level, the largest defi cit occurred in 2010, amounted to IDR 261 billion which later reduced to IDR 71 billion in fi scal year 2011. The largest budget defi cit at district/municipal level was IDR 773 billion in 2008. The high defi cit faced by provincial and district/municipal government is in line with rapid increase of government spending. Fiscal resources to cover defi cit, at provincial and district/municipal level includes SiLPA and other fi scal resources as set forth in Law 32/2004.

3.6 Conclusions and Recommendations

Real subnational revenue in South Sulawesi is increased and mostly managed by district/municipality, but the biggest contributor to the subnational revenue is the balancing funds. This means that the province’s dependence toward central government’ fi scal resources is still quite high. Consequently, the province still needs to increase its own source revenue to get aligned with the objectives of regional autonomy, as well as at the district/municipal level. Some operational measures that might improved subnational revenue include: (i) Reviewing and expanding the potential of local taxes and levies (though small in value) by taking into account the latest Law on Regional Tax and Retribution, (ii) Improving the administration system of subnational tax collection and levies to suppress the leakage, (iii) Provide training on taxation for subnational government offi cials, especially related to selecting targets based on potentials, (iv) Providing proportional incentives to Regional Tax and Retribution collector, (v) Assessing the factors that cause low and unstable own source revenue generated from management of regional capital (pengelolaan kekayaan daerah yang dipisahkan) and other legitimate PAD, (vi) evaluating the eff ectiveness of local regulations or Peraturan Daerah (Perda) associated with the eff orts to increase revenue, (vii) evaluating the appropriateness of services provided to the public and the levy charged.



Shared revenue (DBH) received by the provincial government from tax has increased, but for district/municipality the amount is not signifi cant. This is because the DBH is generally sourced from vehicle tax and property tax applied to the provincial building. To increase local revenue sources, a number of operational measures are recommended: (i) Review on potential sources of Other Revenues at the district/municipal level, (ii) evaluation on the proportion of Tax-Shared Revenue (DBH Pajak) transfer to district/municipal government.

The gap of revenue per capita between some districts/municipalities in South Sulawesi varies and quite high, infl uenced by PAD and the Balancing Funds. In the future, provinces cannot rely on transfers from central government, but should increase their own source revenue. Districts with lowest PAD per capita among others are Jeneponto, Gowa and Bone. Or districts with large Balancing Fund and small PAD such as Barru and Bantaeng.

South Sulawesi Government experienced defi cit almost every year. This is demonstrated by the large SiLPA on current budget year. Another source of defi cit is payments for principal loan which are due. The need for funding to carry out the development is still relatively large, while the government’s existing sources of revenue to meet this demand is still quite limited. Local governments need to increase their capacity to manage the debt to avoid being trapped in debt.

Chapter 4 Subnational Expenditure


4.1 General Profi le on South Sulawesi ExpenditureIn 2005-2010, South Sulawesi’s total expenditure more than doubled. In 2005, the province’s total expenditure of IDR 8.7 billion increased signifi cantly to IDR 18.3 trillion in 2010. Although government expenditure is increasing every year, but the growth over the period 2005-2010 was fl uctuating at an average of 17 percent per year. Average share of expenditure administered by district/municipal governments is 74 percent per year, while 15 percent is administered by provincial government, and the rest are central government funds (deconcentration and co-administration).

Figure 4.1. Government expenditure in South Sulawesi, 2005-2011

1,635 1,814 2,252 2,480 2,250 2,642 2,776

6,347

8,508

11,700 12,826 12,516

14,052 13,491

701

1,564

1,882

1915 14 14 13 14 17

73 72 74 7572

83

0

10

20

30

40

50

60

70

80

90

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2005 2006 2007 2008 2009 2010* 2011**

Pe

rce

nt

Bil

lio

n I

DR

Deconcentration and Co-AdministrationDistrict/Municipality

Province

Share of Province

Share of District

1,832 2,638

1,632 77

Source: Processed based on districts/municipal and provincial APBD in South Sulawesi.Note: 2010 APBD-P, 2011 main APBD, Deconcentration/co-administration NA, 2011.

Most of government expenditure in South Sulawesi

is administered by district/municipality. In 2010, total expenditure of district/municipal governments was IDR 14 trillion, and increase from IDR 6.4 trillion in 2005.This fi gure represented 75 percent of total government expenditure. The signifi cant increase was mainly contributed by the increase in personnel expenditure which still dominated by government expenditure, with an average expenditure of IDR 5.3 trillion, the average of capital expenditure was IDR 2 trillion. Meanwhile, the provincial government expenditure increased from IDR 1.6 trillion to IDR 2.6 trillion in 2010.

The fund from national budget (APBN)

administered by government agencies has not

changed signifi cantly in 2007-2010. In 2009, the National Budget allocation for district/municipal agencies was IDR 10 trillion, an increase from the 2007 fi gure of IDR 8.5 trillion. Although in 2010 the amount declined, but this fi gure is still temporary. On average, APBN funds administered by government agencies in South Sulawesi reached IDR 8.8 trillion per year.

Figure 4.2. APBN/PHLN fund administered by government agencies in South Sulawesi, 2007-2010

8.5 7.9

10.2

8.6

-

2

4

6

8

10

12

2007 2008 2009 2010*

Tri

llio

n I

DR

Source: Bappeda South Sulawesi province, 2011.Note: 2010 represents temporary fi gures.



Per capita expenditure of district/municipalities in South Sulawesi varies. Three regions with the highest per capita expenditure that also have the highest per capita income are City of Pare-Pare, District of Selayar, and Enrekang. This means that citizens in those regions received relatively larger allocation of expenditure compared to those residing in other districts/municipalities in the province. Likewise, in the districts/municipalities with the lowest expenditure per capita in parallel with the lowest income per capita are the City of Makassar, and District of Bone and Gowa. Expenditure per capita in South Sulawesi is infl uenced more by number of population rather than the amount of fi scal allocation..

Figure 4.3. Expenditure per capita of districts/municipalities in South Sulawesi, 2010

1,125,939

4,421,556

-500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000

IDR

Source: Processed based on APBD-revision of district/municipality, 2010; BPS.

4.2 Expenditures by Economic Classifi cationSouth Sulawesi expenditure is dominated by personnel spending. Proportion of personnel spending to total government expenditure in 2005 increased from 45 percent to 49 percent. This number was due to the large number of civil servants whose salaries have to be paid from the personnel spending. Capital expenditure is the second largest contributor to total expenditure in South Sulawesi. Capital expenditure has doubled from IDR 1.8 trillion (2005) to IDR 3.7 trillion (2010). The proportion of capital expenditure is in average 26 percent. Goods and Services expenditure accounts for an average of 18 percent and other expenditure (transfer) is 12 percent.

Figure 4.4. Personnel spending dominated South Sulawesi expenditure, 2005-2011

3,631 3,9696,066 6,509 6,766

8,109 8,4871,6742,294

2,187 2,318 2,476

2,757 2,865

1,761

2,982

4,0514,423 4,043

3,734 2,967

916

1,077

1,6492,056 1,481

2,096 1,948

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2005

2006

200 7

2008

2009

2010

*

2011

**

Bil

lio

n I

DR

Personnel Goods and Services Capital OthersPersonnel Goods and Services Capital Others

45%38% 43% 43% 46% 49% 52%

21%22% 16% 15%

17% 17%18%

22% 29% 29% 29%27% 22% 18%

11% 10% 12% 13% 10% 13% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005

2006

2007

2008

2009

2010

*

2011

**

Source: Processed based on districts/municipal and provincial APBD in South Sulawesi.Note: 2010 APBD-Revision; 2011 main APBD.


At provincial level, proportion of expenditure from government transfers still dominates total government

expenditure in South Sulawesi. The proportion of transfer spending increased from 30 percent (2005) to 42 percent (2010) or from IDR 492 billion to IDR 1.1 trillion. One of the reasons for the high transfer spending of the provincial government is the fund allocation for free education and free health service program executed by district/municipal governments. Personnel expenditure is the second largest expenditure of the provincial government, with a relatively unchanged average proportion of 26 percent per year.

The increase in transfer spending reduces the proportion of capital spending. Figure 4.5 shows the proportion of capital spending to total government expenditure which had fallen from 19 percent in 2005 to 13 percent in 2010, whereas proportion of goods and services expenditure remained relatively unchanged. The decrease in capital expenditure was because provision of physical facilities has been decentralized to districts/municipalities.

Figure 4.5. Expenditures by economic classifi cation for province and district/municipality, 2005-2011

26%

0%

20%

40%

60%

80%

100%

Province

Personnel Goods and Services

Capital Transfer (Others)

29% 26% 23% 26% 28% 24%

22% 25%20% 20%

22%22% 20%

19% 17%17% 14%

14%13% 12%

30% 32%39% 40% 36% 42% 41%


Capital Transfer (Others)

50% 41% 47% 46% 49% 53% 58%

21%22% 15% 14% 16% 16% 17%

23% 31% 31% 32% 30% 24% 19%

7% 6% 6% 8% 5% 7% 6%

0%

20%

40%

60%

80%

100%

District/Municipality

Source: Processed based on districts/municipal and provincial APBD in South Sulawesi.Remarks: 2010 APBD-Revision; 2011 main APBD.

Composition of expenditure in the districts/municipalities has not improved much. Personnel spending

dominate expenditure allocation at district/municipal level, with no visible decrease. During 2005-2010, the average share of personnel spending to total expenditure at district/municipal level was 45 percent per year, while the average share of capital spending was only 25 percent per year. Reduction in capital spending at provincial level is not followed by any increase of capital spending at districts/municipalities. Proportion of capital spending to total expenditure at districts/municipalities had declined from 31 percent in 2006 to 24 percent in 2010.

Most of the districts/municipalities spend more than 50 percent on personnel spending. During 2005-2010, there was a trend of an increase in the proportion of personnel spending in almost all districts/municipalities. In 2010, 15 districts/municipalities in South Sulawesi spent more than 50 percent of their budget for personnel spending. In fact, the District of Soppeng, City of Makassar and Palopo allocate over 60 percent of their total expenditure for that item.

4.3 Expenditures by SectorGeneral administration received the highest allocation of expenditure. General administration expenditure (excluding transfers) almost doubled from IDR 2.7 trillion in 2005 to IDR 4.4 trillion in 2010. Average proportion of general administration expenditure to total expenditure (provincial and district/municipal) is 27 percent per year.



On the same period, the average share of infrastructure expenditure is 16 percent, education received 25 percent, and the remaining budget distributed among other sectors. Although general administration expenditure dominates government expenditure, its proportion to total expenditures tends to decline until 2010.

Strategic sector expenditure has increased. Education sector has the highest increase in expenditure allocation. Education expenditure had increased from IDR 1.7 trillion in 2005 to IDR 5.2 trillion in 2010 or in average increase as much as 27 percent per year. Health expenditure increased from IDR 658 billion (2005) to IDR 1.7 trillion (2010), it has grown at an average of 22 percent each year. However, its proportion to total expenditure is relatively unchanged (9%). Infrastructure expenditure increased until 2008, but then declined for the next two years. This is due to the construction of new terminal and runway of Sultan Hasanuddin Airport which was completed in 2008, in which the land acquisition costs was paid by the subnational government.

Figure 4.6. South Sulawesi expenditure (province and districts/municipalities) by Sector, 2007-2011

2,676 3,290 3,600 3,923 3,346 3,661 4,0421,049

1,7542,474 2,743 2,703 2,476 2,0651,668

2,030

3,5093.703 4,159 5,138 5,001

658

839

1,2181,378 1,530

1,739 1,625

916

1,077

1,6492,056 1,481

2,096 1,948

2,000

4,000

6,000

8,000

10,000

General AdministrationEducationAgricultureOthers

InfrastructureHealthMaritime and FisheryTransfer

12,000

14,000

16,000

18,000

Bil

lio

n I

DR

General AdministrationEducationAgricultureOthers

InfrastructureHealthMaritime and FisheryTransfer

34% 32% 26% 26% 23% 22% 25%

13% 17%18% 18% 18% 15% 13%

21% 20% 25% 24% 28% 31% 31%

8% 8% 9% 9% 10% 10% 10%

11% 10% 12% 13% 10% 13% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Provincial government expenditure is mostly allocated for general administration and infrastructure.

In addition to the increasing transfer, general administration expenditure of the provincial government also increased from IDR 401 billion to IDR 512 billion. However, the proportion decreased from 25 percent to 19 percent. On the other infrastructure expenditure almost doubled, from IDR 174 billion to IDR 342 billion. Provincial government’s infrastructure expenditure reached the highest realization in 2008 in time with the completion of the construction of Sultan Hasanuddin International Airport.

At the district level, education sector dominates the expenditure. Education expenditure at district/municipal level had increased nearly four times from IDR 1.6 trillion to IDR 5 trillion in 2010. The proportion of education expenditure also continued to increase up to 42 percent in 2010 exceeding the general administration expenditures of 26 percent. This increase is in line with the increasing provincial government transfer expenditure. However, it is worth noticing that 75 percent of education expenditure is allocated to personnel spending. The proportion of health expenditure also increased to 12 percent (2010). As with the provincial government, the proportion of personnel spending of the district/municipality also declined from 36 percent to 26 percent, although the nominal is increasing.


Figure 4.7. Expenditure for strategic sector of provincial and district/municipal governments

401 435 473 491 466 512 510

25% 24%

21%20%

21%19%

18%

0%

5%

10%

15%

20%

25%

30%

0

200

400

600

800

1,000

1,200

1,400

1,600

Bil

lio

n I

DR

Province

174 188 257 406 298342 416

General Administration

Education

Agriculture

Infrastructure

Health

% of Infrastructure

% of Education % of Health

% of General Administration

2,2753,127 3,432 2,881 3,149 3,532

3,3923,599

4,052

5,0284,893

25%27%

35%33%

39%41% 40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

2,000

General Administration

Education

Agriculture

Infrastructure

Health

% of Infrastructure

% of Education % of Health

% of General Administration

4,000

6,000

8,000

10,000

12,000

Bil

lio

n I

DR


2,856

1,585 1,913


Expenditure for agriculture, marine and fi sheries sector is relatively small. At district/municipal level, the average proportion of expenditure for agriculture to total expenditure only range at 3 percent per year and at provincial level it was only 4 percent per year. Most agriculture expenditure is largely allocated to personnel spending at an average of 49 percent per year.

4.4 Gender-related Expenditure in South SulawesiIn 2007-2010, gender responsive budget in South Sulawesi shows an upward trend, albeit in a very small

proportion. The size of gender responsive budget in South Sulawesi can be seen from the expenditure allocated for the Women’s Empowerment and Child Protection Agency as a unit which has the executive task and function to execute gender mainstreaming or Pengarus Utamaan Gender (PUG). Total expenditure for the agency was IDR 555 million in 2007 and increased to IDR 25 billion in 2010 and is planned to be increased to IDR 32 billion in fi scal year 2011. Expenditure for women’s empowerment (province plus district/municipality) to total expenditure in South Sulawesi ranged from 0 to 0.19 percent or averagely 0.10 percent per year during 2007-2010.

At provincial level, budget administered by Women’s Empowerment Agency had increased during 2009-

2010. In 2010, the amount of budget administered by Women’s Empowerment Agency was around IDR 5.2 billion and is expected to increase to IDR 5.59 billion in 2011. At the provincial level, the portion of the agency expenditure to total expenditure was 0.01 percent in 2009 and 0.20 percent in 2010. The small portion of PUG-related budget certainly has no big impact on the success of PUG strategy. Eff orts to promote gender equality and fairness must be accompanied by a more adequate budget. The largest component of expenditure is personnel expenditure, which is more than 50 percent, followed by goods and services expenditures of 40 percent, and the rest is for capital expenditure.



Figure 4.8. Gender responsive budget by Women’s Empowerment Agency at provincial and district/municipal level in South Sulawesi, 2007-2011

0.15

5.22 5.59

-- 0.01

0.20 0.20

-

0.05

0.10

0.15

0.20

0.25

0

1

2

3

4

5

620

07

2008

2009

2010

*

2011

**

Pe

rce

ntB

illi

on

ID

R

Province

Women's Empowerment Spending

% to Total Expenditure

Women's Empowerment Spending

% to Total Expenditure

0.56

10.96

27.55

20.23 26.43

0.00

0.09

0.22

0.14

0.20

-

0.05

0.10

0.15

0.20

0.25

-

5.00

10.00

15.00

20.00

25.00

30.00

2007

2008

2009

2010

*

2011

**

Pe

rce

nt

Bil

lio

n I

DR



At district/municipal level, budget administered by Women’s Empowerment and Child Protection Agency

also showed an increasing trend except in 2010. In 2007, expenditure for the agency had increased from IDR 0.56 billion to IDR 27 billion in 2009 but dropped to IDR 20 billion in 2010. The agency’s portion of expenditure to total expenditure at district/municipality had increased by 0.22 percent in 2009, but in 2010 dropped to 0.14 percent. The decline was primarily due to changes in the organizational structure. Before 2010, Women’s Empowerment and Child Protection Agency was under the Regional Secretariat. With the new government organizational structure the agency is now under Women’s Empowerment and Family Planning Board.

At provincial level, allocation for personnel expenditure is almost equal to the allocation for for goods

and services expenditure, while at district/municipal level, personnel expenditure is more dominant. In FY 2010, personnel expenditure at the provincial government received IDR 2.4 billion of budget allocation and in FY 2011 the fi gure is expected to be increased to IDR 2.9 billion, while goods and services expenditures in 2010 was IDR 2.4 billion and in 2011 IDR 2.3 billion. At district/municipal level, personnel expenditure was IDR 12.7 billion and in 2011 IDR 19.5 billion, while goods and services expenditures is only around IDR 5 billion.


Figure 4.9. Expenditures by economic classifi cation for Women’s Empowerment and Child Protection Agency in South Sulawesi, 2010-2011

2.37 2.38

0.48

2.87

2.31

0.41

-

0.50

1.00


Capital

1.50

2.00

2.50

3.00

3.50

Bil

lio

n I

DR

Province


Capital

12.71

5.03

2.48

19.50

4.71

2.21

-

5.00

10.00

15.00

20.00

25.00

Bil

lio

n I

DR



Expenditure for gender responsive main programs in the Women’s Empowerment Agency in South

Sulawesi varies. In 2010, one of the programs able to absorb signifi cant amount of budget was institutional strengthening and development for women with a budget of IDR 692 million, followed by the quality of life improvement program and women protection programs with the budget IDR 372 million and then the child protection program with the budget IDR 262 million. Share of the budget for that three programs is relatively higher compared to other programs, indicating that the government place high priority on institutional strengthening and improvement of the quality of life for women and child protection. In 2011, although the budget allocation for institutional strengthening was declining, but the program still receives higher allocation compared to other programs.

Figure 4.10. Allocation of expenditure for PUG-programs at provincial level varies

Million IDR

161.3

174.55

99.3

133.15

692.1

262.05

372.45

131.33

217.6

345.94

56.51

157.45

96.79

424.34

263.96

426.98

292.92

156.42

Development of Civil and Household Data/Information

Quality Improvement of Parenthood and Child Development

Teenage Reproduction

Family Planning

Institutional Strengthening and Development of Women

Improvement of Life Quality and Child Protection

Improvement of Life Quality and Women's Protection

Institutional Strengthening of PUG

Policy Harmonization of PUG

Programs of Provincial Women's Empowerment and Child Protection Agency

Source: Processed based on districts/municipal and provincial APBD in South Sulawesi.Note: 2010 APBD-Revision; 2011 main APBD. (in million IDR).



4.5 Conclusions and Recommendations Real government expenditure in South Sulawesi had increased in 2005-2010. This indicates an

increasing role of subnational governments to deliver services to citizens and meet their growing needs. However, the increasing government expenditure is not followed by a good management of that expenditure, as refl ected in a considerable disparity of expenditure by economic classifi cation, by sector or by function. To minimize such disparity, subnational governments need to pay more attention to fi nancial management aspects consisting of planning, implementation, and monitoring and evaluation..

The proportion of personnel expenditure to total expenditure at provincial and district/municipal

level is relatively large, while the proportion of capital expenditure is still relatively small. The large proportion of personnel expenditure to total expenditure indicates that government must pay for a large number of civil servants. Appropriately in the future, the proportion of personnel expenditure must be reduced to allow capital expenditure to increase. In order to achieve that, the policy recommendations are: (i) Moratorium on personnel recruitment (not adding new staff ) for the next 2-3 years, (ii) Recruit more of technical staff such as accountants, health workers and engineers in a smaller number than the number of civil servants retiring.

The largest share of expenditure is personnel spending on education sector and it shows an increasing

trend over the years. In this regard, the policy recommendations are: (i) it is imperative that for the next few years, the government of South Sulawesi should not add or recruit more teachers, but instead create a better redistribution of the existing teachers from urban to rural areas where local schools are lacking teachers. Or from districts having higher ratio of teacher-student to districts/municipalities where such ratio is still low, (ii) teacher certifi cation policies need to be more selective so that the burden of the budget could be reduced and should be followed by monitoring and sanctions for teachers who have received such certifi cate but fail to show an increased performance (quality educational services).

Expenditure allocation by sector varies and highly unequal, in which the education, infrastructure

and public administration sector receiving most of the allocation while health and agriculture

sectors receive relatively smaller allocations. In that regards, some policy recommendations include: (i) The proportion of budget allocation for strategic sectors such as health and agriculture should be increased signifi cantly, (ii) In addition to health and agriculture sectors, sectors related to economic and livelihood (small and medium enterprise development and empowerment of rural communities, labor, maritime aff airs and fi sheries, and trade) should receive more budget allocation as an eff ort to empower and strengthen local economic growth.

Expenditure allocation for activities to achieve gender equality and fairness in South Sulawesi is still

relatively small. The relatively low allocation for gender-responsive activities is due to: (i) poor commitment of policy makers in the province related to the implementation of gender mainstreaming strategy, (ii) no or little planning for gender responsive budgeting by government agencies. To increase the share of expenditure for gender-responsive development programs, the recommendations are: (i) strengthen the commitment of policy makers in each agencies associated with the implementation of gender mainstreaming, (ii) Budget planner at government agencies need to receive training and mentoring on gender mainstreaming strategy related to implementing a more gender-responsive budgets. (iii) A review/study need to be conducted on the appropriate size of gender responsive budget across government agencies.

Chapter 5 Analysis of The Strategic Sectors


5.1 Analysis of the Education Sector

The Provincial Government of South Sulawesi has made the education sector as a development

priority. In the province’s Medium Term Regional Development Plan (RPJMD) for 2008-2013, the education and health sectors are ranked fi rst of the province’s seven development priorities. To ensure that all school-aged children actually attend school since 2008 the Provincial Government of South Sulawesi has implemented a policy of free education in all districts/municipalities. At the same time, they have also developed a variety of other policies such as improving the quality of educational services, promotion of education services, illiteracy eradication and encouraging reading among school children.

5.1.1 Education Sector Expenditure

In real terms, the proportion of education expenditure to total expenditure in South Sulawesi is above

20 percent and increasing year by year. In 2010, the proportion of education expenditure to total regional expenditure reached 31 percent, while in 2005 it was only 21 percent. As total education expenditure is increasing faster than total regional expenditure, the proportion of expenditure on education compared to total regional expenditure is growing larger.

Figure 5.1. Total education expenditure and total regional expenditure in South Sulawesi, 2005-2011

08.0

10.3

14.015

Total Real Education Expenditure Total Real Government Spending % of Education Spending

.3 14.816.7 16.3

21%20%

25% 24%

28%

31% 31%

0%

5%

10%

15%

20%

25%

30%

35%

0

2

4

6

8

10

12

14

16

18 Pro

po

rtion

of E

du

ca

tion

Ex

pe

nd

iture

Tri

llio

n I

DR

Source: Processed based on APBD of districts/municipalities and province in South Sulawesi.Note: 2005-2009 APBD-Realization; 2010* APBD-Revision; 2011** APBD Principal.

