The Effect of Village Formation on Regency/City Regional Finance in Papua Province

Abstract

According to Minister of Home Affairs Regulation No. 56 of 2015 concerning Code and Data of Administrative Area, it is mentioned that Papua is one of 34 provinces in Indonesia with the highest number of villages by 5,419 villages, 110 urban villages, and 558 sub-districts scattered in 28 regencies and 1 city. The high number of villages in a regency/city area has an effect on the amount of village funds allocated by the Central or Provincial Governments for each district/city, thus affecting the amount of regency/city APBD. Village Fund Allocation is a manifestation of the fulfillment of the right for the village to implement the principle of autonomy for the village to grow and develop following the growth of the village itself, based on diversity, participation, original autonomy, democratization, and community empowerment. However, the increasing number of village formation burdened the government budget to finance the formation of new villages, so that the village formation had a significant and positive effect on the amount of regional finance, especially regency/city and provincial APBD. For example, in the 2016 fiscal year, Tolikara Regency had a total of 541 villages spreading across 46 districts and received the largest village fund allocation of Rp320.04 billion. Thus, Tolikara Regency ranked 1st with the most villages and the largest village fund in the Papua Province. In contrast, Jayapura City with a total of 13 villages was the regency/city with the least number of villages and the least amount of village fund of Rp. 12.51 billion.