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RUEKJCS/JOINT STAFF WASHDC
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UNCLAS SECTION 01 OF 02 JAKARTA 001161 
 
SIPDIS 
 
DEPARTMENT FOR EAP/MTS, INR/EAP 
DEPARTMENT PLEASE PASS AID 
USAID FOR ANE/EAA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SOCI ID
SUBJECT: SOUTH SUMATRA DECENTRALIZATION: DIAMONDS IN THE WEEDS 
 
¶1. (U) Summary. Consulate Medan surveyed decentralization programs 
at the district and city levels in Bangka Belitung and South Sumatra 
Provinces in southern Sumatra during the week of June 22-27. Bangka 
Belitung's experiences in providing a scheme for universal health 
insurance and subsidies stand out as an example of district-level 
initiatives linking districts and citizens to access critical 
services. In South Sumatra Province the Governor's initiative to 
mandate free K-12 education province-wide has yielded nearly 
universal support, including from civil servants who are 
implementing the program in Palembang, Sumatra's second largest 
city. End Summary. 
 
MAKING FREE HEALTH CARE A REALITY 
--------------------------------- 
 
¶2.  (SBU) While all of the District Heads and Mayors interviewed on 
Belitung and Bangka islands and in the city of Palembang agreed that 
decentralization was being conducted half-heartedly by Jakarta 
authorities, they unanimously acknowledged that their health and 
education initiatives would have been impossible to achieve even 
five years ago. Both districts visited by Consulate Medan on the 
island of Belitung have implemented an agreement with the Indonesian 
State Health Insurance program (ASKES) to provide health coverage to 
all individuals not already covered under employer-sponsored 
programs. 
 
¶3.  (SBU) The revenue allocation for the Belitung insurance scheme 
is on a cost-sharing basis with the Provincial Government footing 60 
percent of the costs and the district authorities providing the 
other 40 percent. District officials interviewed in Belitung June 22 
and 23 in both Belitung Timur and Belitung Induk districts stated 
that they have not seen widespread abuse of the program and that 
health care costs are in line with budgetary allocations. The 
program has been in existence since 2005 and recent experience 
indicates it will continue. Factors cited by local officials in the 
success of the program are Belitung's isolation, with few outsiders 
or migrants, and a population of only some 200,000.  An additional 
factor is that hospital services remain rudimentary so both the 
complexity and cost of potential procedures are limited. One 
additional challenge for the two districts is that Belitung Indok 
has better hospital facilities, causing many residents to travel 
there for treatment. 
 
WIRED TO THE WORLD IN SMALL PROVINCIAL CAPITAL 
--------------------------------------------- - 
 
¶4.  (SBU) On the neighboring, larger island of Bangka the provincial 
capital of Pangkalpinang used the latitude granted under 
decentralization for a concentrated push to vastly improve the IT 
backbone of its secondary schools. All 19 high schools in the 
provincial capital have both wifi and video conferencing systems 
(using the same Polycom-brand equipment in our Embassies and 
Consulates) and already partnering with schools in Malaysia and 
China by doing joint workshops and interactions. Beyond the school 
exchanges, the City Education Office hosts services for IT at other 
offices such as the City Planning Office, thanks to their success at 
this. They are now actively seeking U.S. partner high schools for 
their programs. 
 
DISTRICT OFFICIALS FIRMLY IN CONTROL 
------------------------------------ 
¶5.  (SBU) The city administration cited this as a perfect example of 
the types of innovative local initiatives impossible before recent 
decentralization efforts. The initiative is a direct result of the 
Head of the City Education Office, Edison Taher, collaborating with 
Pangkalpinang's Mayor Zulkarnain Karim. Mayor Karim was the most 
forceful among those we met in protecting his powers under 
decentralization, saying the governor has the right to consent to 
the mayor's political appointees, but that "it is my role to choose 
them and I will not allow any Governor to tell me what to do in my 
own house". 
FREE EDUCATION FOR ALL IN SOUTH SUMATRA 
--------------------------------------- 
 
¶6.  (SBU) The Province of South Sumatra, under the leadership of 
recently-elected (2008) Governor Alex Noerdin,  within the first 90 
days of his administration instituted a system to provide free K-12 
education province-wide effective in July. City of Palembang 
officials from Deputy Mayor Romi Herton to the heads of the City 
 
JAKARTA 00001161  002 OF 002 
 
 
Education and City Planning offices all supported the project. 
Palembang, as Sumatra's second largest city with a population 
exceeding 1.6 million, has implemented the scheme that includes 
abolishing all school and book fees for students in public 
education. The provincial and district budgets are shared, and some 
40 percent of the Local Budget Plan (APBD) for South Sumatra is now 
allocated to the education system. According to the Head of the 
Palembang City Council, Yansuri, this type of program would have 
been impossible even five years ago. Palembang has also forged ahead 
with an international-standards high school and ISO certifications 
for their schools. 
 
¶7.  (SBU) District and city-level local governments in southern 
Sumatra have capitalized on the freedom and flexibility offered 
under Indonesia's decentralization programs to create both top-down 
and bottom-up initiatives.  Whether it is the district-generated 
healthcare program in Belitung and Bangka or the province-initiated 
push for free K-12 education, these provincial and district 
officials are mastering the intricacies of managing local budget 
alloations and making the most of the revenue-sharing hat has 
greatly increased local budgets in recen years. While different 
 
parts of Sumatra face vaying sets of circumstances these southern 
Sumatr localities are examples of effective promotion of ocal 
interests and taking advantage of the opporunities that 
decentralization provides. 
 
HUME