Expenditure on education in South Sulawesi has tripled over the period of 2005-2011. In 2005, total real expenditure on education was IDR 1.7 billion, increasing to IDR 5.0 trillion in 2011. Meanwhile, district/municipality education expenditure contributed signifi cantly to the increase in total education expenditure in South Sulawesi. In real terms, districts/municipalities education expenditure increased at an average of 34 percent per year, while provincial education expenditure increased by only 5 percent per year.

The proportion of personnel expenditure is very large, reaching more than 70 percent of total

education expenditure (2006-2010). In 2006 67 percent of education expenditure was allocated to personnel expenditure; this fi gure had increased to 80 percent by 2010. In other words, more than four-fi fths of total education expenditure was earmarked to pay staff . This increase in the proportion of expenditure allocated to personnel has resulted in a decrease in capital spending.



Figure 5.2. Composition of real education expenditure by economic classifi cation in South Sulawesi, 2005-2011

390561

205 476

604 908

717

624 664

9%1,324 1,361

2,669 2,5813,069

4,125 3,775

133

236 215

363

80%

67%

76%70%

74%80%

75%

8%9%

7% 6% 8%11%

12%23%

17%

25%

17% 12% 13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

1,000

2,00

Personnel Goods and Services Capital % or Personnel% of Goods and Services % of Capital

0

3,000

4,000

5,000

6,000P

rop

ort

ion

of

Re

al

Ex

pe

nd

itu

re

Source: Processed based on APBD of districts/municipalities and province in South Sulawesi.Note: 2005-2009 APBD-Realization; 2010* APBD-Revision; 2011** APBD Principal.

The proportion of capital expenditure to total expenditure in the education sector at the district/

municipality level is larger than at the province level. In 2010, the proportion of capital expenditure in districts/municipalities reached 12 percent of total education expenditure, while at the province level it reached only 8 percent. However, the proportion of personnel spending at the provincial level is relatively low, at 64 percent of total education expenditure, while at the district/municipality level it reaches 81 percent. Districts/municipalities allocate approximately one third of expenditure for goods and services, compared to only 7 percent at the province level.

Figure 5.3. Composition of real education expenditure at the district/municipality and provincial level in South Sulawesi, 2005-2011

64%

34%

2%

Province

81%

7%

12%


Personnel ExpenditureGoods and Service ExpenditureCapital Expenditure

Source: Processed based on APBD of districts/municipalities and province in South Sulawesi.Note: 2010 APBD-Revision.


5.1.2 Output and Outcome Performance in the Education Sector

School-student and teacher-students ratios have shown improvement in South Sulawesi. In 2010, every elementary school had an average of 165 students to accommodate every junior high school an average of 252 students and every senior high school 336 students. Student to teacher ratios are also declining. In 2010, each primary school teacher was responsible for 15 students, each junior high teacher for 12 students and each senior high teacher for 12 students. Figure 5.4 shows that the school-student ratio has increased illustrating the increasing number of students in South Sulawesi. The teacher-student ratio also decreased indicating a positive response to add more teachers to those schools.

Figure 5.4. Ratios of school and teacher to students at each education level, 2005-2010

21.7

18.9

21.2

17.8

15.1 15.3

12.9 13 12.5

14.9

11.7 12.1

14 14.4

0

5

10

15

20

25

0

50

100

150

200

250

300

350

400

2005 2006 2007 2008 2009 2010

Student-School Ratio for Elementary School Student-School Ratio for Junior High School Student-School Ratio for High School

Student-Teacher Ratio for Elementary School Student-Teacher Ratio for Junior High School Student-Teacher Ratio for High School

13.4 13.912.1 12

Source: BPS, Social Indicators of South Sulawesi, South Sulawesi In Figures.

The school participation rate in South Sulawesi

is lower than the national rate at all levels of

education. In 2010, the school participation rate for elementary school (6-12 yrs old), junior high school(13-15 yrs old) and senior high school (16-18 yrs old) in South Sulawesi reached 97 percent, 83 percent, and 53 percent respectively, while the national averages were 98 percent, 86 percent, and 53 percent, respectively.

Girls demonstrate relatively higher rate of

school participation compared to boys in all

age groups and levels of education. With the exception of girls aged between 16-18 years (senior high school), on average school participation rates in South Sulawesi improved for boys and girls between 2006-2009.

Figure 5.5. Comparison of school participation rates in South Sulawesi against the national average, 2010*)

98

86

56

97

83

53

6-12Years

13-15 Years

16-18 YearsSouth Sulawesi

Indonesia

Source: BPS, growth of some key Indonesian socio-economic indicators.Note: *) Temporary fi gure.



Table 5.1. School participation rate by sex in South Sulawesi, 2006-2009

Year7-12 yrs (Elementary School/

MI)

13-15 yrs (Junior High School/

MTs)

16-18 yrs (High School/

Vocational School/MA)

Boys Girls Boys Girls Boys Girls

2006 94.53 95.66 77.18 79.69 49.58 52.25

2007 94.79 95.75 77.12 79.74 49.65 53.06

2008 95.31 95.95 77.16 79.89 49.98 53.06

2009 95.93 97.19 79.86 82.04 51.30 51.94

Source: BPS.

During 2006-2010, the average number of years schooling increased consistently but remained

below the national average. In 2006, students studied on average of 7 years. This had increased to 7.8 years by 2010 but this fi gure is still just below the national average of 7.9 years. This means that on average students in South Sulawesi only attend school until the fi rst year of junior high school and then drop out before reaching their second year of junior high school. But the gap between the South Sulawesi and the national average has narrowed over the years. In 2006, the average number of years schooling in South Sulawesi was 0.2 years behind the national average, while four years later it is only 0.1 year behind the national average. If this trend continues, the average number of years schooling for young people in South Sulawesi should soon exceed the national average.

Figure 5.6. Comparison of average number of years schooling in South Sulawesi against the national average, 2006-2010

7.20

7.407.50

7.70

7.90

7.00

7.207.30

7.40

7.80

6.40

6.60

6.80

7.00

7.20

7.40

7.60

7.80

8.00

2006 2007 2008 2009 2010*)

Pe

rce

nt


Source: BPS, growth of some key Indonesian socio-economic indicators.Note: *) Temporary fi gure.

The literacy rate in South Sulawesi continues to lag. In 2010, the literacy rate of people aged 15 years and over in South Sulawesi was only 87.75 percent. This means that out of ten people in South Sulawesi, one of them is illiterate. Although the literacy rate has improved from previous years, it remains far below the national average, which currently sits around 93 percent. The literacy rate in South Sulawesi is slowly increasing, although male literacy is still higher than female literacy. In 2005 the literacy rate among males was 87.30 percent compared to females at 82.2 percent. This situation persisted as of 2010, with female literacy at 85.54 percent, while male literacy had improved to 90.21 percent.


Figure 5.7. Comparison between South Sulawesi and national average literacy rates, 2005-2010

Pe

rce

nt

90.91 91.45 91.87 92.19 92.58 92,91

84.6085.70 86.24 86.53 87.02

87,75

80

82

84

86

88

90

92

94

2005 2006 2007 2008 2009 2010*)

Indonesia

South Sulawesi

Source: BPS, growth of some key Indonesian socio-economic indicatorsNote: *) Temporary fi gure.

Figure 5.8. Male literacy rates are higher than female literacy rates, 2005-2010

87.3088.32

89.41 89.2390.29 90.21

82.2083.30 83.42

84.15 84.19

85.54

78

80

82

84

86

88

90

92

2005 2006 2007 2008 2009 2010*)

Pe

rce

nt

Male

Female


The literacy rate in South Sulawesi is currently the third lowest in Indonesia, after Papua and Nusa

Tenggara Barat (NTB) and the lowest in the region (the island of Sulawesi). This position has not changed over the past six years. In 2010 South Sulawesi’s literacy rate was 87.75 percent, while in North Sulawesi literacy reached 99.30 percent—the highest nationally. This indicates a need to take measure to improve literacy in South Sulawesi.

Figure 5.9. Literacy rates in South Sulawesi versus national fi gures, 2010*)

Pe

rce

nt

87.7592.91

0

20

40

60

80

100

120




On average, household expenditure on

education between diff erent income

groups shows considerable gaps. In 2005, the richest households (quintile 5) could aff ord a budget for education as much as six times higher than the poorest households in the province (quintile 1). Although the ratio improved in 2009, the diff erence in the amount of spending increased. In 2009, the average poorest households spent only IDR 673,538 for education, while the richest households spent IDR 3,025,199.

5.1.3 Analysis of Education Expenditure in Districts/Municipalities in South Sulawesi

On average, districts/municipalities in South Sulawesi allocate nearly one-third of their regional

expenditure to education. In real per capita terms, Pare-pare District topped education expenditure, while the Bone ranked lowest. In 2010, Pare-pare allocated IDR 1,245,430 for education per capita, while Bone in comparison allocated only IDR 287,220.

Figure 5.10. Education expenditure by District/Municipality in South Sulawesi, 2010

1,245

287

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1,0001,2001,400

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Real Education Per Capita Expenditure

Source: Processed based on APBD-Revision 2010 District/Municipality in South Sulawesi

Personnel expenditure dominates the education expenditure in all districts/municipalities in South

Sulawesi. On average the proportion of total expenditure allocated to personnel reached 80 percent. Bone District allocated the smallest proportion of expenditure to personnel (62%), while Sinjai District allocated the largest proportion (89%). For capital expenditure, Makassar City allocated the smallest proportion (7%), compared to Bone with the largest proportion (58%).

Table 5.2. Average Household Spending for Education By Income Group in South Sulawesi, 2005-2009

FY Quint 1 Quint 2 Quint 3 Quint 4 Quint 5

2005 236,450 289,374 423,126 611,534 1,282,641

2006 205,492 297,089 422,185 758,488 1,925,791

2007 240,271 318,568 416,976 638,571 1,476,404

2008 426,744 518,343 676,021 837,362 1,465,555

2009 673,537 861,314 1,026,990 1,353,976 3,025,199

Source: Processed based on Susenas 2009.


Figure 5.11. Education expenditure by economic classifi cation among districts/municipalities in South Sulawesi, 2010

87% 80% 84% 79% 76% 82% 87% 82% 82% 89%79% 85% 78%

62%

83%68%

82% 77%86% 78% 78% 83% 76%

0%10%20%30%40%50%60%70%80%90%

100%

% of Personnel expenditure % of Goods and Services Expenditure % of Capital Expenditure

Source: Processed based on APBD-Revision 2010 District/Municipality in South Sulawesi.

The school-student ratios and teacher-student ratios at each education level vary between districts/

municipalities. For primary schools, Soppeng District has the lowest school-student and teacher-student ratios, while Makassar City has the highest for both ratios. For junior high schools, Selayar District records the lowest school-student and teacher-student ratios, while Palopo City and North Luwu have the highest ratios. And for senior high schools, Maros District has the lowest and Luwu the highest. These fi gures indicate the need for more equal distribution of teachers among schools and between districts/municipalities.



Table 5.3. Student-school ratio and teacher-student ratio at each education level by district/municipality in South Sulawesi, 2010

District/Municipality SSR Primary TSR Primary SSR Junior TSR Junior SSR Senior TSR Senior

Selayar Island 110.66 14.05 133.77 7.91 253.00 12.49

Bulukumba 141.80 12.26 219.49 11.84 459.44 17.30

Bantaeng 196.47 11.01 306.55 12.09 596.50 13.71

Jeneponto 184.67 17.42 200.63 15.09 372.31 16.69

Takalar 151.89 10.87 279.71 10.88 405.50 10.78

Gowa 198.41 16.73 234.25 11.18 368.05 11.93

Sinjai 136.72 11.84 238.02 11.40 351.63 10.46

Maros 168.61 14.45 249.43 11.03 246.40 8.31

Pangkep 137.67 12.89 250.42 10.33 291.29 11.96

Barru 105.54 10.51 221.38 9.60 474.29 13.61

Bone 138.31 14.13 232.59 11.95 503.50 13.33

Soppeng 104.51 8.87 251.29 9.73 355.08 9.49

Wajo 106.27 16.21 276.31 10.66 397.50 11.00

Sidrap 222.71 19.88 286.20 11.23 382.43 10.93

Pinrang 153.08 13.85 339.20 15.89 498.13 15.72

Enrekang 145.02 14.92 251.97 8.25 361.87 11.88

Luwu 204.58 16.69 233.00 11.50 551.37 19.44

Tana Toraja 167.67 15.78 191.22 10.29 320.25 10.48

North Luwu 192.02 15.82 234.90 19.43 418.00 14.67

East Luwu 225.33 21.28 315.11 15.01 379.45 8.73

North Toraja 208.51 17.82 234.00 19.13 404.25 17.33

City of Makassar 263.80 27.65 286.24 13.76 345.86 16.48

City of Pare Pare 188.68 12.57 325.00 10.66 429.63 9.99

City of Palopo 251.85 15.58 379.52 11.84 395.54 9.42

Source: Processed based on South Sulawesi In Figures, BPS.Note: SSR=Student-School Ratio; TSR=Teacher-Student Ratio.

Most of the districts/municipalities show fewer average years of schooling than at the province

level. Of the 24 districts/municipalities in South Sulawesi, 17 have an average years of schooling less than the provincial average.. Urban areas normally achieve greater average years schooling than rural districts. Makassar City tops the list (10.6 years), while Bantaeng District ranks worst (5.9 years).


Figure 5.12. Average number of years schooling by district/municipality in South Sulawesi, 2009

5.907.40

10.60

0

2

4

6

8

10

12Y

ea

rs o

f S

ch

oo

l

Source: BPS, South Sulawesi social indicators, several series.

The municipalities have relatively better literacy rates than the districts. Makassar City in South Sulawesi, the City of Palopo and Pare-Pare record the highest literacy rates in South Sulawesi. In contrast, districts located in the southern region of South Sulawesi (Jeneponto, Bantaeng, Gowa and Takalar) had the lowest literacy rates. This indicates that more attention is needed to address illiteracy in rural districts, especially in the southern region of South Sulawesi.

Figure 5.13. Literacy rates by district/municipality in South Sulawesi, 2009

77.2087.02

97.32

0

20

40

60

80

100

120

Pe

rce

nt

Source: BPS, South Sulawesi social indicators, several series.

In general, male literacy rates are higher than female literacy rates across all age groups in districts/

municipalities. The largest gap between the male and female literacy rates occurred in the 60 years and over age group. In some cases, female literacy rates are better than male literacy rates, especially in the 15-29 years age group. It shows in the past women’s’ access to quality education was somewhat lower than men but among younger generations they both enjoy more equal access.



Table 5.4. Literacy rates by age group in districts/municipalities in South Sulawesi, 2009

District/

Municipality

15-29 30-44 45-60 60 and above

M F M F M F M F

Selayar 98.7% 98.9% 94.8% 92.4% 88.6% 84.6% 73.7% 57.6%

Bulukumba 96.9% 96.6% 95.4% 89.2% 79.8% 77.8% 67.6% 43.7%

Bantaeng 92.4% 95.7% 79.8% 77.6% 78.1% 62.4% 60.1% 37.5%

Jeneponto 90.4% 94.8% 85.6% 79.8% 60.1% 55.0% 52.5% 34.3%

Takalar 96.2% 96.1% 88.9% 89.6% 73.1% 64.4% 58.1% 32.0%

Gowa 97.3% 96.5% 87.0% 83.1% 75.6% 63.4% 52.2% 33.3%

Sinjai 98.9% 98.6% 94.1% 93.4% 80.1% 75.2% 52.3% 37.9%

Maros 97.9% 97.1% 92.3% 81.9% 76.2% 54.9% 60.7% 25.0%

Pangkep 98.2% 98.9% 91.5% 89.2% 83.8% 71.9% 65.7% 51.8%

Barru 98.9% 98.8% 93.5% 94.2% 83.9% 83.9% 77.1% 57.4%

Bone 97.3% 98.3% 94.8% 89.6% 79.3% 73.5% 59.9% 43.4%

Soppeng 97.8% 99.3% 96.8% 96.6% 87.1% 82.1% 59.1% 47.6%

Wajo 96.5% 97.3% 92.0% 89.1% 81.3% 70.8% 64.6% 37.9%

Sidrap 99.1% 99.1% 94.1% 92.7% 79.3% 69.7% 54.6% 29.0%

Pinrang 99.4% 99.7% 96.9% 93.6% 91.8% 82.9% 76.6% 47.1%

Enrekang 99.0% 98.8% 98.1% 95.8% 87.1% 80.6% 71.7% 40.1%

Luwu 96.3% 97.0% 94.1% 94.8% 86.5% 78.6% 67.4% 45.8%

Tana Toraja 97.1% 98.0% 95.1% 89.6% 84.0% 76.9% 69.1% 48.0%

North Luwu 98.4% 99.4% 95.1% 92.2% 85.0% 73.2% 71.8% 47.9%

East Luwu 99.7% 97.4% 98.0% 96.8% 96.0% 80.4% 81.0% 57.8%

City of Makassar 99.8% 99.4% 98.3% 97.5% 95.5% 91.4% 92.5% 73.2%

City of Pare-Pare 100.0% 99.2% 96.9% 97.4% 94.8% 89.2% 88.0% 72.9%

City of Palopo 99.5% 99.3% 98.6% 97.1% 97.4% 92.0% 90.0% 75.9%

South Sulawesi 97.8% 98.1% 93.9% 90.8% 83.9% 76.0% 67.8% 46.2%

Source: Processed based on Susenas data 2009.

At the district/municipality level average household spending on education between income groups

varies widely. In districts with the highest poverty rates, education expenditure lags. In Pangkep District for example, education expenditure in the richest households (quintile 5) is 6 times higher than among the poorest households (quintile 1). In contrast, in Sidrap District, known as the district with the lowest poverty rate in South Sulawesi, education expenditure among the richest households (quintile 5) is only 35 percent greater than the poorest households (quintile 1). In absolute terms, the poorest households in Selayar District allocate the most to education (Rp.1.6 million), while in Maros District they spent the least (Rp.319.000). In other words, the burden of educational expenditure on poor households in Selayar is far more severe than poor households in Maros or other areas.


Table 5.5. Average household spending on education by income group in districts/municipalities of South Sulawesi, 2009

District/Municipality Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Selayar 1,634,910 2,093,789 1,641,826 2,298,767 2,988,902

Bulukumba 446,536 606,100 688,455 805,486 1,027,435

Bantaeng 476,008 494,070 673,027 1,007,042 2,121,994

Jeneponto 535,688 744,131 775,388 898,718 1,965,042

Takalar 436,606 573,299 649,058 1,035,340 2,816,831

Gowa 646,489 747,363 921,116 1,051,495 2,832,511

Sinjai 599,007 627,840 603,317 1,167,385 2,268,316

Maros 319,223 543,503 837,012 1,163,450 2,531,120

Pangkep 321,754 407,500 539,854 803,074 1,929,913

Barru 385,041 447,098 863,926 1,290,667 1,657,805

Bone 879,729 910,411 1,061,109 1,407,377 1,714,873

Soppeng 725,793 868,002 924,739 1,051,906 1,484,024

Wajo 614,030 751,011 837,756 1,416,800 2,324,109

Sidrap 855,456 807,019 1,139,197 1,117,655 1,188,042

Pinrang 743,691 772,508 1,191,576 1,109,996 1,780,194

Enrekang 522,448 787,213 847,590 1,195,532 1,281,045

Luwu 823,672 1,190,543 1,439,757 1,183,724 2,036,514

Tana Toraja 791,143 1,170,626 1,438,519 2,063,555 4,257,060

North Luwu 658,641 756,666 705,603 1,381,503 840,779

East Luwu 879,565 1,014,821 1,058,187 1,100,179 1,621,045

City of Makassar 768,492 736,174 1,340,752 1,490,257 3,700,023

City of Pare-Pare 951,032 1,055,324 1,150,990 1,342,745 1,967,513

City of Palopo 933,997 1,284,849 1,391,291 1,678,232 3,083,121Source: Processed based on Susenas data 2009.

5.1.4 South Sulawesi’s Free Education Policy

South Sulawesi’s free education policy is included in the 2008-2013 development plan which lists

enhancing human resources capacity as the top priority. Free education and free health care was part of the political promise of the current Governor of South Sulawesi during his election campaign. Therefore, free education and free health care as outlined in the province’s 2008-2013 plan is to support the vision of “South Sulawesi becoming one of the 10 leading provinces in the fulfi llment of basic rights”.

The legal basis for the free education policy is a local regulation (Perda). The annual implementation of the policy is based on a governor’s regulation: for 2008-2009 the Governor of South Sulawesi issued Governor’s Regulation No. 11 / 2008 on the Guidelines for Implementation of Free Education in South Sulawesi Province; in 2010 it was based on Governor’s Regulation No. 9 / 2010 on the Guidelines for Free Education in South Sulawesi Province; and in 2011 it was based on Governor’s Regulation No. 6 / 2011 on the Implementation of Perda No. 4 / 2009 on the Implementation of Free Education in South Sulawesi. The issuance of the necessary regulation each year indicates that the provincial government intends to keep this policy responsive to lessons learned through implementation in order to perfect implementation into the future.



Figure 5.14. Flow scheme of free education policy in South Sulawesi

Monev by PDDK Offi ce of D/M

Budget Disbursement

School Committee

School Proposal

D/M Account for Regional Fund

Mngmt

Budget Utilization (by School)

Verifi cation by PDDK D/M Team

D/M Budget (60%)

Provincial Budget (40%)

Control Team at District/Municiplt

MoU between Prov & D/M Govts

Control Team at Province

Juklak (Pergub)

PERDA

Free Education Policy

Source: Based on the governor’s regulation.

The basic principles, objectives, strategies and organizational implementation of the free education

policy are directed at improving human resource in South Sulawesi through a government-society

synergy. The free education policy emphasize that (1) all school-age children must complete primary and secondary education; (2) government is obliged to assert parents should they neglect children’s education; and (3) government is obliged to provide funding to the disadvantages.

Box 5.1. Regulated variables for the calculation of free education assistance in South Sulawesi, 2011

The Provincial Government of South Sulawesi determines diff erent variables to calculate the amount of funding assistance provided for the free education policy, which diff ers between primary and secondary education.

Primary education:a) additional cost of supporting other learning activities of IDR 4,000/student/month; b) incentives for principal IDR 125,000/month, incentives for teachers IDR 2,500/lesson hour (calculated and paid to teachers who actually perform the teaching), incentives for treasurer IDR100,000/month, remedial and enrichment incentives IDR 5,000/lesson hour, incentives for single male teachers IDR 75,000/man/month, and incentives for school guards of IDR250,000/month.

Secondary education: a) additional costs of supporting other learning activities IDR 17,600/student/month; b) incentive for principal IDR 125,000/month, for vice-principal IDR100,000/month, for administrative head IDR 100,000/month, for classroom guardian teacher IDR 100,000/month, counseling teacher incentives IDR 100,000/month, librarians IDR 75,000/month, laboratory attendants IDR 7.000/month, teachers IDR 2,500/lesson hour (calculated and paid to teachers who actually perform the teaching), remedial and enrichment incentives of IDR 5000/lesson hour, incentives for administrative head IDR100,000/month, free education incentives for treasurer IDR 100,000/month, incentives for administrative staff IDR 75,000/month, single male teacher incentives IDR 75,000/man/month, and school guard incentives IDR 250,000/ month.


The free education tries to cover as many benefi ciaries as possible. The scope of the free education program includes “free education” for students whose schools get full funding for education assistance, “subsidizing the cost of education” for students whose schools get no help from the government, either in full or partial education fi nancing, and “scholarships” for students from disadvantaged families with outstanding performance. The target of the free education policy is formal elementary, secondary and tertiary education. With this scope and objectives, the free education policy has great potential to contribute to improvements in school enrollment rates and average number of years schooling in South Sulawesi.

Box 5.2. Regulated fund utilization for free education in South Sulawesi, 2011

In using the educational fund to support free education, South Sulawesi imposes slightly diff erent rules for primary and secondary education.

Primary education: a) to fund all new admissions activities; b) to purchase textbooks outside the BOS funds and reference books to be kept at the school; c) to fi nance learning, remedial, enrichment, sports, arts, scouts, youth red cross activities and more; d) to procure student report cards and photos; e) to fi nance daily tests, school exams and student learning outcomes; f ) to purchase consumable materials; g) to pay utility bills and services; h) to pay for school care fi nancing; i) to pay Incentives for educators and other school personnel; j) to pay for professional development of teachers; k) to provide transportation to/from school for poor students; l) to assist the purchase of notebooks, pens, uniforms, sportswear, shoes and bags for poor students; and m) to fi nance the management of the free education policy.

The funding policy for secondary education is similar to the primary education arrangements, with the addition of funding for Salafi yah Islamic boarding schools and non-Islamic religious boarding schools. In these schools, free education funds can be used to cover the cost of boarding / hostel and relevant equipment. To avoid any ineffi ciency and ineff ectiveness in the use of the funds, the free education policy should prioritize the provision of assistance for poor students including transport; the purchase of textbooks, notebooks, pencils, pens, uniforms, sportswear, shoes, bags and others which are basic learning needs; and the administrative costs of reporting.

District/municipality government response to the free education policy varies. This mainly revolved around the application of rules which require shared contribution between the provincial government (40%) and the district/municipality governments (60%). Early on, some districts refused to fully comply with the contribution rate, but there were also districts/municipalities that were already implementing similar free education policies before the provincial government obliged them to adopt the policy.

The free education policy has provided valuable lessons learnt about synergies between the provincial

and district/municipality governments in co-fi nancing and the organization of basic services. After four years of implementation, a variety of lessons have enabled the organizers to improve implementation. Not only is it relevant to the provision of a good standard of education but also improving the capacity of provincial and district/municipality governments in service innovation. In East Luwu District for example, the government has been implementing a similar program to the provincial government’s free education policy since 2006. When the provincial government’s policy was introduced, the district government responded by creatively diverting the free education district funds to improve the quality of teaching and learning in order to improve national exams results, while funding from the province continues to be used according to the free education policy. After three years of implementation, East Luwu District now achieves the best national exam results in South Sulawesi.



Box 5.3. Free education in East Luwu District

East Luwu District split from what was previously known as Luwu District. With 6,944.88square kilometers and a population of 210,000 people (2010), the East Luwu has 11 sub-districts and 107 villages. Its vision for regional development is “East Luwu District Toward Sustainability” and its mission is “optimizing potential for people’s welfare in a sustainable manner”. East Luwu’s educational development vision is “creating faithful, knowledgeable, healthy, capable, creative, independent and accomplished persons”, with a mission to improve the quality and professionalism of teachers, principals and staff ; promote the expansion and improvement of access to quality education for the whole community; and, improve the provision of education facilities and infrastructure.

Over the past four years the District’s APBD for education exceeded 20 percent of the budget, with 19.24 percent (2006), 25.40 percent (2007), 26.04 percent (2008), 23.22 percent (2009) and 27.83 percent (2010). When the provincial government policy of free education was announced, it gave more room to improve the district’s education performance. Since 2006 schools in East Luwu have received free educational grants from private parties. After the introduction of the provincial government free education program this private funding of education was diverted to improve the quality of teaching and learning in relation to the national exams, while funding from the Province (40 percent) is managed in accordance with the free education policy with the district contributing 60 percent of the funds. East Luwu’s free education policy was set out in a regional regulation (Perda). Enriched with its own experience managing free education since 2006 and strengthened by the provincial free education policy, East Luwu has taken the opportunity to innovate to improve education standards and achieve outstanding results in education.

The district’s innovation in education development also includes collaboration with a wide range of partners to improve the quality of educational services (UNM, Unhas, ITB, ITS, UT, Sharif Hidayatullah State Islamic University, and Soroako ATS); improve the competence of educators (UNM, LPMP, Unhas / Mathematics Teacher, Unicef, and private sector); improve student competence to complete the national exams (UNM, iNsTy); other community initiatives (school bus for each sub-district, higher education scholarships for outstanding students, textbook assistance, operational support, quality management for schools and educators and educational benefi ts to the education unit); and, the management of school-based education funding by the school (the school is directly linked to the local parliament with regard to the budget allocation).

With the application of the provincial free education policy and a variety of district government innovations, East Luwu has achieved good results in the education sector. In the 2007 national examinations, students of East Luwu ranked 22nd out of 23 districts/municipalities in South Sulawesi but in 2008 they rose to 8th. In 2009, East Luwu improved again and was ranked 5th before attaining the top ranking in 2010. In addition, East Luwu was selected by Tempo magazine as one of the top 10 achieving districts; one of seven districts awarded by the Governor for the development of education; received a Medal from the Governor of South Sulawesi for educational awareness and another Medal for being the 10th district to completely eliminate illiteracy; an Indonesian Teachers Union award for attention to teacher welfare; and, Satya Badges from the President for Development in Education.


5.1.5 Conclusions and Recommendations

During 2005-2011, education expenditure in South Sulawesi showed a signifi cant improvement. It should be ensured that these funds are really working to improve the indicators of education, especially the literacy rate and average years schooling.

The proportion of total education expenditure allocated to personnel is very large, while the proportion allocated to capital expenditure is very small. As a result, education expenditure has no signifi cant impact on the achievement of performance results. The proportion of expenditure allocated for staff needs to be limited so that capital expenditure can be elevated to a more signifi cant level. A moratorium on hiring for the next few years or at least a zero growth policy on hiring new employees should be considered to reduce the proportion of expenditure on personnel. In addition, direct expenditure on employees needs to be more streamlined.

Given the free education policy has been implemented since 2008, it is necessary to now conduct a thorough evaluation of its eff ectiveness. The free education policy needs to be closely correlated with output performance targets and performance results. In addition, the free education program is currently only applicable to elementary and junior high, so it is necessary to expand the policy to also cover senior high school.

Increasing education expenditure in South Sulawesi has improved some outputs, especially the teacher-student ratio, but has not yet elevated overall results. Overall results can be seen when comparing school enrollments, average years schooling and literacy rates to annual targets and the national average. Education expenditure should be directed at improving the literacy rate and average years schooling for districts which have performed poorly on these indicators, since low literacy rate contribute directly to a South Sulawesi’s low Human Development Index. Local governments should pay greater attention and allocate an appropriate level of funding to eradicating illiteracy. Illiteracy eradication eff orts have so far been focused on women in the southern part of South Sulawesi, i.e. the districts of Jeneponto, Bantaeng, Takalar and Gowa.

Gender inequality issues continue to hamper the overall performance of education in South Sulawesi. Female school enrollment rates are higher than for males, but male literacy rates are much higher than female literacy rates. Average years schooling for males is less than for females because males are more likely to drop-out to take up paid work. But the quality of education males receive in school is lower even though they go to school. Illiteracy rates among women aged over 29 years are greater than for males, so it is recommended that the government impose a Crash Course specifi cally for that age group. It is also recommended that women who are illiterate be trained in other disciplines as part of their empowerment.

The free education policy has eased access for the already-enrolled school-age children but has not addressed eff ectively aff ordability for those school-age children (that have not been enrolled) with no capacity to pay for education. It is recommended that the free education policy should be followed up with additional interventions to encourage more school-age children to enter school, especially in districts that are geographically constrained (mountainous and coastal regions/islands) and economically or culturally impeded (where school-age children cannot go to school because of work). Provincial and local government cooperation should be realized as an umbrella for these eff orts.

Average household expenditure on education shows considerably large gaps between income groups. The poorest income groups in the districts of Selayar, Bone, Sidrap and Luwu spent relatively more on education than the same income groups in other districts. It is recommended that eff orts be made to reduce the burden of expenditure on education for the poorest income groups, with priority to be given to those in Selayar, Bone, Sidrap, and Luwu, and to ensure more favorable treatment of the poorest income groups under the free education policy.



5.2 Analysis of the Health Sector

The health sector is similarly important and is an investment in the development of a healthy and productive population. The health sector is also a development priority in South Sulawesi and is the fi rst agenda item of seven in the 2008-2013 Regional Medium Term Development Plan (RPJMD). To support this major development priority the Provincial Government of South Sulawesi has implemented a free health program since 2008. The free health program aims to reduce health care payments, which have been a signifi cant burden on the public, especially the disadvantaged.

5.2.1 Health Sector Expenditure

The proportion of total expenditure allocated to health in South Sulawesi continues to increase,

although it does tend to fl uctuate. In 2005 the proportion of health expenditure to total regional expenditure was 8.2 percent. This grew to 10.4 percent in 2010. Despite a decline in the proportional allocation in 2006, the highest health expenditure growth also occurred in 2006 because total expenditure growth was very signifi cant in South Sulawesi in 2006, causing the proportion of health expenditure to decrease. In 2011, the proportion of health expenditure to total expenditure was 10 percent, a decline compared to the previous year.

Figure 5.15. Total health expenditure compared to total regional expenditure of South Sulawesi, 2005-2011

8.010.3

14.015.3 14.8

16.7 16.3

8.2% 8.1%8.7% 9.0%

10.4% 10.4%10.0%

0%

2%

4%

6%

8%

10%

12%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2005 2006 2007 2008 2009 2010* 2011**

Pro

po

rtion

of R

ea

l He

alth

Ex

pe

nd

iture

Bil

lio

n I

DR

Source: Based on APBD of districts/municipalities and province in South Sulawesi.Remarks: 2005-2009 APBD-Realization; 2010* APBD-Revision; 2011** APBD Principal.

Total South Sulawesi health expenditure in 2010, both at the provincial and district/municipality

level, was dominated by personnel expenditure. At the province level, the proportion of personnel expenditure to total expenditure was higher than at the district/municipality level. At the provincial level, the proportion of health expenditure allocated to personnel was 48 percent, while at the district/ municipality level it was 45 percent. Conversely, the proportion of capital expenditure at the district/municipality was higher than at the provincial level, amounting to 27.6 percent and 20 percent respectively.


Figure 5.16. Comparison of composition of health expenditure by expenditure type between province & district/municipality in South Sulawesi, 2010

45%

28%

27%


Personnel Expenditure Goods and Services Expenditure Capital Expenditure

48%

32%

20%

Province

Source: Based on APBD of districts/municipalities and province in South Sulawesi.Remarks: 2005-2009 APBD-Realization; 2010 APBD-Revision; 2011 APBD Principal.

5.2.2 Health Sector Outputs and Outcomes Performance

Health care facilities and medical personnel are increasing in number. In 2005, the number of health facilities per 10,000 people was 2.2, increasing to 2.7 in 2009. However, there were a number of districts/municipalities that actually showed a decline, such as Maros, East Luwu, and Pare-Pare.

Life expectancy is improving from year to year. Life expectancy in South Sulawesi increased from 70.2 years in 2007 to 70.8 in 2010. Nevertheless, these fi gures are still slightly lower than the national average life expectancy of 70.9 years in 2010. Life expectancy depends on the number of births or infant mortality, and mortality in the age group. This indicates that life expectancy is aff ected by current policies (infant mortality, health services for general population) and policies in the past (for people now falling into older age groups). To increase life expectancy we need to demand improved public nutrition improvement programs, better health care for the elderly, disease prevention and eradication programs, as well as services for pregnant and postpartum mothers.

The infant mortality rate (IMR) in South Sulawesi has dropped, following the national trend. In 2005, IMR was 30 per 1,000 live births, which then declined to 26.6 per 1,000 live births. This trend is in accordance with the national trend. The declining IMR indicates an increase in quality of life and public health services. Nevertheless, much more progress in needed to reach the target IMR of 22 per 1,000 live births in 2013.

Figure 5.17. Number of health facilities and medical personnel per 10,000 population in South Sulawesi, 2005-2009

15 15.713.4

14.716.5

0

5

10

15

20

2005 2006 2007 2008 2009

Health Facility per 10,000 Population

Source: BPS, Social Indicators of South Sulawesi, 2009.

Figure 5.18. Comparison of life expectancy in South Sulawesi against national life expectancy, 2007-2010

70.4

70.5

70.7

70.9

70.2

70.4

70.6

70.8

69.8

70.0

70.2

70.4

70.6

70.8

71.0

2007 2008 2009 2010Indonesia South Sulawesi

Source: BPS.



Figure 5.19. Infant mortality rate in South Sulawesi, 2005-2009

28.9

28.2

27.5

26.826.2

30

29.1

28.2

27.4

26.6

24

25

26

27

28

29

30

31

2005 2006 2007 2008 2009

IMR

pe

r 1

,00

0 L

ive

Bir

ths

National South Sulawesi

Source: The Ministry of Women’s Empowerment & Child Protection.

As with IMR, maternal mortality rate (MMR) in South Sulawesi tended to decrease over the period 2006-2009. The number of maternal deaths reported by health services at the district/municipality level in South Sulawesi in 2006 was as many as 133 per 100,000 live births, which then increased to 143 per 100,000 live births in 2007. But in 2008 the number of maternal death decreased to 121 cases per 100,000 live births and continued to decline to 118 people per 100,000 live births in 2009. To improve performance outcomes associated with the IMR and MMR, the local government has implemented a program to improve safety as well as maternal and child health services improvement programs for infants and young children. Both programs have been implemented consistently from 2008 to 2010, and are expected to be continued until 2013. This is reasonable given the province’s IMR and MMR performance is still far from reaching the target ratio.

South Sulawesi still has a lot do to catch up on basic health coverage. Susenas data in 2009 showed that immunization coverage and assisted deliveries by medical personnel in South Sulawesi were lower than the national average. This fi gure fi ts with South Sulawesi’s IMR, which is higher than the national average. Assisted deliveries by medical personnel are still far below the national average, although the MMR in South Sulawesi is lower than the national average. This suggests that the role of non-medical health care providers is vital and could be an important target for improving the health programs.

The malnutrition rate has not improved in South Sulawesi. According to Basic Health Research 2007, the prevalence of malnutrition in South Sulawesi was 5.1 percent, which is lower than national average of 5.4 percent. But in 2010, the same research revealed that the prevalence of malnutrition in the province had increased to 6.4 percent, while nationally it fell to 4.9 percent. The increased prevalence of malnutrition and lack of good nutrition means a decline in the overall quality of health, especially for infants and mothers.

Figure 5.20. Maternal Mortality Rate in South Sulawesi, 2005-2009 per 100.000 Population

133143

121 118

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009

Source: Health Profi le of South Sulawesi 2009.

Table 5.6. Achievement of basic health indicators in Sulawesi in 2009

ProvinceImmunization

Coverage

Births assisted

by Medical PMorbidity

North Sulawesi 79% 76% 36%

Central Sulawesi 73% 46% 38%

South Sulawesi 76% 59% 32%

SE Sulawesi 77% 36% 36%

Gorontalo 75% 37% 48%West Sulawesi 68% 29% 38%

Indonesia 77% 65% 34%



Table 5.7. Average household spending on health by income group in South Sulawesi, 2005-2009

FY Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

2005 77,861 107,104 149,180 208,532 499,397

2006 90,758 116,334 143,190 210,063 333,290

2007 129,661 172,169 211,995 291,100 415,186

2008 105,964 328,486 120,837 179,111 299,047

2009 135,062 188,045 262,035 378,445 821,782


Compared to average household expenditure on education, inequality of household expenditure on

health between income groups is more severe. In 2005, the richest households spent nearly seven times more on health (IDR 499,000) than the poorest households (IDR 77,000). Although the ratio improved in 2009, the gap was still more than six-fold between the richest households (IDR 821,000) and the poorest households (IDR 135,000).

5.2.3 Analysis of Health Expenditure and the District/Municipality Level

On average, district/municipalities in South Sulawesi allocate about one-tenth of total expenditure

to the health sector. Health expenditure per capita is the highest in Enrekang District (IDR 748,000), while the City of Makassar spends the least (IDR 80,000). Similar to per capita education expenditure, generally the districts with the smallest per capita health expenditure have the largest populations. While districts with higher per capita health expenditure also exhibit higher expenditure on education, including Enrekang, Pare-Pare, and Palopo.

Figure 5.21. Real per capita health expenditure by district/municipality in South Sulawesi, 2011748

80100200300400500600700800

Th

ou

san

d I

DR


The proportion of health expenditure by economic classifi cation varies between districts and

municipalities. Enrekang district is an extreme example, where the proportion of health expenditure allocated to personnel is only 14 percent, while the proportion allocated to capital expenditure is 74 percent.



On the other hand, Maros allocates 68 percent for personnel expenditure and only 10 percent for capital expenditure. On average, districts/municipalities in South Sulawesi allocate 47 percent of their total health expenditure to personnel expenditure, with 28 percent and 25 percent respectively for goods and services and capital expenditure.

Figure 5.22. District/municipality health expenditure by economic classifi cation in South Sulawesi, 2010

65%

42% 35%

57% 59%43%

35% 33%47% 48%

68%61%

35%46%

53% 51%43%

63%

14%

44%60%

36% 42%

30%

44%

30%

23% 24%42%

18% 23%

44%

10%

22%21%

28%

46% 27% 25%30%

29%

12%

17%

24%

45% 30%

5%14%

35%20% 18% 14%

47% 43%

9%

43%

10%18%

37%

8%20% 24% 27%

9%

74%

39%

17% 19%28%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% of Personnel Expenditure % of Goods and Service Expenditure % of Capital Expenditure


Health facilities in South Sulawesi are spread evenly across districts, but somehow health workers are

concentrated in urban areas. Districts that are far from the provincial capital, such as Selayar, Enrekang, and Luwu, have more health facilities per population than urban areas. Per capita health expenditure in Enrekang is the highest in the province. And although Selayar as a district has a relatively small budget, its per capita health expenditure is the seventh largest. However, health workers are still concentrated in cities like Makassar, Pare-Pare, and Palopo. This needs special attention from the government because it would render many health facilities in those distant districts incapable of functioning optimally.


Table 5.8. Health facilities per 10,000 people by district/municipality in South Sulawesi, 2005-2009


Health Facilities per 10,000 Population Medical Personnel per 10,000 Population

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

Selayar 5.8 6.4 6.6 8.2 7.1 22.7 20.7 18.4 16.2 21.8

Bulukumba 2.1 2.5 2.5 2.5 2.4 12.5 16.1 10.8 8.5 11.0

Bantaeng 2.7 2.8 2.8 4.3 2.7 7.4 4.9 10.5 10.1 10.6

Jeneponto 2.0 2.4 2.6 2.7 2.7 7.4 6.2 8.3 8.2 9.8

Takalar 1.1 3.0 3.9 3.2 2.9 8.1 13.8 12.0 11.7 9.7

Gowa 1.5 1.5 2.5 2.7 2.8 8.5 11.10 8.1 8.2 8.9

Sinjai 3.0 3.2 3.5 4.3 4.1 11.5 9.4 14.3 13.8 18.2

Maros 1.7 2.1 2.3 2.1 0.5 11.6 15.0 12.7 12.5 10.4

Pangkep 3.3 3.1 3.1 3.6 3.3 14.9 17.2 17.7 8.1 10.3

Barru 3.3 3.0 3.2 3.2 3.4 13.9 15.1 18.5 18.1 17.3

Bone 0.5 2.0 2.0 2.1 2.1 9.0 2.6 3.8 5.1 6.7

Soppeng 3.4 3.4 3.5 3.7 3.5 21.0 19.8 11.0 11.0 11.8

Wajo 1.1 2.4 2.8 2.6 2.6 6.5 9.4 11.0 10.7 12.1

Sidrap 2.2 2.6 2.7 2.8 2.9 12.6 9.7 13.2 12.9 15.4

Pinrang 2.1 2.3 2.4 2.3 2.3 10.6 9.8 12.1 11.7 8.9

Enrekang 3.6 4.5 4.3 4.6 5.1 15.5 14.4 13.7 15.3 15.8

Luwu 3.5 3.4 4.2 4.2 4.4 12.8 12.3 17.6 16.8 16.4

Tana Toraja 2.1 2.5 2.8 2.8 3.6 26.2 12.3 16.1 15.4 12.9

North Luwu 2.3 2.6 3.4 2.9 2.7 8.5 8.4 12.6 14.0 14.3

East Luwu 3.3 3.7 3.8 2.9 3.0 18.2 9.8 13.5 13.1 18.7

City of Makassar 0.5 0.7 0.9 1.1 1.2 24.0 17.4 17.3 28.1 34.0

City of Pare-Pare 2.7 2.7 3.1 3.1 2.3 55.8 44.8 42.3 41.4 53.4

City of Palopo 2.1 2.8 3.2 3.0 3.0 23.0 22.3 35.1 27.5 35.6

South Sulawesi 2.2 2.4 2.6 2.7 2.7 15.0 15.7 13.4 14.7 16.5

Source: BPS, Social Indicators of South Sulawesi 2009.

Some areas exhibited wider household health expenditure gaps. Selayar District shows the sharpest disparities, where the richest households (quintile 5) pay almost 10 times more than the poorest households (quintile 1) for health services. Conversely, Soppeng District exhibits the narrowest gap, with the richest households (quintile 5) paying only 2.5 times more than that of the poorest households (quintile 1).



Table 5.9. Average household spending for health by income group in districts/municipalities of South Sulawesi, 2009

District/Municipality Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Selayar 76,098 90,874 111,926 248,136 725,584

Bulukumba 152,112 199,400 227,487 275,605 433,303

Bantaeng 140,107 176,958 230,406 315,515 807,084

Jeneponto 191,707 214,977 269,762 427,717 639,682

Takalar 165,730 215,541 220,540 308,226 1,211,007

Gowa 151,846 113,340 177,872 261,847 790,962

Sinjai 137,360 184,102 187,159 250,304 620,704

Maros 196,792 161,256 233,804 523,026 1,071,891

Pangkep 87,451 124,343 250,478 201,586 483,683

Barru 157,897 185,438 218,673 438,951 511,918

Bone 92,768 162,449 265,455 427,628 629,321

Soppeng 189,505 152,102 290,997 414,637 464,969

Wajo 163,936 167,786 208,154 273,885 646,352

Sidrap 124,112 230,484 262,937 351,282 904,743

Pinrang 203,772 223,237 358,075 419,570 834,250

Enrekang 108,845 124,336 232,425 292,739 651,948

Luwu 154,398 280,623 263,922 412,087 903,293

Tana Toraja 112,971 242,173 300,281 369,004 489,921

North Luwu 138,789 172,957 192,371 327,009 722,036

East Luwu 134,259 193,999 153,386 300,351 545,046

Makassar 100,298 136,026 261,099 343,627 858,646

Pare-Pare 110,398 223,668 206,721 271,249 654,285

Palopo 158,214 243,949 370,756 424,737 1,041,336Source: Processed based on Susenas data 2009.

5.2.4 The Free Health Policy

The province’s budget allocation for free medical care increases each year. The increased allocation of funds for the free health care policy is necessary because it allows for the provision of health care to the whole population, sick or not, and therefore includes stand-by funds. The health insurance premium payable under this program is IDR 5,000 per capita per month, paid for about 4.8 million inhabitants, costs South Sulawesi Government approximately IDR 175 billion. In 2008, the free health budget was fully borne by the provincial government amounting to IDR 81.7 billion. Since 2009, provincial and district/municipality governments have shared the cost for free medical care in accordance with a memorandum of understanding between the provincial government and each district/municipality government. In 2009, the provincial government paid IDR 93.5 billion, while each district/municipality paid IDR 45.6 billion. In 2010, the provincial government budgeted IDR 103.3 billion, while the district/municipality governments budgeted IDR 63.9 billion. In 2011, the allocation from the provincial government was IDR 174 billion, while the districts/ municipalities contributed IDR 170.7 billion.


Table 5.10. District/municipality budget allocations for free health care policy, 2009-2011

No. District/MunicipalityAllocated Budget for Year

2009 2010 2011

1 Provincial General Hospitals 45,260,516,410 59,498,260,476 61,001,301,171

2 Makassar 5,186,759,500 6,189,696,000 15,474,240,000

3 Gowa 2,176,773,500 2,866,272,000 7,312,344,000

4 Takalar 1,012,103,500 1,203,091,200 2,783,232,000

5 Jeneponto 887,323,500 1,035,878,400 2,641,344,000

6 Bantaeng 576,223,500 722,073,600 2,203,464,000

7 Bulukumba 2,285,242,000 2,637,235,200 6,678,480,000

8 Selayar 547,578,500 691,324,800 1,734,432,000

9 Sinjai 1,186,557,500 1,366,876,800 4,106,688,000

10 Bone 4,331,455,500 4,967,116,800 12,397,176,000

11 Wajo 2,307,571,500 2,610,883,200 6,574,776,000

12 Soppeng 1,479,612,000 1,641,513,600 4,126,440,000

13 Sidrap 1,393,354,000 1,529,779,200 4,544,568,000

14 Enrekang 966,050,500 1,351,843,200 3,465,792,000

15 Tana Toraja 1,789,020,500 1,259,404,800 3,303,072,000

16 Luwu 1,008,202,000 1,382,025,600 3,361,248,000

17 Palopo 480,037,500 626,661,200 1,630,680,000

18 North Luwu 1,429,045,500 1,960,166,400 5,115,408,000

19 East Luwu 1,135,472,500 1,652,342,400 4,076,976,000

20 Maros 1,598,382,500 1,831,785,600 4,579,464,000

21 Pangkep 1,357,543,500 1,541,145,600 4,506,240,000

22 Barru 833,918,000 942,432,000 2,824,200,000

23 Pare-Pare 611,813,000 667,891,200 2,026,920,000

24 Pinrang 1,953,895,000 2,309,260,800 5,773,200,000

Source: Attachment to the Decree of the Governor of South Sulawesi No.2706/VII/2008.

Since it was fi rst implemented in 2008, the free health policy has faced several design and

implementation challenges. Burden-sharing rules for the free health budget, in which districts/municipalities must pay 60 percent of the cost, are considered a fi nancial burden to the districts/municipalities. Some districts have proposed that the provincial government should pay 60 percent, since this policy was initiated by the provincial government. In addition, the free health policy puts much more emphasis on providing health care and treatment of disease, without any preventative components. This policy therefore does not contribute signifi cantly to the performance of the health sector and improved health outcomes. This policy is also meant to be short-term without any investment in longer-term health improvement such as immunization, nutrition, environmental health, and the provision of clean water. On the implementation side, this policy emphasizes the availability of treatment services rather than improving people’s access to health services. In many instances, persons often have diffi culty accessing the free health services because of limited information about where they should go, or because they live in an isolated area. In addition, cross-referenced patients coming from other districts cause fi nancing complications because the fi nancing authority for the patient is in another district.



Box 5.4: Free health policy in South Sulawesi

Implementation of the free health policy in South Sulawesi is based on Regional Regulation No. 2 / 2009 regarding the Health Services Cooperation Implementation Guide. This regulation is supported by the issuance of Governor’s Regulation No. 13 / 2008 on Guidelines for Implementation of Free Health Services in South Sulawesi. These regulations state that the free health policy has two purposes, a general purpose and a special purpose. The general objective is to improve access to quality health services for the entire population of South Sulawesi in order to achieve an optimal level of public health in an effi cient and eff ective manner. While the specifi c objectives are: i) to help ease the burden of fi nancing health care for families; ii) to increase coverage of community health services in health centers (puskesmas) and networks and in state-owned hospitals and local government hospitals within the region of Sulawesi; iii) to increase the quality of public health services in South Sulawesi; iv) to achieve equal health care for all areas in South Sulawesi; and, v) to implement public fi nancing for health services using public health care insurance in South Sulawesi.

The free health policy is implemented on a resource-sharing basis between the province and the districts/municipalities, with the provincial government paying for 40 percent of the program and district/municipality governments funding the remaining 60 percent.

The Implementation Guidelines and Technical Guidelines for the Free Health Services set out the types of services that are free. Free health services to be delivered by Puskesmas are: i) fi rst-level outpatients (RJTP), which are further divided into eight items; ii) hospitalization of First Instance (RITP) divided into six items; iii) emergency services; iv) services to be performed outside the health center; and v) operations and management of Health Centers (Puskesmas). While health care to be delivered in hospitals/treatment centers includes: i) outpatient advanced level (RJTL); ii) inpatient advanced level (RITL); and, iii) emergency services. However there are certain services not covered by the free health policy such as cardiac surgery, cardiac catheterization, cardiac stench ring installation, CT Scan and MRI, dialysis, neurosurgery, plastic surgery, venereal disease and sexually transmitted diseases as well as any medical assistance devices.


Life expectancy in South Sulawesi is still below the national average, while maternal and infant

mortality are higher. To achieve the targeted 73.7 years life expectancy and infant mortality as low as 20 per 1,000 births, it is recommended the government undertake: i) intensive socialization among poor households of the importance of improving nutrition in young children; ii) a special intervention program in malnutrition-prone areas and among communities with the highest number of children under fi ve suff ering from malnutrition; iii) measures to achieve equal coverage for prenatal and postnatal care in rural areas and among farmers, fi shermen and laborers; and, iv) intensifi ed gender socialization, especially among pregnant women and their husbands.

The proportion of regional expenditure allocated to health is only 8 to 10 percent per year, with

personnel expenditure continuing to dominate total health expenditure. In order to achieve better health standards in the future, the proportion of expenditure allocated to health should be increased and to achieve a better balance between capital, personnel and goods and services expenditure. Health expenditure should also support preventative programs rather than just focusing on treatment.

Financing constraints continue to hamper the Free Health program, especially for in-patients with cross-border fi nancing. Therefore, it will be necessary to create a model for cross-border fi nancing, both among provinces and between districts/municipalities. In addition, it will be necessary to establish uniformity across the free health service costs applicable to all districts/municipalities within South Sulawesi.

Health facilities in South Sulawesi are now spread evenly across districts but health workers are more

concentrated in urban areas. Some areas such as Maros, Pare-pare and East Luwu exhibit a declining ratio of health workers to health facilities. To reduce such health inequalities, health workers should be redistributed from urban areas including through the provision of additional incentives for health workers working in remote areas.


5.3 Analysis of the Infrastructure SectorSouth Sulawesi is easily accessible compared to other provinces in Sulawesi and Eastern Indonesia. Sultan Hasanuddin International Airport currently serves nearly all air routes to and from Eastern Indonesia. In addition, it serves international fl ights to Kuala Lumpur and Singapore and serves as a pilgrimage embarkation point. Marine transportation in South Sulawesi is supported by the Soekarno-Hatta Sea Port in Makassar City and another archipelagic sea harbor in Pare-Pare. The sea harbor in Makassar City has been the gateway for the fl ow of goods into and from Eastern Indonesia for generations. Makassar City is connected to many other areas in the island by the Trans Sulawesi Highway.

Basic infrastructure and the quality of roads remain major challenges to South Sulawesi’s regional development. Access to basic infrastructure such as clean water, sanitation and electricity in South Sulawesi is better than in most provinces in Sulawesi but remains below the national average. More than a third of roads are partly or severely damaged, while the proportion of roads in a moderate condition continues to decline. And irrigation coverage of serviced rice fi elds is declining in absolute terms, although the size of rice fi elds is tending to increase.

Infrastructure development in South Sulawesi aims to achieve two development objectives as specifi ed in South Sulawesi’s 2008-2013 Medium Term Regional Development Plan (RPJMD). The objectives are: a) establishing local excellence to stimulate economic growth; and b) providing equal economic opportunities across South Sulawesi. Both are mandated policy agendas for infrastructure development in South Sulawesi, based on the development and maintenance of air, sea and land infrastructure; improvement in the quality of water, electricity, and telecommunications infrastructure; and irrigation facilities and infrastructure for rural areas.

5.3.1 Infrastructure Sector Expenditure

Infrastructure expenditure in South Sulawesi more than doubled over the period 2005-2010. This increase matched the increase in total regional expenditure, which also increased two-fold. In real terms, the province’s infrastructure expenditure increased from IDR 1 trillion in 2005 to IDR 2.1 trillion in 2010. However, despite the proportion of total regional expenditure allocated to infrastructure increased in the years 2005-2009, since the APBD-Revision budget for 2010 and APBD-Plan 2011 the proportion decreases to 15 percent in 2010 and 13 percent in 2011. The Sultan Hasanuddin International Airport development, which was completed in 2008, became the major source of infrastructure spending in South Sulawesi during the corresponding period.

Figure 5.23. Total infrastructure expenditure and total regional expenditure in South Sulawesi, 2005-2011

1.01.7

2.5 2.7 2.7 2.5 2.18.0

10.3

14.015.3 14.8

16.7 16.3

13%

Real Infrastructure Expenditure Real Government Expenditure % of Infrastructure Expenditure

17% 18% 18%18%

15%

13%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2

4

6

8

10

12

14

16

18

Pro

po

rtion

of R

ea

l Ex

pe

nd

iture

to T

ota

l Ex

pe

nd

iture

Tri

llio

n I

DR

Source: Processed based on APBD of districts/municipalities and province in South Sulawesi.Remarks: 2007-2009 APBD-Realization; 2010 APBD-Revision; 2011 APBD Principal.



Capital expenditure dominates infrastructure spending and increased during the period 2005-2010. The proportion of total infrastructure expenditure allocated to capital reached 64 percent in 2005 and increased to 73 percent in 2010. Conversely, the proportion of personnel expenditure to total expenditure remained at only 15 percent between 2005 and 2010. The nature of infrastructure expenditure, with an emphasis on physical construction, is the main reason capital expenditure dominates the composition of infrastructure expenditure.

Figure 5.24. Infrastructure expenditure by economic classifi cation in South Sulawesi, 2005-2011

157 215 239 280 298 291 309211 310 209 225 252 231 2390.7

1.2

2.0 2.2 2.21.9

1.5

64%

Personnel Expenditure Goods and Services Expenditure Capital Expenditure % of Capital Expenditure

70%

82% 82% 80% 79%73%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Tri

llio

n I

DR

Source: Processed based on APBD of districts/municipalities and province in South Sulawesi.Remarks: 2007-2009 APBD-Realization; 2010 APBD-Revision; 2011 APBD Principal.

Total infrastructure expenditure, at both the provincial and district/municipality level, is dominated

by capital expenditure. The proportion of total infrastructure expenditure allocated to capital at the district/municipality level is relatively higher than at the province level. In 2010, districts/municipalities in South Sulawesi spent 82 percent of all capital expenditure on infrastructure, while the provincial government spent only 60 percent. Conversely, the proportion of personnel expenditure at the provincial level (23%) is relatively higher than at the district / municipality level (10%).

Figure 5.25. Infrastructure expenditure in South Sulawesi of 2010 by economic classifi cation

10%

8%

82%


Personnel Expenditure Goods and Service Expenditure Capital Expenditure

23%

17%60%

Province

Source: Processed based on APBD of districts/municipalities and province in South Sulawesi.Remarks: 2010 APBD-Revision.


5.3.2 Infrastructure Sector Outputs and Outcomes Performance

During the period 2005-2010 the use of air transportation for the movement of people and goods increased, with the frequency of fl ights increasing by more than 50 percent. This resulted in an increase in the number of passengers coming to and leaving the province by 66.39 percent and 91.93 percent respectively during this period. The volume of loading and unloading of goods also increased signifi cantly, as did the fl ow of passengers and goods in 2010. This increase coincided with Sultan Hasanuddin Airport entering its second year of operation.

Table 5.11. Increasing frequency of fl ights, number of passengers and goods going through Sultan Hasanuddin Airport

2005 2006 2007 2008 2009 2010

Frequency of Planes (unit) 42,294 44,860 48,504 49,069 48,873 63,880

Frequency of Passengers 3,644,053 4,007,720 4,461,201 4,651,898 4,914,759 6,460,418

Baggage (Tonnes) 31,084 49,227 53,003 38,243 41,738 71,725

Cargo (Tonnes) 31,021 42,082 42,863 32,369 32,099 54,104

Source: BPS, South Sulawesi in Figures.

Marine transport passengers tended to decline in number, while the volume of goods unloading far exceeded the volume of goods loading. During the period 2005-2008, the increase in number of transport vessel passengers boarding and disembarking was 29.45 percent and 10.46 percent respectively. But since 2008, the number of passengers both boarding and disembarking has decreased. In contrast, the volume of goods unloaded, from both domestic and international sources, increased during the period 2005-2010. Meanwhile, the volume of goods loaded, for transport to both domestic and international destinations, declined sharply. This indicates that commodity products (mostly agricultural or fi shery products) are being exported from other ports in South Sulawesi as well through Sultan Hasanuddin Airport, while economic growth is creating demand for the importation of consumer goods.

Figure 5.26. Number of passengers and goods going through the Soekarno-Hatta Harbor, Makassar2.8 2.7

2.3

2.6

2.1

2.5

1.5

Passenger Domestic Load Unload International Load Unload

1.71.5

1.2 1.1 1.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

100

200

300

400

500

600

700

800

900

1000

Millio

n T

on

Th

ou

san

d P

eo

ple


Growth in district/municipality road length was higher in for provincial and state roads. During 2007-2010, the length of district/municipality roads increased 38 percent per year, while the length of provincial roads and state roads remained stagnant with no meaningful increase. This highlights the positive side of decentralization in which districts and cities take more initiative to improve their own road access.



Figure 5.27. Comparison of availability of road facilities in South Sulawesi, 2007 & 2010

1,555 1,209

21,501

1,556 1,260

29,616

0

5,000

10,000

15,000

National Road Provincial Road District/Municipal Road

20,000

25,000

30,000

35,000L

en

gth

of

Ro

ad

(k

m)

2007

2010


However, the quality of existing roads has not been addressed adequately. On average, more than half of the entire length of roads in South Sulawesi is in good condition. However, the proportion of road length in poor condition (mildly damaged and severely damaged) has also increased. In 2005 only 13 percent of roads fell into this category but six years later 34 percent of roads are either mildly damaged or severely damaged. In 2010, the proportion of road length in severely damaged condition reached 21 percent, this can also be interpreted that for every fi ve kilometers of road in South Sulawesi, one kilometer is severely damaged. Although the infrastructure budget increases every year, eff orts to repair and maintain existing roads remain inadequate.

Figure 5.28. Length and condition of road network in South Sulawesi, 2005-2010

37 3624 26

13 13

5 7 20 19

13 13

8 816 11

21 21

50 4840 44

53 53

0

10

20

30

40

50

60

70

80

90

100

2005 20062 007 2008 2009 2010

Pe

rce

nt Good

Severely Damage

Light Damage

Moderate


The people of South Sulawesi have better access to basic infrastructure than most other provinces

in Sulawesi. Coverage of water supply in South Sulawesi (45%) is among the best in Sulawesi. Based on BPS data, the volume of water supplied was 64 million cubic meters in 2009. Access to sanitation (71%) and electricity (90%) are also among the best in Sulawesi, although when compared to the national average South Sulawesi still falls short. Connection to electricity has increased at an average of 4.5% per year since 2005 and in 2009 connected electricity consumed 1.6 billion Volt Ampere (VA). This growth indicates the impact of population growth and economic development in South Sulawesi, which in turn increases the use of electric-powered items.


Figure 5.29. Achievement of basic infrastructure indicators in Sulawesi, 2009

4533

4534

26 26

43

83

6271 66

57 59

79

96

76

9079 78

8593

0

20

40

60

80

100

120P

erc

en

t

Access to Clean Water

Decent Sanitation

North Sulawesi

Central Sulawesi

South Sulawesi

Southeast Sulawesi

West Sulawesi

National

Access to Electricity


17 percent of households in South Sulawesi province are female-headed, but this has tended to

decline in the last 5 years. Meanwhile, female-headed households’ access to sanitation facilities and electricity, although fl uctuating, has shown a tendency to increase. Access to clean water, according to Susenas is strongly infl uenced by the availability of piped water or ground water and its proximity to septic tanks. If the household is located in a densely populated area, it can be expected that any nearby ground water source water does not qualify for human consumption.

Figure 5.30. Women’s access to clean water, sanitation and electricity in South Sulawesi

71.5%

60.9%

36.8%

45.7%52.4%

67.4% 70.3% 70.8% 71.4%78.2%

84.6% 85.3%

94.9%91.0% 90.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010

Clean Water

Sanitation

Electricity

Source: Processed based on Susenas data.

Irrigation networks have an impact on the productivity of rice fi elds. The ratio of irrigation system to paddy fi eld area in 2006 was 46 percent, which rose slightly to 47 percent in 2010. It appears that the trend of productivity of irrigated rice fi elds follows the pattern of the ratio of irrigation networks. This shows the importance of providing irrigation to paddy fi elds to increase rice production. In the future, this data can be used as an input to policy making on rice agriculture or on the improvement of the quality of existing rice fi elds, by increasing the irrigation network, which has proven to improve productivity. In addition, rice fi elds could be extended



Figure 5.31. Irrigated Rice Fields in South Sulawesi, 2006-2010

46.0 46.1 46.1

47.0 46.8

4.65 4.69 4.734.89

5.034.95

4

5

6

40

42

44

46

48

2005 2006 2007 2008 2009 2010

To

n/H

aPe

rce

nt

Ration of Irrigation System (%) Productivity Level of Irrigated Rice Field (Ton/Ha)


The quality of irrigation infrastructure in South Sulawesi is improving. Although the ratio of irrigation to rice fi elds area is declining, the coverage by irrigation channels is increasing. In 2007, 51,000 hectares of rice fi elds were serviced by simple irrigation canals. This decreased to 43,000 hectares in 2010. Meanwhile, land serviced by semi-technical irrigation increased from 60,000 hectares to 73,000 hectares. Overall, irrigated rice fi elds increased by about 6,000 hectares. When compared to the decline of irrigation coverage, this means that there is additional rice fi eld area not yet serviced by the irrigation system.

Figure 5.32. Size of rice fi elds by types of irrigation in South Sulawesi, 2007-2011

153,803 154,423 154,023 156,081

60,299 64,366 74,030 72,820

51,675 49,485 43,347 43,553

020,00040,00060,00080,000

100,000120,000140,000160,000180,000

2007 2008 2009 2010

He

cta

re Technical IrrigationSemi Technical IrrigationSimple Irrigation


5.3.3 District/Municipality Analysis

Infrastructure expenditure per capita in the City of Pare-pare far exceeds that in other areas in South

Sulawesi. Pare-pare per capita infrastructure expenditure was almost double that of Selayar District, which had the second highest expenditure (Selayar spent IDR 607,000). Palopo City boasted per capita health and education expenditure that was among the largest in South Sulawesi; however, per capita infrastructure expenditure remained low. This suggests that the City of Palopo, with its relatively small population, does not require a large allocation for infrastructure. In contrast, in Selayar District per capita infrastructure expenditure is the second highest as a result of its geographic composition of small islands. However, this does not necessarily mean that infrastructure services reach more local residents.


Figure 5.33. Per capita infrastructure expenditure in districts/municipalities in South Sulawesi, 2010

94 131 142 167 173 173 216 222 226 238 247 252 276 323 368 393 393 399484 553 576 607

1,183

0

200

400

600

800

1,000

1,200

1,400T

ho

usa

nd

ID

R

Per Capita Infrastructure Expenditure

Source: Processed based on APBD of districts/municipalities and province in South Sulawesi.Remarks: 2010 APBD-Revision.

Road length and quality vary across districts/municipalities. Some districts with the most roads in South Sulawesi also have the most damaged roads. Bone and Gowa districts have some of the greatest lengths of road in South Sulawesi but about half of the roads in Bone and nearly 60 percent of roads in Gowa are categorized as damaged. North and East Luwu districts also possess substantial roads infrastructure, almost all of which are categorized as in good condition. For recently established districts, road quality is generally poor but these two districts run counter to this trend. Other districts across South Sulawesi mostly have more good roads than damaged roads.

Figure 5.34. Newly formed districts of North Luwu and East Luwu have better road quality

0

500

1,000

1,500

2,000

2,500

3,000

Good Damage


Urban areas have a range of basic infrastructure in better condition. The basic infrastructure quality in urban areas, whose population is more concentrated, is normally better than in rural districts. Instead, in districts where the population is sparser access to basic infrastructure is not as good. For example, Selayar District has the second largest per capita infrastructure expenditure and 78 percent of good-quality roads but it still needs to improve access to safe water coverage, which is currently the second lowest in South Sulawesi (21%), and access to adequate sanitation which is currently 46 percent (third lowest). East Luwu District has done well with approximately 48 percent of residents having access to clean water (fourth highest) and 81 percent having access to sanitation (fi fth highest).



Figure 5.35. Urban areas achieve better basic infrastructure coverage

0%

20%

40%

60%

80%

100%

Electricity Coverage Access to Clean Water Access to Sanitation

Source: Processed basedon Susenas data 2009.


The fl ow of passengers and goods at the new airport has increased while decreasing at sea ports. A similar trend can be found in other parts of Indonesia, which indicates rapid growth in air transport. Such growth will push demand for air transport infrastructure capacity, so the government should continue to work towards this objective. For the air transport sub-sector in South Sulawesi, it is recommended that the local government be more consistent in its commitment to improving the existing infrastructure such as airport passenger terminals, vehicle counters, parking lots and comfort in the airport.

Coverage of basic infrastructure in South Sulawesi is better than the majority of provinces in Sulawesi.

Coverage of basic infrastructure is infl uenced by the distribution of the population and geography of each region. Coverage of infrastructure for people living in the city is better than for those in rural districts. In Selayar District there is a specifi c need for the local government to consistently allocate signifi cant infrastructure expenditure due to the population distribution and geographical conditions.

Access among female-headed households to clean water has tended to deteriorate. Access to clean water is infl uenced by the availability of piped water and proximity of groundwater sources to nearby septic tanks. It is concluded that most female-headed households are beyond the reach of the piped water network, or their houses are too close to neighboring septic tanks that contaminate the groundwater. It is recommended that in addition to increasing awareness of heads of households regarding sanitation and clean water, local governments should also implement programs to eliminate discrimination against female-headed households.

Improved infrastructure expenditure in South Sulawesi has impacted the growth of road length at

the district/municipality level. The length of roads is not directly proportional to quality. Some areas with the greatest lengths of roads also have the most roads in a damaged condition. However, in general more roads in South Sulawesi are in good condition than in a damaged condition. It is recommended that local governments pay attention to the maintenance and quality of roads rather than simply increasing the total length.

Rice production quality has improved in irrigated fi elds. Total land with modest irrigation continues to decline, replaced with technical and semi technical irrigation systems with better levels of water use and effi ciency. However the ratio of irrigation to paddy fi elds decreased, indicating that land is being converted into rice fi elds faster than irrigation systems are being developed. Because there is a positive relationship between productivity and irrigated land coverage, it is recommended that the government focus on increasing the ratio of the irrigation network and land quality rather than extending the farmland.

Chapter 6 Analysis of Prime Commodities


Agriculture still dominates the economic sector in South Sulawesi, as a province well-known as a food

estate and one of national top producer of cocoa and shrimp. The province’s agricultural development policy for 2008-2013 is “improvement of agriculture production and development of rural agribusiness”. This policy is then translated into various goals for each sub agriculture sector. To improve people’s welfare, sustain national food needs, and to improve farmer’s welfare in particular, the government of South Sulawesi is targeting at least 2 million tons of rice production surplus, at least 1.5 million tones of maize produced, 1 million cattle for beef, 340 thousand tons of cocoa, 33 thousand tons of shrimp, and increasing production of horticultural commodities at the minimum rate of 5 percent per year until 2013.

6.1 Agriculture Sector Expenditure

In 2005-2010, Agriculture Sector Expenditure in South Sulawesi has more than doubled. The increase in expenditure is proportional to the increase in total subnational expenditure. Consequently, proportion of agricultural expenditure to total expenditure tends to be constant. In 2005, the share of agriculture expenditure was 2.3 percent and in 2011 was 3.1 percent. This proportion is much smaller compared to other priority sectors such as education, health, and infrastructure.

At the provincial level, agriculture sector expenditure increase in a relatively stable rate, while at

district/municipality level tends to fl uctuate. The agriculture sector expenditure in the province has increased at an average of 23.5 percent per year in 2005-2011. For district/municipality, a relatively steady increase in 2005-2008 was apparent with a signifi cant average growth rate of 40 percent per year. But in 2009, agriculture sector expenditure decreased by 13 percent compared to previous year. A relatively stable increase occured in subsequent years.

Figure 6.1. Agriculture sector expenditure of South Sulawesi

42 43 83 95 100 123 125145

239

361 379 329369 386

2.3%

2.7%

3.2% 3.1%2.9% 2.9%

3.1%

0%

1%

1%

2%

2%

3%

3%

4%

0

100

200

300

400

500

600

Bil

lio

n I

DR

Source: Processed based on districts/municipality and provincial APBD in South Sulawesi, 2005-2011.Note: 2005-2009 APBD-Realization; 2010 APBD-Revision; 2011 Main APBD.

Composition of agriculture expenditures by economic classifi cation is dominated by personnel

expenditure, although the trend is decreasing. In 2005, the proportion of personnel expenditure to total agriculture expenditure was almost 62 percent, and declining to 51.5 percent in 2010. In contrast, during the same period, proportion of capital spending to total agriculture expenditure, although showing an increase, tended to fl uctuate. Capital spending pattern experienced similar trend to goods and services spending, both in terms of nominal and proportion and trends.



Figure 6.2. Agriculture expenditures by economic classifi cation (province and district/municipality) in South Sulawesi, 2005-2011

115132 203 223 218 253 259

35

56 104 121 102 117 129

3795 137 130 109 122 123

0%10%20%30%40%50%60%70%80%90%

100%

2005 2006 2007 2008 2009 2010 2011

Real Capital Spending Real Goods and Service Spending Real Personnel Spending

Source: Processed based on districts/municipality and provincial APBD in South Sulawesi, 2005-2011.Note: 2005-2009 APBD-Realization; 2010 APBD-Revision; 2011 Main APBD.

Figure 6.3. Allocation of agricultural expenditure province and district/municipality by economic classifi cation in South Sulawesi, 2010

53%

18%

29%


Personnel Spending Goods and Service Spending

Capital Spending

48%

41%

12%

Province

Source: Processed based on districts/municipality and provincial APBD in South Sulawesi.Note: 2010 APBD-Revision.

Proportion of personnel spending in agriculture expenditure at district/municipality level is relatively higher than provincial level. At the district/municipality level, share of personnel spending reaches 53 percent, while for the provincial level at 48 percent. However, the proportion of capital spending in district/municipality is much larger (up to 29%) compared to provincial level (12%). It indicates that most mentoring programs and offi cial trip of the facilitators to the districts performed by provincial government. While the district/municipality responsibility is more on the provision of facilities.

Districts that are the center of prime commodities development allocated larger expenditure than other regions. Agriculture expenditure in South Sulawesi varies among districts/municipalities. In 2010, agriculture expenditure was higher in those districts known as prime commodities development center. Agriculture expenditure in the District of Sidrap is the highest (IDR 37 billion) as the center for rice development, also in the District of Pinrang (IDR 22 billion) as the largest shrimp producer, and in Jeneponto (IDR 23 billion) with corn and seaweed productions. In terms of per capita expenditure, the Districts of Selayar, Sidrap, and Enrekang have the largest agriculture spendings.


Figure 6.4. Real agricultural expenditure per district/municipality in South Sulawesi

82 02 42 53 13 94

Real Agriculture Sector Per Capita Spending Real Agriculture Sector Spending

14 74 95 25 65 96 06 36 66 77 47 57 89 51 13 1351 76

1114

8

16

12 12 13

7

19

15

913

16

22 23

15

10

18 18 17

21

37

21

0

40

80

120

160

200

0

10

20

30

40 T

ho

usa

nd

IDR

Bil

lio

n I

DR

Source: Processed based on district/municipality APBD-Revision 2010 in South Sulawesi.

6.2 Output and Outcome Performance of Agriculture Sector

Most of production targets for prime commodities are expected to be achieved in due time. Some commodities will have achieved their production target by 2013, such as rice, maize, and cattle. Seaweed production has even exceeded the target since 2010. Shrimp commodity is much constrained by disease, traditional pond management method, and high number of unproductive shrimp ponds. While cocoa are yet to be harvested due to plantation rejuvenation. Meanwhile, South Sulawesi rice production exceeded local consumption. The production of dry milled unhulled rice in 2010 was 4.4 million tons which later produced 2.7 million tons of rice (60% yield assumption), while consumption of South Sulawesi for rice is estimated to be 800 thousand tons. South Sulawesi is now targeting to produce 2 million tons of surplus rice in 2014.

Table 6.1. Target production for top commodities planned by 2013

Commodities 2008 2009 2010 Target for 2013

Rice (thousand ton dry milled unhulled rice) 4,083 4,324 4,380 4,667

Maize (thousand ton) 1,195 1,394 1,400 1,500

Cattle (thousand cattle) 703 769 849 1,000

Shrimp (ton) 17,333 17,829 22,200 30,300

Cocoa (thousand ton) 110 163 172 300

Seaweed (thousand ton) 747 824 1,518 1,000

Source: Performance Report and Renstra of relevant SKPDs, & BPS South Sulawesi.



Conclusions and Recommendations

The fl agship agriculture development program is fully supported by the districts/municipalities in South Sulawesi. This can be seen from the large allocation of agriculture spendings of districts/municipalities that are prime commodities centers. Agriculture expenditure in South Sulawesi has also increased in 2005-2010, taking share up to 3 percent of total expenditure. When compared with other areas, this allocation is relatively large.

Personnel spending still dominate agriculture sector. It is diffi cult to measure the eff ectiveness of personnel spending of the agriculture sector against the output of the sector. More agriculture expenditure should be directed to developing the processing or production infrastructure (as capital spending) other than the more conventional spending such as mentoring.

6.3 Maize

A production target of at least 1.5 million tons of maize is estimated to be achieved by 2011, or two

years sooner than planned (2013). Maize production in 2009 reached 1.4 million tons from an area of 318,000 hectares, with an average of 4,685 tons of corn harvested per hectare. South Sulawesi is currently the fi fth largest corn producer after East Java, Central Java, North Sumatra and Lampung.. In South Sulawesi, maize has had a rapid growth in 2005-2010.

Area and volume of maize production in South Sulawesi increased signifi cantly. The average expansion of corn fi eld was 12 percent per year, from 206,000 hectares in 2005 to 300,000 hectares in 2009. Production increased from 705,000 tons in 2005 to 1.4 million tons in 2009 (with average increase 19.5 percent per year). Such increase was achieved through expansion of corn fi eld area and improved cultivation method. In addition, it was also due to application of premium seeds and improved farming techniques.

Figure 6.5. Maize production on production centers in South Sulawesi, 2005-2010

138.1 96.0 153.0 152.5 144.4 152.4123.0 164.3 147.4 186.1 194.6 202.4103.6 129.7

175.3 172.6 287.4 245.0

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2005 2006 2007 2008 2009 2010

Other Districts (21.46%)

G O W A (22.10%)

JENEPONTO (11.61%)

BANTAENG (5.76%)

To

n

Source: Agriculture Offi ce for Food Crops and Horticulture in South Sulawesi.

Districts of Gowa, Jeneponto, and Bantaeng are the central area for maize production in South

Sulawesi. Combined, the three districts contribute about 50 percent of the total maize production in South Sulawesi. Productivity level in the three districts reaches 5 tons per hectare, but the average growth of maize production in the three areas varies (5 percent, 11 percent, and 1 percent respectively).


Figure 6.6. Corn Field in the production centers in South Sulawesi, 2005-2010

26,803 19,483 37,932 31,855 25,772 29,61342,316 38,936

47,199 46,406 43,807 47,89022,121 38,638

33,861 39,279 40,391 49,465

130,260 118,774

171,299 213,748 207,801 194,578

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2005 2006 2007 2008 2009 2010

Other Districts

G O W A

JENEPONTO

BANTAENG

He

cta

re

Source: Agriculture Offi ce for Food Crop and Horticulture of South Sulawesi.

Approximately 40 percent of total corn fi eld can be found in three districts: Bantaeng, Jeneponto,

and Gowa. Corn fi elds in those three districts expand in size at an average of 9 percent per year. Gowa has the highest average growth of corn fi eld area, of 21 percent per year, due to abundance of suitable area for the corn plantation.

Productivity level of corn in South Sulawesi also increased in 2005-2010. The productivity level increased at an average of 5 percent per year or 3.8 tons/ha in 2005 to 4.6 tons/ha in 2010, but the productivity declined compared to 2009 harvest. The decrease in productivity was caused by the relatively slow growth of production volume compared to the growth of corn fi eld.

Table 6.2. Maize productivity level in South Sulawesi, 2005-2010

No.Central Production

Areas

Productivity (Ton/Ha)

2005 2006 2007 2008 2009 2010

1. District of Bantaeng 5.15 4.93 4.03 4.79 5.60 5,15

2. District of Jeneponto 2.91 4.22 3.12 4.01 4.44 4,23

3. District of Gowa 4.68 3.36 5.18 4.39 4.64 4,95

4. Other areas 2.62 2.58 2.89 3.20 3.70 4,16

South Sulawesi 3.84 3.77 3.80 4.10 5.22 4.62

Source: Agriculture Offi ce for Food Crop and Horticulture of South Sulawesi.

Maize production in South Sulawesi can be further developed by introducing organic farming to add

value. Development of organic farming for corn is now integrated with the development of cattle livestock. Leftovers from the crop harvest are used to feed the livestock and livestock’s manure is used as organic fertilizer to replace chemical fertilizers. The program will also improve the quality of the environment. The development of the organic maize product should be supported by institutional strengthening of farmers and marketing agencies to promote organic maize to public.




Maize production in 2010 reached 1.4 million tones or 93.3 percent from the target which was set to be at minimum of 1.5 million by 2013. Such success is achieved through intensifi cation and extension activities, complemented by improved cultivation method, supported by suffi cient funding.

In the future, commodities development can be directed toward organic cultivation to increase the quality and reduce production costs, which in turn will increase farmers’ income.

6.4 Cocoa

South Sulawesi is one of cocoa production center in Indonesia, with cocoa plantations located

throughout all districts/municipalities. The development centers for cocoa are Luwu, North Luwu, East Luwu, Pinrang, Bone, Soppeng, Wajo, and the City of Palopo. In 2010, the greater area of Luwu (Luwu, North Luwu and East Luwu) contributed 41 percent of total cocoa production in South Sulawesi province, while the production in Bone, Wajo, and Pinrang contributed 29 percent.

In term of planting fi eld and productivity, the progress of cocoa production in South Sulawesi is not

at its optimum level. Total area of cocoa fi eld in South Sulawesi in 2010 was 266,000 hectares, with nearly 21,000 hectares of damaged or expired plants. In addition, nearly 30,000 hectares of the total area have not produced any harvest. The current average productivity level for cocoa is currently 800 kilograms per hectare.

Cocoa remains the main plantation commodity in South Sulawesi and also plays an important role

for the economy. Cocoa plays crucial role in employment, as source of income for farmers, as source of revenue for the Own Source Revenue (PAD), as well as the source of income from foreign exchange. More than 255.000 farmer households were involved in cocoa farming in 2006, which then increased to about 294,000 households in 2010. Cocoa exports contributed the largest share to South Sulawesi export value, at 204,000 tons with an export value of USD 262 Million.

Figure 6.7. Plantation area, production, and productivity of cocoa in South Sulawesi, 2010

48

29 3013 11 16

38

0

10

20

30

40

50

60

Th

ou

san

d H

ec

tare

Cocoa Field

Not yet Produce Productive

Damage/Expired

34

20 24

12 914

30

708 692 803

974

791 866

667

-

200

400

600

800

1,000

1,200

0

5

10

15

20

25

30

35

40

Th

ou

san

d T

on

Cocoa Production and Productivity

Production (ton) Productivity (Kg/Ha)

Source: Offi ce of Plantation, South Sulawesi Province.


Cocoa’s production and productivity in South Sulawesi is somewhat fl uctuative. Total production of cocoa beans collected in 2006 was up to 157,000 tons, which increased to more than 172,000 tons in 2010. However, the production level in 2006-2010 was fl uctuating. In addition, average productivity level per hectare in South Sulawesi was also fl uctutating throughout that period. The reason for this is the continuous rehabilitation of cocoa plant to replace the damaged or old ones.

Table 6.3. Cocoa production in South Sulawesi from 2006 to 2010

Year Plant Area (ha) Production (ton) Productivity (kg/ha) Farmers (Household)

2006 222,859.82 157,933.92 963.76 255,190

2007 250,854.64 117,118.52 677.44 272,304

2008 257,313.20 110,009.45 626.22 279,239

2009 263,153.05 163,001.47 784.22 288,405

2010 265,985.00 172,083.00 798.57 294,620Source: Offi ce of Plantation, , South Sulawesi Province.

In order to develop and improve cocoa production in South Sulawesi, both central and subnational

governments have planned and implemented various programs. The number of programs launched in 2006 and 2008 was higher than in 2007, 2009 and 2010. However, since 2009, the government has implemented the National Cocoa Program (Gernas Kakao). The program coverage is quite extensive since it includes intensifi cation, rehabilitation and rejuvenation of cocoa plant. In 2009 the Gernas program was implemented in 11 districts and in 2010 and 2011 it was expanded to 12 districts. Before Gernas, government programs for cocoa tend to be inconsistent from one year to another, thus complicated the monitoring and evaluation.

Table 6.4. Cocoa development programs in South Sulawesi, 2006–2010

Year Program

2006

a. Protection of the plants;b. Improvement of quality & marketing of plantation product;c. Development & assistance for plantation; andd. Development of agribusiness.

2007 a. Protection of the plants; andb. Agribusiness Development Program.

2008

a. Improvement of farmers’ welfare;b. Improvement and application of plantation technology;c. Development of agribusiness, andd. Improvement of food security.

2009 a. Recovery of cocoa production & quality;b. Gernas Kakao (intensifi cation, rehabilitation, and rejuvenating of cocoa plants in 11 districts).

2010 a. Recovery of cocoa production & quality;b. Gernas KaKao (intensifi cation, rehabilitation, and rejuvenating of cocoa plants in 12 districts).

2011 a. Recovery of cocoa production & quality;b. Gernas Kakao (intensifi cation, rehabilitation, and rejuvenating of cocoa plants in 12 districts).

Source: Offi ce of Plantation, South Sulawesi Province.

The budget for cocoa development in South Sulawesi mostly came from the national budget (APBN).

The highest budget for cocoa development was in 2009 at IDR 119 billion, of which only 3 percent came from the APBD. Within 5 years of the Gernas program, as well as before and after the program, the majority of the budget comes from APBN. It shows that the central government fully supports the cocoa development



in South Sulawesi. In APBN 2009-2011, a special fund for “Gernas Kakao” was already allocated. The budget allocation for cocoa development, from both subnational budget and state budget is based on local potential (or size of plantation area), the main challenges faced and specifi c needs of the region.

Table 6.5. The budget for cocoa development in South Sulawesi came mostly from APBN

FYBudget Realization (Rp) Plantation Area under Gernas Kakao Program (hectare)

APBD APBN Rejuvenating Rehabilitation Intensifi cation Total

2006 1,043,710,050 101,000,000 n,a n,a n,a n,a

2007 410,363,725 1,705,551,000 n,a n,a n,a n,a

2008 1,204,154,700 4,987,230,000 n,a n,a n,a n,a

2009 3,143,640,406 115,967,538,920 4,300 20,900 23,700 48,900

2010 920,354,050 68,368,456,504 3,550 10,149 3,350 17,049

2011 139,725,000 n,a 6,300 9,100 8,350 23,750Source: Offi ce of Plantation, South Sulawesi Province.Note: Gernas Kakao program was started in 2009, and no data on plantation area for the years before that.


In order to develop and improve cocoa production in South Sulawesi, both central and subnational governments have planned and implemented various programs, such as the national program for cocoa or Gerakan Nasional (Gernas) Kakao which started in 2009. With the implementation of policies and programs, cocoa production and productivity trend is increasing (2009 and 2010), although still below the production and productivity of 2006.

In order to reach the target of 300,000 tons of cocoa production by 2013, rehabilitation, rejuvenation and intensifi cation still need to be done by improving seeds, post harvest maintenance and treatment, the activities that are not included in the Gernas program. On the other hand, institutional strengthening for cocoa farmers is equally important as an eff ort to establish “self reliance” farmers. Another eff ort that has been initiated by the Government of South Sulawesi is the cocoa industry, since this province has an absolute advantage over other provinces in Indonesia.

The budget for cocoa development program mostly comes from the central government. The province cannot rely on central government fi nancial support in the long term. If South Sulawesi wishes to develop their cocoa commodity to reach the absolute superiority, then the government should be more committed to allocate more funds for this program. South Sulawesi almost has no competitors for cocoa products, while maize, cattle, seaweed, and shrimp are also favored by several other provinces.

6.5 Cattle

The South Sulawesi government is targetting for one million cattle population by 2013. This program is necessary to strengthen national food security, especially in the provision of beef. Under the program, by 2013 cattle population in South Sulawesi is expected to reach 1 million. To achieve the target, district/municipality and provincial governments have made several eff orts to improve the intensifi cation quality through the implementation of advanced cattle breeding technology and artifi cial insemination by involving farmers association at subnational level. Some of the eff orts to achieve the targeted cattle population are optimizing cattle birth through artifi cial insemination (AI), intensifi cation of natural mating and the addition of cows and bulls. Other eff orts are controlling the consumption of productive cows, encourage inter-islands cattle trade and lower mortality rates.


The target of one million cattle by 2013 is

likely to be achieved. It is apparent from the population of beef/dairy cattle in South Sulawesi in 2005-2010, showing a consistent increase. In 2005, the number of cattle population was 600 thousand. In 2010 it reached nearly 850 thousand. If the livestock population growth is maintained at 6 percent per year, one million cattle will be reached by the end of 2013.

The growth of cattle population has

been positive in the last 2 years. Since the introduction of one million cattle population target, cattle population has increased with the growth rate of 9 percent and 10 percent in the last two years. Given the trend of the prior three years, which tend to be more stagnant, the new population target is a positive thing to optimize cattle farming.


Cattle population in South Sulawesi has continued to increase since 2005. The one million cattle target is expected to be achieved by 2013 if the current growth rate of 6 percent per year continues..

Any possible interventions should be prioritized to promote artifi cial insemination, improvement of natural mating, reproductive disorders and health issue treatment, secure the productive cows, improvement and development of better cattle feed, quality improvement of human resources and institutional, provision of cow or newborn and control over livestock traffi c.

6.6 Seaweed

South Sulawesi is one of the largest seaweed producer in Indonesia. The types of seaweed mainly produced in this province are of Gracillaria Verrucosa, cultivated in ponds and Echeuma Cottoni, in open sea. The location of the seaweed cultivation ponds spreads throughout the coastal areas of South Sulawesi. Government of South Sulawesi grouped these seaweed cultivation centers into two clusters, cluster one for the cultivation of G. verrocosa in the City of Palopo (incubator), Luwu, North Luwu, East Luwu, Bone, Wajo, Pinrang, Barru, Pangkep, Maros, Takalar, Bulukumba, and Sinjai. And cluster two for the cultivation of E Cottoni, located in Takalar District (incubator), Jeneponto, Bantaeng, Bulukumba, Sinjai, Selayar, Makassar, Pangkep, Barru, Pinrang, Bone, Wajo, Luwu, Palopo, East Luwu and North Luwu.

Total production of seaweed in South Sulawesi increased signifi cantly in 2006-2010. In 2010 seaweed production reached 1.5 million tons, consisting of 1.1 million tons of E. Cottonii and 400.000 tons of G. Verrucosa. A signifi cant increase occurred in 2010, from about 800 thousand tons in 2009 to 1.5 million tons in 2010 (84%). Seaweed production especially for G. Verrucosa, which iscultivated in ponds, tends to decline while the E. Cottoni, which is planted in open sea bed, is always increasing, this indicates the high marine potential of the province.

Figure 6.8. Cattle population for consumption/milk in South Sulawesi, 2005-2009.

594 637 669 703 769 849

7.2

5 5.2

9.3

10.4

0

2

4

6

8

10

12

0

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Pe

rce

ntT

ho

usa

nd

Ca

ttle

Source: BPS, 2010.



Figure 6.9. Production of G. Verrucosa and E. Cottoni seaweeds, 2006-2010

0.62 0.63 0.75

0.82

1.52

0% 2%

19%

10%

84%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

-

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2006 2007 2008 2009 2010

Mil

lio

n T

on

Gracilaria (ton)

E. Cottoni (ton)

Total

Increase

Source: Marine and Fishery Offi ce of South Sulawesi Province.

More than three-quarters of South Sulawesi seaweed production came from fi ve districts. Takalar is the largest seaweed producer in South Sulawesi, with their 2010 production reached 450,000 tons, or 30 percent of total production of the province. Combined, the 5 districts produced 1.2 million tons, or 78 percent of the province’s total production. Other districts also have seaweed cultivation and production area, some major districts are Bulukumba and Bantaeng (5%), and Pangkep (4%).

Figure 6.10. Seaweed production in 5 districts in 2010.

30%

22% 22%

10%8% 8%

0%

5%

10%

15%

20%

25%

30%

35%

0

100

200

300

400

500

Th

ou

san

d T

on


Production and export of seaweed from the fi ve districts increased rapidly in 2010. From 2006 to 2009, the contribution of seaweed production from the fi ve main producer districts compared to the province’s total production has slowly declined despite the increased production, from 63 percent (389,000 tons) to 57 percent (475,000 tons). While production from other coastal districts, such as Bantaeng, Bulukumba, Pangkep, and Palopo City, has continued to increase. Proportion of the production from the fi ve districts increased dramatically in 2010 to 78 percent which is mainly due to the increased production in Luwu, Bone, and Takalar. In 2010 the District Takalar production doubled, as for Bone, the production nearly tripled, and 10 times higher for Luwu than the prior year. South Sulawesi seaweed exports in 2010 increased by 106 percent from the previous year. Data from the Marine and Fisheries Offi ce confi rmed that South Sulawesi seaweed exports in 2009 reached was 20,000 tons with the value of USD 17.6 million, and increased to 41,000 tons, with the value of USD 47 million in 2010.



Although increased, seaweed production in each district still fl uctuated in terms of volume, especially for G. Verrucosa. For this species, the potential for production increase is high. The ponds where the seaweed is cultivated have not been optimally utilized. Seaweed farming in ponds can increase the production as well as improve pond water quality by reducing eutrophication rate. Similarly for seaweed of E. Cottoni species, the demand is also increasing and expanding the cultivation is still possible, especially in waters around small islands in South Sulawesi.

Government intervention and support can be done through the management of cultivation centers to produce better seeds, which currently is one of the major constraints for seaweed farmers. In addition, Government can also improve the institutional skill of the seaweed farmers (producers) and traders to ensure reasonable and stable price for the benefi t of the farmers.

6.7 Shrimp

Shrimp is one of prime commodities in South

Sulawesi. The province’s shrimp export volume in 2008 was 7,000 tons with the value of USD 59,l000. The shrimp industry employs as many as 381,000 people in the cultivation, management and marketing of the product. Although almost all coastal districts/ municipalities in South Sulawesi produce shrimp, 9 of them are known as the main producers. These are districts located along the Gulf of Bone, Flores Sea and Makassar Strait with the most suitable marine waters for shrimp farming. Shrimp farmers in South Sulawesi have been cultivating this commodity since the launch of the national shrimp program or Program Udang Nasional (PUN) in 1982s.

Contribution from the fi ve main producer districts

to total production in 2010 was 60 percent. Major shrimp producing areas in the province are the districts of Pinrang, Bone, Luwu, Wajo, and Pangkep with combined production of 13,000 tons. Total area of shrimp ponds in the fi ve districts is more than 60,000 hectares of total 105,000 hectares of shrimp ponds in South Sulawesi. Yet the combined productivity of those producing districts even with more extensive shrimp pond area is actually relatively lower than other districts with total smaller pond size. The highest

Figure 6.11. Contribution Made by 5 Districts as Producers of Seaweed Tends to Decline Up to 2009, then Increasing Fast in 2010.

83.54 80.63 81.21 33.43

340.9330.53 27.69 40.14

39.39

123.07136.18 132.53 141.22

134.72

149.92

113.25 116.97 135.58214.14

449.2226.03 17.34 45.57 53.28

118.97227.94 255.55 304.84 349.05

335.58

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010

Luwu Bone Jeneponto Takalar Luwu Timur Lainnya


Table 6.6. South Sulawesi shrimp production, ponds size and productivity, 2010

District/

Municipality

Product

(Ton)

Pond Size

(Ha)

Productivity

(ton/ha)

Luwu 2,463 9,894 0.25

Wajo 1,657 12,903 0.13

Bone 3,150 11,633 0.27

Bulukumba 1,300 3,576 0.36

Takalar 1,551 4,541 0.34

Maros 1,365 9,622 0.14

Pangkep 1,610 10,977 0.15

Pinrang 4,530 15,026 0.30

Luwu Timur 1,153 11,620 0.10

Lainnya 3,441 16,068 0.21




productivity is found in Takalar and Bulukumba which have 4,000 and 3,000 hectares respectively, with the average productivity of 0.3 tones of shrimp per hectare per year. Low productivity among those 5 districts is caused by the simple technology that still implemented in most shrimp ponds (found in 37,000 hectares). Ponds supported with intensive or semi-intensive technology can be found only in 7,000 hectares, while the rest have not yet been exploited.

Shrimp fry production is still insuffi cient. Data from the Fisheries Statistics Pocket Book (2010) mentions that demand of fry for traditional farming alone can be up to 1.8 billion fries a year, while production can only provide 723 million fries. There are about 21 nursing-hatchery in South Sulawesi and combined with production of around 111 home-industry hatcheries total production capacity of fry is estimated at 1.4 billion.

Acceleration of shrimp production enhancement in South Sulawesi was started in 2004. Revitalization of aquaculture was made under slogan of “Gerbangmas”, which then continued in 2008-2013 through the Shrimp Farm Resurrection Program. In South Sulawesi RPJMD, increase in shrimp production was implied in the 2nd Agenda, of which the policy is to increase agricultural production, including shrimp.

Shrimp production in South Sulawesi is fl uctuating. In 2010, shrimp production reached 22,000 tons. Giant tiger prawns (Peneaus monodon), white leg shrimp (Litopeneaus vannamei) and other species of marine shrimps are cultivated in the province. The production of giant tiger prawn is relatively much higher than white leg shrimp. The white leg shrimp was introduced in order to survive the fall of shrimp production due to massive disease that once broke out in the province. Giant tiger prawn has larger maximum size and higher selling prices, while the white leg shrimp have higher survival rate and lower need for protein feed which leads to lower feed prices. In 2009, South Sulawesi was the 4th largest producer of shrimp in Indonesia after South Sumatra (42,000 tons), West Java (19,000 tons) and North Sumatra (13,000 tons).

The province’s shrimp production rate is still below the target. The average production rate of shrimp in South Sulawesi is 4.5 percent per year, lower than the target set by the Government of South Sulawesi for -2013, at 13 percent per year. Whiteleg shrimp production grew by 57 percent per year and other shrimp increased by 22 percent, while the giant tiger prawn tends to decline at an average of 3 percent per year. Technology-intensive with a high density population (30 fries/m2) for tiger prawns can no longer be used. Tiger prawns are cultivated only using the simplest level of technology (<5 fries/m2). The declining trend in shrimp production is not in line with the preferences of the producers who choose the prawn as their primary product.

Quality assurance system, such as ‘Good Fish Farming Practice or Cara Budidaya Ikan yang Baik

(CBIB)’ has been applied in shrimp production in South Sulawesi. Quality assurance in the cultivation process is based upon request and demand from customers (market driven). Standards and procedures for the cultivation of aquatic biota both in terms of the CBIB has been implemented by the farmers. CBIB emphasizes on hygiene products through good sanitation management. Quality control of cultured shrimp prevents the products to be contaminated by any contaminants such as bacterial contamination, biotoxin, heavy metals, pesticides and residue displaced (antibiotics, hormones, etc.). CBIB certifi cation is expected to increase producer and consumer confi dence which in turn increases the competitiveness of these products.


Figure 6.12. Shrimp Production per Species, 2006-2010

15,145 12,600 11,264 10,240 12,699

795 1,417 3,217

2,116 3,342

3,475 2,345 3,253 5,473 6,179

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010

Giant Tiger Prawn Whiteleg Shrimp Other Shrimp



The trauma from previous outbreak of shrimp disease has led to the declining production of giant tiger prawn since farmers prefer to cultivate other species. This leads to non-achievement of the production target. Government needs to revise the target, because intensive shrimp farming (placing as many as 30 shrimps per square meter) poses them to higher risk of disease. Another alternative is that the government should be able to fi nd solutions to reduce the risk of such intensive pond practice.

Production of fry is still far below the demand. If this is not addressed, then in the long term, any target of production growth will be diffi cult to achieve.

The majority of shrimp ponds in South Sulawesi have not been fully optimized. In addition, most farmers still rely on simple technology. To increase production, South Sulawesi government should optimize the use of ponds and if no new ponds can be constructed, they should do so by maintaining quality of the environment, since shrimp farming tends to create natural environment degradation.

Chapter 7 Analysis of Specifi c Issues


7.1 Analysis of Poverty

7.1.1 A General Description of Poverty in South Sulawesi

The number and percentage of poor people in South Sulawesi has consistently declined over the

period 2006-2010. In 2010, the number of poor people in South Sulawesi was around 913,000 people, or nearly 12 percent of the population. This fi gure is already much smaller than in 2006, when 1.1 million people or 15 percent of the total population was poor. Today, out of every nine people in South Sulawesi, one of them is poor.

The percentage of poor people in South Sulawesi has been consistently below the national average

between 2006-2010. But the percentage of poor people nationally has decreased faster (5.26% per year) than in South Sulawesi (4.46% per year). As a result, in the years ahead the percentage of poor people in South Sulawesi will be more-or-less similar to the national average fi gure. This fact also shows that on average poverty rates in other provinces are declining faster than in South Sulawesi.

Figure 7.1. Comparison of percentage of poor people in South Sulawesi and Indonesia, 2006-2010

17.7516.58

15.4014.15

13.3314.57 14.11

13.3412.31

11.61

0

2

4

6

8

10

12

14

16

18

20

2006 2007 2008 2009 2010

Indonesia

South Sulawesi

Perc

ent

Source: BPS.

In terms of poverty fi gures, South Sulawesi’s position nationally and regionally has not changed in

the last fi ve years. Nationally, South Sulawesi ranks 17th out of 33 provinces. While on a regional basis, out of the six provinces making up Sulawesi, South Sulawesi ranks second lowest, after North Sulawesi. Gorontalo, which split from North Sulawesi a decade ago, records the highest percentage of poor people on the island of Sulawesi.

Figure 7.2. Comparison of the percentage of poor people among Indonesian provinces, 2010

11.6013.33

0

5

10

15

20

25

30

35

40

DKI

Jaka

rta

Bali

Kals

elBa

bel

Kalte

ngBa

nten

Kalti

mKe

p. R

iau

Jam

b iRi

auKa

lbar

Sulu

tM

alut

Sum

bar

Jaba

rSu

mu t

Suls

elIn

done

sia

Sulb

arJa

timSu

mse

lJa

teng

DIY

Yog

yaSu

ltra

Sulte

n gBe

ngku

luLa

mpu

ngN

AD

NTB

NT T

Gor

onta

loM

aluk

uPa

pua

Bara

tPa

pua

Perc

ent

Source: BPS.



Number of poor people in South Sulawesi is high, but the percentage is low. In absolute terms, South Sulawesi has the largest population of poor people in Sulawesi. However, the percentage is second lowest after North Sulawesi. In 2010, the number of poor in South Sulawesi reached 913,000 people. This fi gure is two times greater than that of Southeast Sulawesi and four times that of North Sulawesi and Gorontalo combined. But the percentage of poor people in South Sulawesi is only 11.6 percent, or only half that the percentage in Gorontalo, which currently has the highest percentage of poor people of Sulawesi’s provinces

Figure 7.3. Comparison between the amount and percentage of poor people in provinces in Sulawesi, 2010

206,700

913,400

141,300

400,700475,000

209,9009.10

11.6013.58

17.05 18.07

23.19

0

5

10

15

20

25

0100,000200,000300,000

NorthSulawesi

South Sulawesi

West Sulawesi

Southeast Sulawesi

Central Sulawesi

Gorontalo

PercentageNumber

400,000500,000600,000700,000800,000900,000

1,000,000 Pe

rce

nt o

f Po

or C

itize

ns

Nu

mb

er

of

Po

or

Cit

ize

ns

Sumber: Diolah berdasarkan data BPS.

There are more poor people living in rural areas

compared to urban areas in South Sulawesi.

In 2010, 87 percent of the South Sulawesi’s poor people lived in rural areas, whereas 13 percent lived in urban areas. These fi gures are lower than those from 2006 when 85 percent lived in rural areas and 15 percent in urban areas. On average the number of poor people in rural areas declines by only 4 percent per year, while in urban areas it declines 7 percent per year. As a result, the distribution of poor people has changed a little. The proportion of poor people living in rural areas tends to increase, while it tends to decrease in urban areas.

The poverty depth index (P1) and poverty

severity index (P2) in South Sulawesi declined

consistently over the period 2006-2010. P1 decreased from 3.43 in 2006 to 1.91 in 2010, which indicates that the poor tend to be getting closer to the poverty line. While P2 decreased from 1.00 to 0.49 over the same period, indicating the spending gap among the poor is narrowing.

Figure 7.4. Distribution of poor people by area in South Sulawesi, 2010

13.05%

86.95%

Urban

Rural

Source: BPS.


Inequality of income distribution in South

Sulawesi is likely to increase in three years. A similar trend can be observed at the national level. While the economy is growing and unemployment rates are tending to decline both have a positive eff ect on reducing the number and percentage of poor people. But the inequality of income distribution, indicated by the Gini coeffi cient below, tends to increase indicating that economic growth has been far more benefi cial for the rich (the highest income groups) than the poor (the lowest income group). As a result, the income distribution among social groups tends to be wider.

The percentage of female-headed households

by income group was relatively stable over the

period 2005-2009. In 2005, of all households that sit within the lowest income group (quintile 1) only 3.1 percent are headed by women, while among the highest income group the fi gure is 4.3 percent. This fi gure increased in 2009, for both the lowest and highest income groups. In fact, among all income groups the number of female-headed households increased. This suggests that the relative number of female-headed families continues to increase in South Sulawesi in all income groups. There were no signifi cant diff erences in the proportion of female-headed household between poor and rich income groups.

Figure 7.6. Gini coeffi cient index in South Sulawesi and nationally, 2007-2010

0.360.35

0.370.38

0.370.36

0.390.40

0.320.330.340.350.360.370.380.390.400.41

2007 2008 2009 2010

Indonesia

South Sulawesi

Source: BPS.

Table 7.1. Percentage of female-headed households by income group in South Sulawesi, 2005 -2009

Year Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 Average

2005 3.1% 3.4% 4.1% 3.6% 4.3% 3.6%

2006 3.4% 3.8% 3.8% 3.9% 4.4% 3.8%

2007 3.8% 4.1% 4.1% 4.5% 5.6% 4.3%

2008 3.3% 3.9% 3.1% 3.2% 4.1% 3.5%

2009 4.5% 4.0% 3.9% 4.3% 4.8% 4.3%

Source: Calculated based on Susenas data.

Figure 7.5. Poverty depth index (P1) and poverty severity index (P2) in South Sulawesi, 2006-2010

3.43

2.60 2.442.08 1.91

1.000.68 0.67 0.55 0.49

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2006 2007 2008 2009 2010

P1 P2

Source: BPS.



7.1.2 Description of Poverty at the District/Municipality Level

In general, the number of poor people in districts/municipalities in South Sulawesi decreased during

the period 2005-2010. The declining trend in the number of poor varies between districts/ municipalities. Of South Sulawesi’s 24 districts/municipalities, the number of poor increased in three districts: Soppeng, North Luwu and Makassar. In 10 districts the percentage of poor people was above the provincial average. Pangkep, Jeneponto and North Toraja districts had the highest percentage of poor people.

Figure 7.7. Percentage of poor people by district/municipality in South Sulawesi, 2009

5.86

19.26

0

5

10

15

20

25

Mak

asar

Pare

Par

e

Sidr

ap

Waj

o

Pinr

ang

Luw

u Ti

mur

Bulu

kum

ba

Gow

a

Bant

aeng

Sopp

eng

Sinj

ai

Barr

u

Taka

lar

Palo

po

Bone

Mar

os

Tana

Tor

aja

Sela

yar

Luw

u

Luw

u U

tara

Enre

kang

Tora

ja U

tara

Jene

pont

o

Pang

kep

Perc

ent

Source: BPS.

However, the percentage of poor people increased in nearly half of the districts/municipalities in

South Sulawesi. During the period 2005-2008, the percentage of poor increased the most in Soppeng District. In addition, the percentage of poor people increased in North Luwu, Barru, Pinrang, Luwu, Wajo, Bone, Bantaeng, Bulukumba, Palopo and Pare-Pare. In contrast, Selayar and Gowa districts achieved the greatest decrease in the percentage of poor people.

The percentage of female-headed households by income group varies between districts/

municipalities. The proportion of female-headed households in the poorest income group is the largest in Wajo (7.4%) and Makassar (6.6%) and, conversely, the proportion in the highest income groups is graetest in Pangkep (8.5%), Takalar (7.7%) and Pinrang (6.6%). Districts/municipalities with larger proportion of high income indicates better access to sources of income or economic activity for women.

Figure 7.8. Percentage of female-headed households by income group in South Sulawesi

7.4%8.5%

0%

2%

4%

6%

8%

10%

20% of Lowest Income 20% of Highest Income

Source: Calculated based on Susenas data 2009.Remarks: Not Including North Toraja


Table 7.2. Percentage of poor people by district/municipality in South Sulawesi, 2005-2009

No. District/Municipality 2005 2006 2007 2008 2009

1 Selayar 22.71 20.82 20.45 18.49 15.00

2 Bulukumba 12.08 13.84 13.56 12.26 9.20

3 Bantaeng 10.41 12.34 12.12 10.94 10.25

4 Jeneponto 23.18 25.06 24.55 22.48 19.10

5 Takalar 14.94 14.09 13.80 12.68 11.16

6 Gowa 16.90 14.55 14.13 12.79 9.49

7 Sinjai 14.15 15.76 13.87 12.73 10.68

8 Maros 20.13 20.09 20.08 18.55 14.62

9 Islands of Pangkajene 22.79 23.82 23.93 21.36 19.26

10 Barru 11.69 13.91 14.73 13.49 10.69

11 Bone 16.38 18.78 18.84 17.35 14.08

12 Soppeng 4.65 5.60 5.45 11.22 10.42

13 Wajo 9.95 11.57 11.36 10.16 8.96

14 Sidenreng Rappang 8.38 8.19 8.05 7.64 7.00

15 Pinrang 9.07 10.70 10.44 9.65 9.01

16 Enrekang 21.59 23.18 22.79 20.51 16.86

17 Luwu 18.51 20.13 21.24 19.44 15.44

18 Tana Toraja 18.87 20.44 19.91 18.57 14.62

19 North Luwu 14.63 14.48 14.03 18.38 16.25

20 East Luwu 13.05 11.35 10.21 10.98 9.18

21 North Toraja na na na na 19.08

22 City of Makassar 6.19 7.22 5.66 5.36 5.86

23 City of Pare Pare 6.70 7.86 7.65 7.10 6.53

24 City of Palopo 11.36 12.92 12.71 12.83 11.28

South Sulawesi 13.71 14.57 14.11 13.41 11.61

Source: BPS.

7.1.3 Poverty Alleviation Policies in South Sulawesi

The issue of poverty reduction is not a specifi c development priority in South Sulawesi. This is because the percentage of poor people in South Sulawesi is below the national average. However, the agenda for development, as described in the RPJMD, is closely related to poverty reduction. Fulfi llment of the people’s basic rights and an increase in the Human Development Index (IPM) are two relevant themes that drive development policy in South Sulawesi are believed to have contributed greatly to poverty reduction.

Poverty alleviation in South Sulawesi still depends on programs implemented by the national

government, especially through the National Program for Community Empowerment (PNPM).

Poverty reduction programs that are later tailored to local conditions by local governments remain very limited. Poverty reduction programs implemented by local governments generally aim to achieve two main objectives: reducing or minimizing the expenses incurred by the poor (in the form of fee waiver for



example, free education and healthcare, subsidies); or, increasing the productivity and incomes of the poor (in the form of developing rural infrastructure and the provision of venture capital). Some donors also provide indirect support through activities that are believed to correlate with poverty reduction. For example, a program in Jeneponto District oriented towards capacity building, community empowerment and improvement of public services.


The amount & percentage of poor people in South Sulawesi declined consistently over the

period 2006-2010. However, the number of poor in South Sulawesi is still the highest in Sulawesi and the percentage or poor is higher than the national average. Local governments (provincial and district/municipality) are expected to intensify eff orts to implement programs and allocate more resources to alleviate poverty in South Sulawesi. Along with these eff orts, local governments need to develop poverty reduction road-map areas for the short, medium and long-term. A Regional Response Coordination Team for Poverty (TKPKD) also needs to be established and strengthened in all districts/municipalities.

The percentage of poor continued to decrease in line with the increasing pace of economic

growth and declining unemployment rate. But the disparity of income distribution, indicated by the Gini Coeffi cient Index, is increasing. This indicates that while economic growth benefi ts the poor (the lowest income group), the rich (the highest income group) benefi t much more. Inclusive economic development, development of the upstream sector and a more pro-poor budgeting system, as well as eff orts to fulfi ll people’s basic rights should be actively encouraged to achieve much more signifi cant development results.

As with any amount and percentage of poor people, the Poverty Depth Index (P1) and Poverty

Severity Index (P2) in South Sulawesi also decline consistently over the period 2006-2010. This indicates that at on average poor people tended to shift closer to the poverty line and their gap in terms of spending narrowed (improved).

Pangkep, Jeneponto and North Toraja districts have the highest percentage of poor in South

Sulawesi. Policy and poverty reduction programs should be focused and intensifi ed in these three districts by encouraging the involvement of development partners, such as private companies, state enterprises, NGOs, donor agencies, etc.

The Provincial Government of South Sulawesi must design a regional development program

that provides opportunities for all citizens, especially the poor, to get a job and earn a decent

income. Such policies are far more reliable than populist policies and short-term charitable programs. Local governments need to facilitate the involvement of various parties in an eff ort to improve people’s lives, especially the poor.

7.2. Analysis of Environmental Conditions

South Sulawesi’s 2008-2013 environmental management policies aim to improve and protect

the environment. Environmental concerns are a fundamental problem for human beings and other living creatures. Quality of life can be very dependent on the quality of the environment. South Sulawesi recognizes the importance of maintaining the environment and pursues policies that support environmental sustainability.


Population growth is a major factor in the increasing pressure on the natural environment. Population growth of 1.3 percent per year in South Sulawesi has resulted in increased productive activities while simultaneously increasing the potential for environmental degradation. Agriculture is an important sector in South Sulawesi but also threatens the environment through agricultural materials and residues fl owing into aquatic ecosystems. Expanding settlements also increase demand for the conversion of green land, as well as producing a signifi cant amount of waste.

Prevention and mitigation of natural disasters requires coordination between districts/municipalities.

Learning from experience in many other regions, natural resources and the environment often extend beyond administrative boundaries. Many parts of South Sulawesi are prone to landslides and fl ooding making good and coordinated management of natural resources across districts a priority. For example, fl ooding in the watershed of Bila-Cenrana will inundate Wajo, Sidrap and Bone. And landslides in protected forest areas of Sinjai and Gowa districts can cause signifi cant damage to settlements and agricultural areas in these two districts.

7.2.1 Expenditure on the Environment

Expenditure on environmental management in South Sulawesi has more than doubled. Yet the majority of expenditure is allocated to personnel. Expenditure related to environmental management is allocated directly to environmental management but also to other offi ces’ budgets, including forestry, maritime and agriculture. This analysis extracted data from the Environment Offi ce only.

The provincial government already has some environmental control programs in place. The Pollution Control and Natural Environmental Destruction Program is one of eight programs run by the Regional Environment Agency (BLHD) of South Sulawesi, which is responsible for controlling damage to the environment and natural disasters. In 2010, South Sulawesi’s BLHD allocated IDR 1.64 billion out of its total budget of IDR 8.84 billion, or 18.5 percent, to this program. Activities implemented under this program are: i) coordination for the city health assessment/Adipura Award; ii) management of B3 waste; iii) coordination for preparing environmental impact analyses; iv) operation of a laboratory for environmental management; and, v) management of the laboratory facilities.

Most of the activities under the provincial BLHD are not related to environmental damage control or

natural disaster risk reduction. In 2010, of 28 activities structured under eight programs only a few had direct relevance to environmental hazard or damage control or natural disaster management. Some activities that were relevant to controlling environmental degradation and natural disasters included: management of B3 waste; coordinating environmental impact assessments; management of the environmental laboratory; development of fi sheries conservation and stabilization of the region; preparation of environmental management plans; preparation of the regional environmental status; and, the going green and nature conservation movement. Total cost for these activities was IDR2.5 billion, or 28.3 percent of the budget (DPA-South Sulawesi Province BLHD, 2010). Most of the allocated budget for controlling environmental degradation and natural disasters or environmental management is provided by the central government (APBN) through related programs, such as the Forestry and Land Rehabilitation Movement (Ministry of Forestry), Managing Marine Protected Areas (Ministry of Maritime & Fisheries) and Implementation of the EIA under the Ministry of Environment (KLH).



Figure 7.9. Expenditure on environmental issues in South Sulawesi, 2007-2009

21 2543

64 5565 71

55

30

35%

45%

56%

36%

19%

0%

10%

20%

30%

40%

50%

60%

0

20

40

60

80

100

120

140

160

180

2005 2006 2007 2008 2009 2010* 2011**

Bil

lio

n I

DR

Personnel Goods and Services Capital % of Personnel % of Goods and Services % of Capital

3345

43

4249

6

17

29

4634

26

9%

57

Source: Based on APBD of districts/municipalities and province in South Sulawesi.Remarks: 2005-2009 APBD-Realization; 2010* APBD-Revision; 2011** APBD Principal.

7.2.2 Description of Environmental Conditions in South Sulawesi

The impact of expenditure for rehabilitating the natural environment can be measured over several

years. Analysis of the performance of the province’s expenditure on environmental management should be able to explain the change in the rate of destruction of the environment and natural disasters. However, such parameters of change generally take place over a long period of time in relation to fragile environments such as coral reefs, so they are relatively diffi cult to monitor in a short time.

The rate of rehabilitation of damaged forests and other critical areas is still relatively slow compared

to the rate of destruction. In the Regional Environment Status (2009) report, the Provincial Government of South Sulawesi estimated that the area described as critical in South Sulawesi had reached 683,000 hectares, or about 15 percent of the total area of South Sulawesi. This critical land includes 370,000 hectares of forest and 313,000 hectares of other land. Of this critical land area, the Government of South Sulawesi has undertaken rehabilitation (reforestation) in only 53,000 hectares, or 7 percent. If this data is associated with total state forest area in South Sulawesi, which covers 2.1 million hectares then it can be estimated that approximately 20.5 percent of existing state forests have been damaged.

A signifi cant decline in mangrove area has occurred. The Forest Service Offi ce and BLHD data confi rm that in the 1980s South Sulawesi had 113,000 hectares of mangroves and that this fi gure had declined to 23,000 hectares in 2011, consisting of 1,410 hectares of primary and 22,000 hectares of secondary mangrove forests. Total mangrove forest in Indonesia covers an estimated area of 3.7-4.2 million hectares and 75 percent of this can be found in Papua. In Sulawesi mangrove area is estimated to cover an area of 133,000 hectares, or 2 percent of the total area of mangrove in Indonesia. This decrease is caused primarily by excessive and uncontrolled conversion for residential areas and aquaculture ponds. The government has made some eff ort to curb such destruction of mangroves through Gerhan, or Program and Movement for Forest Rehabilitation, and claimed that the program has managed to rehabilitate 5,920 hectares so far, reducing deforestation by 10 percent. In addition, the districts of Wajo and Sinjai have their own community-based mangrove rehabilitation programs that have rehabilitated a total area of 500 hectares.


Fertile reefs are currently under heavy pressure due to fi shing practices which are not environmentally

friendly. The marine waters of South Sulawesi are home to a total area of coral reefs equaling 5,970 square kilometers, most of which are now in a critical or damaged condition. It is estimated that one square kilometer of coral reef can produce 15-20 metric tons of fi sh stocks per year. However, according to some estimates Indonesia’s losses from blast fi shing amounted to USD 370 billion or USD 90,000/km2 (Pet-Soede, 1999).

Figure 7.10. Most coral reefs in South Sulawesi and Indonesia are damaged

2

22

40

36

6

26

32

Inner Circle: South Sulawesi

Outer Circle: Indonesia

Excellent

Good

Damage

Critical

Source: Center for Research on Coral Reef, Hasanuddin University (2006).

Some districts already have programs to improve their coral reefs. For example, under the COREMAP II program, the districts of Selayar and Pangkep have managed to contain the damage and improve the living coral cover at over 5 percent per year. In addition, the program takes direct action to interrupt those fi shermen still using fi sh bombs, which are destructive to the coral reefs, as well as providing incentives to those in the two districts to switch their fi shing practices from using destructive methods to relying on more environmentally friendly practices.

Some parts of South Sulawesi are quite vulnerable to fl oods and landslides. Approximately 78 percent of South Sulawesi has mountainous to hilly topography with a slope inclination of more than 40 degrees. Combined with high rainfall during the wet season (the average monthly rainfall is 200 millimeters) this topography presents a signifi cant risk to communities. Although most landslides and fl oods occur at the local level, sometimes the cause and impact involve diff erent administrative regions. The long-term consequences of such natural disasters to the headwaters of rivers and streams, and eventually to coastal cities, have not yet been fully mapped. The consequences could include sedimentation of rivers and dams, which would eventually demand substantial funding for maintenance and disaster management at the local government budget.


Most of the activities in the provincial BLHD do not relate to the environment and natural disasters. In 2010, of the BLHD’s 28 activities only some of them were related to controlling environmental degradation and natural disasters. This pattern is repeated with regard to funding allocations. While expenditure for environmental issues increased two-fold in the period 2005-2010, the allocation for personnel expenditure increased three-fold.

The government should provide incentives to people and companies for successfully implementing

green concepts into their activities. Environmental damage is mostly caused by human error in the utilization of natural resources. Any prevention programs should also consider the socio-cultural aspects



of preventing further environmental damage. Building better understanding, increasing sensitivity and awareness, and developing an environmentally-conscious culture are important steps in managing the environment. Incentives might be off ered to those who have successfully implemented green activities, not only in the form of recognition awards but also material rewards, such as tax breaks.

The government should introduce environmental taxes. Pollution is largely caused by either households or industrial activity. The introduction of additional environmental taxes could support eff ectors to internalize environmental impact into an economic mechanism to support administrative mechanisms such as environmental impact analyses, the Environmental Management Eff ort (UKL) and Environmental Monitoring Eff ort (UPL).

The provincial and district/municipality governments should develop and implement natural disaster

hazard mitigation plans. Although natural disasters are not usually caused by human error, the impact can be minimized through mitigation measures including mapping of disaster-prone areas, avoiding a combination of natural factors that may increase the risk to people and property, and establishing evacuation routes to safer locations in disaster prone areas. Disaster mitigation planning has become imperative and it should be translated into operational plans for mitigation as part of local spatial planning.

Disaster budgeting should better coordinated between the province and districts/municipalities.

This is because in South Sulawesi, natural resource and natural disaster management often requires coordination between two or more districts/municipalities and the province. In the downstream or coastal areas, the impact of natural disasters on the people can be severe making it critical for these hazards to be managed or prevented in a coordinated way between upstream and downstream administrations.

7.3. Analysis of Gender Issues

7.3.1 General Description of Gender Issues in South Sulawesi,

Although South Sulawesi’s Human Development

Index (HDI) has improved, disparities between

genders persist. This is demonstrated by the Gender Development Index (GDI), which is still below average HDI. In 2009 GDI reached 62.07, which was higher than the previous year, while HDI reached 70.82. Although the GDI is below the average HDI, since 2005 the year-by-year growth has been quite signifi cant and led to a 4.67 point improvement. GDI indicators show us that this improvement was largely a result of higher male incomes, which contributes for about 70.16 percent of the Income Distribution Index while female incomes account for only about 29.84 percent.2 The impact of low incomes and high illiteracy rates among many women in South Sulawesi cause the low point of the GDI. To encourage a higher GDI it will be necessary for the government to improve gender equality and fairness.

2 Gender Development Index is contributed by Income Distribu on Index, Life Expectancy A ainment, and Literacy A ainment. All contributors have maximum and minimum value, the closer the indicators to the maximum value for both sexes, the higher GDI will be.

Figure 7.11. Growth of IPM & GDI South Sulawesi, 2005-2010

68.06 68.81 69.62 70.22 70.82

57.4 59 60.4 61.04 62.07

0

10

20

30

40

50

60

70

80

2005 2006 2007 2008 2009

HDI GDISource: Gender Based Development of the Ministry of PP & PA; BPS.


Meanwhile, South Sulawesi’s Gender

Empowerment Measure (GEM) improved during

the period 2005-2009 but was still below the

national average. In 2005, the GEM had improved from 50 points in 2005 to 53.82 points in 2009 or up by 3.82 points, but this was still lower than the national average of 63.52. The biggest contributor to the low GEM in South Sulawesi was the low level of involvement of women in parliament, which reached only 4.4 percent in 2009 and was the lowest of all provinces in Indonesia. Given South Sulawesi’s GDI and GEM still fall below the national average, South Sulawesi’s provincial and district/municipality governments need to focus more attention on creating programs to empower women.

Improvement of the GEM and GDI at the provincial

level was a refl ection of improvements in these

indexes in 23 districts across South Sulawesi. Gowa achieved the greatest improvement of GDI in the past two years (2008-2009), increasing from 61.52 to 81.65. Other districts/municipalities also achieved increases in the range of 0-2. Pinrang District achieved the greatest improvement in GEM, increasing from 47.05 in 2008 to 48.36 in 2009. The GEM in other districts/municipalities only increased within a range of 0-1 points during 2008-2009.

Figure 7.13 Gender development index (GDI) in 23 districts/municipalities across South Sulawesi

-1020 30 40 50 60 70 80 90

2008 2009

Source: The Ministry Of Women’s Empowerment and Child Protection, 2010.

Figure 7.12. Growth of GDI South Sulawesi and nationally, 2005 – 2009

61.3 61.8 62.1 62.27 63.52

50 51.8 52.6 52.9 53.82

0

10

20

30

40

50

60

70

2005 2006 2007 2008 2009

National GEM South Sulawesi GEM

Source: Gender Based Development by the Ministry of PP & PA; BPS.



Figure 7.14 Gender Empowerment Measure (GEM) in 23 districts/municipalities across South Sulawesi

0

10

20

30

40

50

60

70

2008 2009

Source: The Ministry of Women’s Empowerment and Child Protection, 2010.

7.3.2 Gender Issues in Coastal Areas

Women’s labor absorption in South Sulawesi during the period 2005-2009 was signifi cant and

increased consistently from 71 percent in 2005 to 88 percent in 2009. Under closer observation, the majority of the labor force in 2005, or 873,000 (71%) out of 1.2 million workers found a job in South Sulawesi. This fi gure continued to rise in 2006 and 2007 to 78 percent and 82 percent respectively, while in 2008 and 2009 the absorption rate increased to 88 percent. Although the women’s labor absorption rate is quite high, most women receive lower wages than male workers for the same work. This impacts the GDI, where the contribution of women’s incomes is only about 29.84 percent, compared 70.16 percent for men.

Figure 7.15. Level of absorption of female work force in South Sulawesi during 2005 – 2009

874

1,074 1,229 1,220

-

200

400

600

800

1,000

1,200

1,400

2005 2006 2007 2008 2009

Th

ou

san

d

Total Female Workers Total Female Workforce

Source: Calculated based on Susenas data.


However, an anomaly can be observed in the economic contribution of women to coastal household

income, particularly among households involved in marine fi sheries in which women contribute

more revenue than their husbands. The involvement of women in fi shery activities covers the whole range of activities, including production, processing and marketing. Around 70 percent of coastal women are engaged in more than one activity, such as processing and marketing. Based on 2011 data, a fi sherman wife’s income contribution from the production, processing and marketing is 1.3 percent greater than her husband. Meanwhile, revenue contribution from the wife from production and processing activities is 8.83 percent greater than her husband. The biggest diff erence can be seen in the processing and marketing activities, amounting to 18.53 percent. But in a single activity, such as marketing, the wives’ revenue contribution is 11 percent lower than their husbands’.

Table 7.3. Average household revenue and percentage of women’s contribution to household revenue by type of activity

No. Type of Activity Household Revenue

Percentage of Contribution

Husband Wife Other Household Members

1.Production, processing & marketing 2,757,150,- 43.00 44.30 6.25 6.45

2. Production & processing 2,428,600,- 35.58 44.41 12.22 7.79

3. Processing & marketing 2,314,300,- 34.87 53.40 4.85 6.88

4. Marketing 2,752,777,- 52.06 41.06 3.18 3.70

Source: Primary Data of PSKMP UNHAS, 2011.

Although wives generally contribute more income to households than husbands in coastal areas, it

is not always directly proportional to the time they spend working. With a relatively clear division of labor between husband and wife in the household economy, it is evident wives are allocating more time to processing and marketing activities, working as much as 153.56 hours more per month than their husbands. This is directly proportional to the contribution income. The same conditions can be seen in the activities of production, processing and marketing, with a diff erence of 38.81 hours per month.

Table 7.4. Average allocation of household labor by type of household economic activity in a day, 2011

No.Type of Household Economic

Activity

Allocation of Labor (Hr/day)

Husband WifeOther Household Members

Male Female

1. Production, processing & marketing 12.27(368.33)

13.56(407.14)

10.33(310)

10.66(320)

2. Production & processing 14.8(444.5)

9.75(292.8)

12.08(362.5)

7.7(231.66)

3. Processing & marketing 6.2(187.14)

11.35(340.7)

4.88(146.6)

10.66(206.66)

4. Marketing 8.9(267.77)

10.51(315.55)

8.55(256.66)

9.10(297.5)

Source: Primary Data of PSKMP UNHAS, 2011.Remarks: Number between parentheses means average allocation manpower in 1 month (hr/month).



However, when viewing the production, processing and marketing activities there are irregularities

in the time allocated compared to revenue contribution. On the production and processing activities, the time allocated by a wife is less than the husband with a diff erence of 151.7 hours per month, while the wife’s income remains larger. The same irregularities occurred in the marketing stage, in which the wife allocated more time, 47.78 hours per month more than her husband did, but the woman’s income is lower. For marketing work, the wife allocates a lot more time than the revenues she obtains, in accordance with the overall condition of the indicators listed in the GEM. However, such irregularities in production and processing activities need to be analyzed further fully understand this pattern.


The GDI and GEM in South Sulawesi have shows improvement year-by-year, but remain below

South Sulawesi’s HDI and under the national averages. This indicates that there is still a gender gap in South Sulawesi. Some policy options for improving the GDI and GEM include: i) realization of equality and fairness through the implementation of gender mainstreaming; ii) development of gender responsive programs and activities for a healthy life; iii) development of informal education programs and activities to enhance gender responsive literacy; iv) increasing public awareness regarding the nine-year and 12-year Compulsory Education Programs, which should be gender responsive; and v) development of political education programs and activities, especially for women.

The percentage of female-headed households in South Sulawesi is mostly evenly distributed

by income class, but the percentage of poor households headed by women (quintile 1) tended

to increase (sub-section 7.1). It is evident from the percentage of female-headed households in the lowest income groups that the number tended to increase between 2005 and 2009. In this regard, it is recommended the government develop programs and activities to support and increase household income of poor female-headed households, for example through skills training and development, provision of capital, or improving access to markets.

Contrary to the general pattern, where women’s incomes are lower than men’s, women in the

coastal area of South Sulawesi contribute a lot more to the household economy. Despite this, their daily activities limit them to informal aspects of production, such as processing and marketing fi sh. To enhance the skills and incomes of women, it is recommended the local government: i) develop programs and activities to enhance women’s technical and business management capacity; ii) develop simple processing technology, especially technology that can be eff ectively and effi ciently implemented in coastal areas; and, iii) increase cooperation between the government, private sector and communities in the development and diversifi cation of the fi shing industry.

Annexes


Annex A. What is the South Sulawesi Public Expenditure Analysis?

Having seen the experience of numerous areas in Eastern Indonesia in implementing the Public Expenditure Analysis and Capacity Harmonization (PEACH), provincial government of South Sulawesi initiated the implementation of similar program in the province.

Implementation in other provinces has shown that participatory public expenditure analysis is a good starting point to improve the quality of subnational government public expenditure management in performing their functions and responsibility newly apportioned to them following the decentralization.

In responds to that need, the World Bank, in collaboration with a research team organized by the Research Centre for Policy and Management of Development (P3KM), Hasanuddin University has performed a comprehensive public expenditure analysis to help strengthen subnational government’s capacity. The South Sulawesi PEACH aims to improve budget resource allocation to contribute to a better public service provision at subnational in accordance with subnational government’s preferences and deliberations. The aforementioned objective can be achieved by involving decision makers as well as other stakeholders in identifying public expenditure priorities and fi nancial management. The main goals of the Public Expenditure Analysis (PEA) component are as follow:(I) to obtain a better understanding of public expenditure management in a province, particularly related

to the participatory planning and budgeting, as well as provision of basic services.(Ii) to develop strategies to improve South Sulawesi fi nancial management to achieve better public service

provision and public capital investment in order to stimulate higher economic growth.(Iii) to establish a better system to analyze and monitor the subnational budget. Such system could

comprise of:− establishing a network of counterpart from local universities in South Sulawesi and subnational

government institutions to take the lead of the implementation of South Sulawesi PEACH, thereby building capacity to be able to independently conduct public expenditure analysis in the future;

− providing technical assistance/capacity enhancement for this network to enable it conducting similar analysis in the future.


Annexes

Annex B: Methodology Notes

All APBD data in this report were obtained from the provincial government and district/municipal governments in South Sulawesi in form of local regulation. The data from 2005-2009 are of budget realization, whereas for 2010 the data are of budget revision, and for 2011 the data are of APBD draft/main. The budget data have been adjusted using infl ation with 2010 as the base year.

Categorization of sectoral expenditure is as follows: (1) data on infrastructure expenditure is the aggregated fi gures of public works expenditure, housing expenditure, and transportation expenditure; (2) data on education sector expenditure is the aggregated fi gures of education expenditure, cultural aff airs expenditure and library expenditure; (3 ) data on health sector expenditure is the aggregated fi gures of health aff airs; and (4) data on agriculture expenditure is the aggregated fi gures of agriculture expenditure and food security-related expenditure.

The macro data on regional development of South Sulawesi, output and outcome performance data of the strategic sectors, data on commodities, and data related to strategic issues, are mostly obtained from BPS publications among others Development of Several Key Indicators for Socio-Economy of Indonesia, BPS Strategic data, South Sulawesi in Figures, Indicators of Social Welfare, and Population Census 2010 results.Some other socio-economic data are obtained from the National Socio Economic Survey (Susenas) which further processed by the World Bank, UNDP, Coordinating Ministry for People’s Welfare, and from the provincial and districts/municipal governments in South Sulawesi.


Annex C: Matrix of Conclusions and RecommendationsTable C.1. Matrix of Conclusions and Recommendations for Subnational Development Planning and Financial Management Chapter

PLANNING AND BUDGETING

Conclusions Recommendations

District/municipality’s development agenda has

been adjusted to the province’s agenda as set out in

the RPJMD, but has not been aligned to the national

development agenda in RPJMN.

Subnational governments need to be more focused on preparing all the required budgeting documents at district/municipal level and especially at SKPD level.

The governments should focus more on ensuring the completion of the annual planning documents (i.e. RKPD and Renja SKPD) because both documents are often overlooked.

Subnational government through Bappeda should organize a forum to create equal understanding on the importance of the availability of each planning document to be available for each SKPD.

At both provincial and district/municipal level,

the local SKPDs’ Strategic Plan (Renstra) and Work

Plan (Renja) have not consistently described all the

priority programs from the RKPD and RPJMD. In fact

there are a number of SKPD with no annual planning

documents

Subnational governments need to implement reward and punishment mechanisms for SKPD, based on their success or failure in completing their RKPD and Renja.

A number of districts are overdue in submitting their

key planning and budgeting documents, and there

are a number of programs listed in Renja but has no

allocation in the APBD, and vice versa.

The overdue is not just infl uenced by the process in the executive body, it also to aff ected by the process legislative. Thus institutional and human resources strengthening should also involve the legislative.

The quality of Musrenbang’s implementation

and documentation is still poor, as indicated by

small number of community proposals being

accommodated through the Musrenbang.

Musrenbang implementation must be consistent and in line with to the planning shcedule/timeline at every level of government.

Mentoring and facilitating during Musrenbang process, especially at kecamatan and village/kelurahan level to record the process and the proposals, also to narrow down the recommendations.

In order to evaluate Musrenbang’s eff ectiveness, audit on Musrenbang’s outcome is important to see how the fi nal result of Musrenbang actually accommodate the initial proposals.

On a number of districts/municipalities, correlation

between RKPD and RAPBD/budget is still weak, as

indicated by the existance of some programs and

priorities in RKPD and Renja SKPD with no budget

allocation in RAPBD/APBD, and vice versa.

TAPD and PAL should use RKPD and Renja SKPD as the main reference in formulating their DPA and RAPBD/APBD.

Institutional capacity and HR competence of

subnational government offi cers and program/

fi nance managers and planners have not been

adequately represented in the application of

performance-based budgeting, both at the regional

level and among SKPDs

Specifi cally placed the personnel for development planning with suitable academic knowledge or have been taking development planning trainings.

Specifi cally placed the personnel for regional fi nancial management with economic or public fi nance and accounting background, or at least already taking training on regional fi nancial management.


Annexes

PLANNING AND BUDGETING


The internal and external monitoring (audit) still

focus on the completion of the budget documents

and whether those documents already match the

planning documents.

In this regard the government need to implement external and internal audit to the planning document and budgeting, as well as to clarify the correlation between them.

South Sulawesi Province, and East Luwu District

and Pare-pare City have a high score in the regional

fi nancial management (PFM) analysis.

The three governments can serve as both the learning center and example for other regions on PFM, at least in terms of document availability

Table C.2. Matrix of Conclusions and Recommendations for Subnational Revenue and Subnational Expenditure Chapters

REVENUE


Real subnational revenue in South Sulawesi

is increased and mostly managed by

district/municipality, but the biggest

contributor to the subnational revenue is

the balancing funds

Reviewing and expanding the potential of local taxes and levies (though small in value) by taking into account the latest Law on Regional Tax and Retribution ,

Improving the administration system of subnational tax collection and levies to suppress the leakage,

Provide training on taxation for subnational government offi cials, especially related to selecting targets based on potentials,

Providing proportional incentives to Regional Tax and Retribution collector,

Assessing the factors that cause low and unstable own source revenue generated from management of regional capital (pengelolaan kekayaan daerah yang dipisahkan) and other legitimate PAD,

Evaluating the eff ectiveness of local regulations or Peraturan Daerah (Perda) associated with the eff orts to increase revenue,

Evaluating the appropriateness of services provided to the public and the levy charged

Shared revenue (DBH) received by the

provincial government from tax has

increased, but for district/municipality the

amount is not signifi cant

Review on potential sources of Other Revenues at the district/municipal level

Evaluation on the proportion of Tax-Shared Revenue (DBH Pajak) transfer to district/municipal government

The gap of revenue per capita between

some districts/municipalities in South

Sulawesi varies and quite high, infl uenced

by PAD and the Balancing Funds

The province cannot rely on transfers from central government, but should increase their own source revenue. Districts with lowest PAD per capita among others are Jeneponto, Gowa and Bone. Or districts with large Balancing Fund and small PAD such as Barru and Bantaeng.

South Sulawesi Government experienced

defi cit almost every year

Explore sources of loans and bonds to serve as soft loan, Subnational governments need to increase their capacity to

manage the debt to avoid being trapped in debt.


EXPENDITURES


Real government expenditure in South

Sulawesi had increased in 2005-2010,

however the proportion of personnel

expenditure to total expenditure is

increasing and becoming more dominant

compared to capital expenditure.

Subnational governments need to pay more attention to fi nancial management aspects consisting of planning, implementation, and monitoring and evaluation

Moratorium on personnel recruitment (not adding new staff ) for the next 2-3 years

Recruit more of technical staff such as accountants, health workers and engineers in a smaller number than the number of civil servants retiring.

The largest share of expenditure is

personnel spendings on education sector

and it shows an increasing trend over the

years

It is imperative that for the next few years, the government of South Sulawesi should not add or recruit more teachers, but instead create a better redistribution of the existing teachers from urban to rural areas where local schools are lacking teachers. Or from districts having higher ratio of teacher-student to districts/municipalities where such ratio is still low.

Teacher certifi cation policies need to be more selective so that the burden of the budget could be reduced and should be followed by monitoring and sanctions for teachers who have received such certifi cate but fail to show an increased performance (quality educational services).

Expenditure allocation by sector varies and

highly unequal, in which the education,

infrastructure and public administration

sector receiving most of the allocation

while health and agriculture sectors receive

relatively smaller allocations

The proportion of budget allocation for strategic sectors such as health and agriculture should be increased signifi cantly.

In addition to health and agriculture sectors, sectors related to economic and livelihood (small and medium enterprise development and empowerment of rural communities, labor, maritime aff airs and fi sheries, and trade) should receive more budget allocation as an eff ort to empower and strengthen local economic growth.

Expenditure allocation for activities to

achieve gender equality and fairness in

South Sulawesi is still relatively small

Strengthen the commitment of policy makers in each agencies associated with the implementation of gender mainstreaming.

Budget planner at government agencies need to receive training and mentoring on gender mainstreaming strategy related to implementing a more gender-responsive budgets.

A review/study need to be conducted on the appropriate size of gender responsive budget across government agencies.


Annexes

Table C 3. Matrix of Conclusions and Recommendations for Sectoral Development Chapter

EDUCATION


The proportion of total education

expenditure allocated to personnel

is very large, while the proportion

allocated to capital expenditure is very

small

The proportion of expenditure allocated for staff needs to be limited so that capital expenditure can be elevated to a more signifi cant level.

A moratorium on hiring for the next few years or at least a zero growth policy on hiring new employees should be considered to reduce the proportion of expenditure on personnel.

Direct expenditure on employees needs to be more streamlined.

Increasing education expenditure in

South Sulawesi has improved some

outputs, especially the teacher-student

ratio, but has not yet elevated overall

results.

Education expenditure should be directed at improving the literacy rate and average years schooling for districts which have performed poorly on these indicators.

At high scholl level, recruitment of new teachers is needed, but not necessarily for elementary school and junior high school level

Conduct outreach program and include all school-aged children to school.

Subnational governments should pay greater attention and allocate an appropriate level of funding to eradicating illiteracy with more focus on women and in the southern part of South Sulawesi, namely Districts of Jeneponto, Bantaeng, Takalar and Gowa.

Policy to Reallocate teachers from districts/municipalities with a low student-teacher ratio to the areas with high student-teacher ratio.

The share of the budget for free

education policy is relatively large and

shows an increasing trend over the years

Given the free education policy has been implemented since

2008, it is necessary to now conduct a thorough evaluation of

its eff ectiveness.The free education policy needs to be closely correlated with

output performance targets and performance results.

Gender inequality issues continue to

hamper the overall performance of

education in South Sulawesi, especially

for women aged over 29 years

The government need to impose a Crash Course or Kejar Paket A specifi cally for that age group.

It is also recommended that women who are illiterate be trained in other disciplines as part of their empowerment

The free education policy has eased

access issues for school-age children

that already enrolled. but the policy has

not addressed eff ectively aff ordability

for those school-age children that have

not yet enrolled to school and with no

capacity to pay for education

The free education policy should be followed up with additional interventions to encourage more school-age children to enter school, especially in districts that are geographically constrained (mountainous and coastal regions/islands) and economically or culturally impeded (where school-age children cannot go to school because of work)

Provincial and local government cooperation should be realized as an umbrella for these eff orts.

Average household expenditure on

education shows considerably large

gaps between income groups. The

poorest income groups in the districts

of Selayar, Bone, Sidrap and Luwu spent

relatively more on education than the

same income groups in other districts.

Eff orts should be made to reduce the burden of expenditure on education for the poorest income groups, with priority to be given to those in Selayar, Bone, Sidrap, and Luwu.

The free education policy should ensure more favorable treatment of the poorest income groups .


HEALTH


Life expectancy in South Sulawesi is

still below the national average, while

maternal and infant mortality are higher

Intensive socialization among poor households of the importance of improving nutrition in young children

a special intervention program in malnutrition-prone areas and among communities with the highest number of children under fi ve suff ering from malnutrition

Measures to achieve equal coverage for prenatal and postnatal care in rural areas and among farmers, fi shermen and laborers.

Intensifi ed gender socialization, especially among pregnant women and their husbands

The proportion of regional expenditure

allocated to health is only 8 to 10

percent per year, with personnel

expenditure continuing to dominate

total health expenditure

The proportion of expenditure allocated to health should be increased and to achieve a better balance between capital, personnel and goods and services expenditure.

Health expenditure should also support preventative programs rather than just focusing on treatment.

Financing constraints continue to

hamper the Free Health program

It is necessary to create a model for cross-border fi nancing, both among provinces and between districts/municipalities.

It is also necessary to establish uniformity across the free health service costs applicable to all districts/municipalities within South Sulawesi

Health facilities in South Sulawesi are

now spread evenly across districts but

health workers are more concentrated in

urban areas

health workers should be redistributed from urban areasTo provide additional incentives for health workers working in

remote areas.

INFRASTRUCTURE


The fl ow of passengers and goods at

the new airport has increased while

decreasing at sea ports.

subnational government be more consistent in its commitment to improving the existing infrastructure such as airport passenger terminals, vehicle counters, parking lots and comfort in the airport

Coverage of basic infrastructure in

South Sulawesi is better than the

majority of provinces in Sulawesi

In Selayar District and Luwu Raya District, there is a specifi c need for the local government to consistently allocate signifi cant infrastructure expenditure due to the population distribution and geographical conditions.

Access among female-headed

households to clean water has tended to

deteriorate

To increasing awareness of heads of households regarding sanitation and clean water

Subnational governments should also implement programs to eliminate discrimination against female-headed households

Improved infrastructure expenditure

in South Sulawesi has impacted the

growth of road length at the district/

municipality level

It is recommended that subnational governments to pay attention to the maintenance and quality of roads rather than simply increasing the total length

Rice production quality has improved in

irrigated fi elds

Because there is a positive relationship between productivity and irrigated land coverage, it is recommended that the government focus on increasing the ratio of the irrigation network and land quality rather than encouraging extension on the existing farmland


Annexes

AGRICULTURE


The fl agship agriculture development

program is fully supported by the

districts/municipalities in South

Sulawesi. This can be seen from the

large allocation of agriculture spendings

of districts/municipalities that are prime

commodities centers. But the majority

of it is still for personnel expenditure

More agriculture expenditure should be directed to developing the processing or production infrastructure (as capital spending) other than the more conventional spending such as mentoring.

In general, agriculture sector and each

sub-sector performance is good and

already in line with the achievement

of targets set in the annual plan,

particularly in prime commodities which

are currently the mainstay of South

Sulawesi.

Consistently implement the basic programs as already set in RPJMDDevelop three Priority Commodities, namely rice, maize and cattle

towards the improvement of value added.Improve the quality of rice and maize commodities through the

development of organic products. Organic products can increase farmers’ income by reducing production costs and higher market price.

Develop organic agricultural products through integration with cattle farming.

Integrate rice and corn plantation with cattle farming to produce organic fertilizer, animal feed from crop residues, and energy sources (biogas) to make production cost lower and better quality and higher market prices.

should also develop its organic shrimp industry to satisfy the requirements of international demand as well as restore or upgrade the shrimp ponds ecosystem to ensure sustainable and continuous shrimp farming.

Develop the cocoa and seaweed farming with the aim of producing ready-to-consume processed products.

Develop the processing of raw materials into ready-to-consume products in order to create value-added or income of the community and employment opportunities.

Contribution of agricultural sector tends

to decrease with relatively small growth

rate compared with other sectors in

South Sulawesi. In addition, most of the

workforce still rely on agriculture sector

Conduct mapping of the prime commodities through the synergy of stakeholders in agriculture development.

Conduct post-harvest production diversifi cation to increase value added of the sector.

Increase private investment in sectors which has high thrust and acceleration.


Table C.4. Matrix of Conclusions and Recommendations for Prime Commodities Chapter

AGRICULTURE SECTOR EXPENDITURE


The fl agship agriculture development program is

fully supported by the districts/municipalities in

South Sulawesi. This can be seen from the large

allocation of agriculture spendings of districts/

municipalities that are prime commodities

centers. But the majority of it is still for personnel

expenditure

More agriculture expenditure should be directed to developing the processing or production infrastructure (as capital spending) other than the more conventional spending such as mentoring.

MAIZE


Maize production in 2010 reached 1.4 million tones

or 93.3 percent from the target which was set to be

at minimum of 1.5 million by 2013

Commodities development can be directed toward organic cultivation to increase the quality and reduce production costs, which in turn will increase farmers’ income

COCOA


With the implementation of various government

policies and programs, cocoa production and

productivity trend is increasing (2009 and 2010),

although still below the production and productivity

of 2006

Rehabilitation, rejuvenation and intensifi cation still need to be done by improving seeds, post harvest maintenance and treatment, the activities that are not included in the Gernas program.

Institutional strengthening for cocoa farmers is equally important as an eff ort to establish “self reliance” farmers

Initiate cocoa industry since this province has an absolute advantage over other provinces in Indonesia.

The budget for cocoa development program mostly

comes from the central government

the government should be more committed to allocate more funds for this program, given that South Sulawesi almost has no competitors for cocoa products

CATTLE


The one million cattle target is expected to be

achieved by 2013

Any possible interventions should be prioritized to promote artifi cial insemination, improvement of natural mating, reproductive disorders and health issue treatment, secure the productive cows, improvement and development of better cattle feed, quality improvement of human resources and institutional, provision of cow or newborn and control over livestock traffi c

SEAWEED


Although increased, seaweed production in each

district still fl uctuated in terms of volume, especially

for G. Verrucosa, the potential for production

increase is high. The ponds where the seaweed is

cultivated have not been optimally utilized

Government intervention and support can be done through the management of cultivation centers to produce better seeds.

Government can also improve the institutional skill of the seaweed farmers (producers) and traders to ensure reasonable and stable price for the benefi t of the farmers


Annexes

SHRIMP


The trauma from previous outbreak of shrimp

disease has led to the declining production of

giant tiger prawn since farmers prefer to cultivate

other species. This leads to non-achievement of the

production target

Government needs to revise the target, because intensive shrimp farming (placing as many as 30 shrimps per square meter) poses them to higher risk of disease

government should be able to fi nd solutions to reduce the risk of such intensive pond practice

Production of fry is still far below the demand Fry production in the hatchery should be maximized, since the production is only half of its maximum capacity

Fry production is still below demand, so government needs to build a new hatchery.

The majority of shrimp ponds in South Sulawesi have

not been fully optimized

South Sulawesi government should optimize the use of ponds and if no new ponds can be constructed, they should do so by maintaining quality of the environment, since shrimp farming tends to create natural environment degradation

Table C.5. Matrix of Conclusions and Recommendations for Strategic Issues Chapters POVERTY


The amount and percentage of poor people in

South Sulawesi declined consistently over the

period 2006-2010

Subnational governments (provincial and district/municipality) are expected to intensify eff orts to implement programs and allocate more resources to alleviate poverty in South Sulawesi.

the governments need to develop poverty reduction road-map areas for the short, medium and long-term

The percentage of poor continued to decrease in

line with the increasing pace of economic growth

and declining unemployment rate

Inclusive economic development, development of the upstream sector and a more pro-poor budgeting system, as well as eff orts to fulfi ll people’s basic rights should be actively encouraged to achieve much more signifi cant development results

Pangkep, Jeneponto and North Toraja districts have

the highest percentage of poor in South Sulawesi

Policy and poverty reduction programs should be focused and intensifi ed in these three districts by encouraging the involvement of development partners, such as private companies, state enterprises, NGOs, donor agencies, etc…

As with any amount and percentage of poor

people, the Poverty Depth Index (P1) and Poverty

Severity Index (P2) in South Sulawesi also decline

consistently over the period 2006-2010

Government of South Sulawesi should design development program that provides opportunity for all citizens, especially the poor, to get a job and earn decent income.


ENVIRONMENT


Most of the activities in the provincial BLHD do not

relate to the environment and natural disasters

The government should provide incentives to people and companies for successfully implementing green concepts into their activities not only in the form of recognition awards but also material rewards, such as tax breaks.

It is imperative that the natural disaster mitigation plan taking into account the local socio-cultural context and aspects.

Subnational government should implement a cost sharing principle on environment damage or environmental taxes to private sector.

Minimize the non-human caused natural disaster

trough several mitigation measures

The provincial and district/municipality governments should develop and implement natural disaster hazard mitigation plans for each potential disaster based on mapping of local hazard.

Disaster budgeting should better coordinated between the province and districts/municipalities

GENDER


The GDI and GEM in South Sulawesi have shows

improvement over the years, but remain below

South Sulawesi’s HDI and under the national

averages

Realization of equality and fairness through the implementation of gender mainstreaming

Development of gender responsive programs and activities for a healthy life

Development of informal education programs and activities to enhance gender responsive literacy

Increasing public awareness regarding the nine-year and 12-year Compulsory Education Programs, which should be gender responsive

Development of political education programs and activities, especially for women

The percentage of female-headed households

in South Sulawesi is mostly evenly distributed

by income class, but the percentage of poor

households headed by women (quintile 1) tended

to increase

It is important that the government develop programs and activities to support and increase household income of poor female-headed households, for example through skills training and development, provision of capital, or improving access to markets

Contrary to the general pattern, where women’s

incomes are lower than men’s, women in the coastal

area of South Sulawesi contribute a lot more to the

household economy

Develop programs and activities to enhance women’s technical and business management capacity

Develop simple processing technology, especially technology that can be eff ectively and effi ciently implemented in coastal areas

Increase cooperation between the government, private sector and communities in the development and diversifi cation of the fi shing industry.


Annexes

Ann

ex D

. Bud

get M

aste

r Ta

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Tabl

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even

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y So

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Pro

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52

00

62

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72

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82

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4.82

1,

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63

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1,94

8.68

1,

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Regi

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Tax

788,

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32

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1,

175,

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54

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3,47

9.35

1,

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7.07

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67,8

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56,9

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Gra

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Dis

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182,

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55

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215.

26

246,

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225,

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52

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To

tal

Re

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e7,

380,

235.

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43.3

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12

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95,0

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4 13

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13,2

05,8

88.7

6

Not

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mill

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Rupi

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Annexes

Table D.2. Expenditures by Economic Classifi cation

2005 2006 2007 2008 2009 2010* 2011**

Province

Personnel (billion IDR) 469 467 523 634 639 632 723

Goods & Service (billion IDR) 358 450 448 493 493 576 559

Capital (billion IDR) 316 316 393 353 313 334 345

Others (billion IDR) 492 581 888 1,000 805 1,100 1,149

Total (billion IDR) 1,635 1,814 2,252 2,480 2,250 2,642 2,776

Districts

Personnel (billion IDR) 3,162 3,502 5,543 5,875 0 7,475 7,763

Goods & Service (billion IDR) 1,316 1,844 1,739 1,825 0 2,181 2,306

Capital (billion IDR) 1,445 2,666 3,657 4,070 0 3,400 2,622

Others (billion IDR) 424 496 760 1,056 0 995 799

Total (billion IDR) 6,347 8,508 11,700 12,826 0 14,052 13,491

Total

Personnel (billion IDR) 3,631 3,969 6,066 6,509 6,766 8,108 8,487

Goods & Service (billion IDR) 1,674 2,294 2,187 2,318 2,476 2,757 2,865

Capital (billion IDR) 1,761 2,982 4,051 4,423 4,043 3,734 2,967

Others (billion IDR) 916 1,077 1,649 2,056 1,481 2,096 1,948

Total (trillion IDR) 8.0 10.3 14.0 15.3 14.8 16.7 16.3


Table D.3. Expenditures by Sector

2005 2006 2007 2008 2009 2010* 2011**

Province

General Administration 401 435 473 491 466 512 510

Agriculture 42 43 83 95 100 123 125

Marine and Fishery 14 16 24 24 32 30 31

Mining and Energy 12 12 18 17 21 19 18

Forestry and Plantation 30 31 20 19 21 21 20

Industry and Trade 37 43 48 27 33 27 27

Cooperatives 19 38 18 19 21 18 16

Capital Investment 9 10 11 11 11 13 17

Employment 18 17 19 18 19 20 21

Health 150 152 167 223 214 232 239

Education and Culture 83 116 117 104 108 110 108

Social 16 18 18 18 22 29 35

Spatial 127 107 81 0 69 20 16

Housing 0 0 0 69 0 0 30

Public Works 138 155 217 311 252 304 340

Transportation 36 33 40 25 46 39 46

Environment 9 9 10 9 10 12 11

Demography 0 0 0 0 0 0 0

Sport 0 0 0 0 1 14 17

Tourism 0 0 0 0 0 0 0

Land Aff airs 0 0 0 0 0 0 0

Transfer to Sub-Regions 492 581 888 1,000 805 1,100 1,149

Total 1,635 1,814 2,252 2,480 2,250 2,642 2,776


General Administration 2,275 2,856 3,127 3,432 2,881 3,149 3,532

Agriculture 145 239 361 379 329 369 386

Marine and Fishery 69 109 129 142 115 139 153

Mining and Energy 22 25 31 32 50 31 35

Forestry and Plantation 57 69 81 83 98 89 92

Industry and Trade 60 55 57 67 55 56 42

Cooperatives 19 22 59 49 57 75 59

Capital Investment 2 1 4 4 6 7 11

Employment 29 35 35 38 40 43 33

Health 508 687 1,052 1,155 1,315 1,507 1,386

Education and Culture 1,585 1,913 3,392 3,599 4,052 5,028 4,893


Annexes

2005 2006 2007 2008 2009 2010* 2011**

Social 26 36 63 63 90 82 102

Spatial 106 211 114 131 112 102 59

Housing 97 87 108 56 45 78 72

Public Works 714 1,400 2,002 2,177 2,243 1,925 1,457

Transportation 64 78 106 105 117 131 120

Environment 51 78 106 143 127 136 145

Demography 72 71 67 67 57 57 59

Sport 0 1 4 10 22 20 32

Tourism 25 38 39 39 23 28 19

Land Aff airs 0 0 3 1 6 6 4

Transfer to Sub-Regions 424 496 760 1,056 676 995 799

Total 6,347 8,508 11,700 12,826 12,516 14,052 13,491

Note: Figures in billion Rupiah.

Table D.4. Deconcentrated Central Government Expenditure to South Sulawesi province

2005 2006 2007 2008 2009

PUBLIC SERVICES 356 213 173 113 128

REGIONAL DEFENSE 0 0 0 0 0

SECURITY AND STATE OF ORDER 0 2 0 3 13

ECONOMY 2,126 2,864 2 4,023 4,850

ENVIRONMENT 58 175 3,776 166 258

HOUSING AND PUBLIC FACILITY 2,193 719 174 2,975 4,392

HEALTH 1,255 2,387 1,164 949 932

TOURISM AND CULTURE 54 55 2,023 53 104

RELIGIOUS AFFAIRS 15 19 54 0 0

EDUCATION 4,978 7,199 0 9,145 14,730

DEMOGRAPHY AND SOCIAL PROTECTION 250 334 7,569 146 143

Note: Figures in billion Rupiah.


Table D.5. District/municipality per capita revenue by APBD-revision of 2010

PAD

DAU DAKShared-

RevenueOthers

Tax Charge

Profi t from Separated Proceeds of Regional Asset Management

Other

PAD

Makassar 100,208 47,016 4,572 10,167 481,021 34,161 133,018 277,201

Pare-Pare 47,475 230,675 12,544 53,184 2,068,333 181,520 383,524 859,358

Palopo 32,010 158,032 6,169 21,781 1,881,928 147,808 156,866 407,775

Selayar 14,077 23,213 47,136 64,190 2,126,037 292,610 343,411 507,071

Bulukumba 22,156 60,695 2,533 47,878 970,771 129,006 100,082 322,432

Bantaeng 12,949 21,555 18,263 39,916 1,459,381 172,100 190,451 418,866

Jeneponto 7,568 12,734 7,989 15,098 919,950 126,987 170,886 315,395

Takalar 10,003 79,760 14,675 31,097 1,129,618 161,527 85,448 383,762

Gowa 12,488 44,911 6,429 4,257 660,839 89,662 46,861 246,617

Sinjai 11,489 29,953 6,115 32,342 1,290,891 169,579 155,848 287,628

Maros 38,077 52,111 7,290 34,074 1,102,309 145,715 109,981 126,149

Pangkep 129,100 49,280 29,559 33,394 1,242,718 144,372 97,512 68,908

Barru 17,480 24,048 13,743 30,531 1,600,566 196,582 182,111 708,725

Bone 10,436 34,041 2,719 20,251 755,249 97,112 87,237 76,334

Soppeng 10,513 41,138 4,514 35,108 1,484,178 154,466 131,905 386,076

Wajo 11,412 24,521 15,138 59,184 948,345 128,115 200,472 319,753

Sidrap 14,352 70,980 12,914 91,547 1,170,159 137,110 289,706 675,339

Pinrang 12,597 63,163 15,780 22,306 1,040,167 138,088 112,520 349,885

Enrekang 9,486 37,833 15,091 86,094 1,399,266 168,793 224,352 583,754

Luwu 10,755 40,005 5,637 21,805 1,101,664 151,557 65,943 249,458

Tator 9,428 91,401 4,531 11,612 1,340,718 222,443 199,313 359,103

NorthLuwu 12,279 66,719 3,010 17,311 1,193,001 141,134 127,887 312,963

EastLuwu 62,332 74,112 12,352 59,013 982,624 115,894 383,499 510,143


Annexes

Table D.6. District/municipality per capita expenditure for strategic sectors by APBD-revision of 2010

Education Health Infrastructure Agriculture Fishery

Makassar 483,404 79,663 172,513 8,122 -

Pare-Pare 1,245,430 501,069 1,183,034 73,589 -

Palopo 1,030,699 461,994 166,662 46,963 31,327

Selayar 844,522 293,471 607,271 175,938 87,558

Bulukumba 666,298 174,182 237,623 49,229 17,067

Bantaeng 877,680 192,562 368,483 95,185 18,748

Jeneponto 768,791 204,582 226,209 66,097 25,854

Takalar 783,535 304,185 172,917 59,993 62,037

Gowa 542,739 108,259 246,661 25,041 9,091

Sinjai 745,934 135,610 399,293 78,208 36,565

Maros 670,624 198,673 94,121 41,499 20,678

Pangkep 861,749 249,923 323,208 38,869 41,495

Barru 946,856 192,871 576,024 55,803 28,532

Bone 287,220 97,975 141,806 20,010 16,770

Soppeng 738,900 210,189 252,185 67,349 -

Wajo 524,631 131,103 393,383 31,208 16,514

Sidrap 820,480 263,573 393,203 135,293 -

Pinrang 724,747 148,508 275,996 63,080 23,117

Enrekang 950,941 747,750 553,116 112,780 -

Luwu 657,378 179,177 130,891 24,483 27,420

Tator 595,598 209,852 215,792 59,279 8,976

North Luwu 582,249 297,893 222,384 52,092 21,760

East Luwu 647,623 320,835 483,981 75,004 25,883

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