Oleh: Rudy | Agustus 18, 2007

Comparative Study on Local Government Management between Indonesia Japan

1. The Size and Structure of Civil Service

Indonesia’s civil service consists of some 4.6 million people. Of this, about 500,000 are police and military; leaving some 4 million civilian civil services comprise about 2 percent of the population. In addition, a large but unknown number of civil service workers are not registered as such. This Tenaga Kerja Non-PNS (non-pegawai negeri, or non-civil service workers) are either local government employees paid from local government revenue sources, or government employees paid from the development budget. They could add up to 20-30 percent to the numbers of public sector workers, but no systematic data are available. In addition to this, there are some 1.9 million retired civil servants whose pensions are included in the government wage bill, which is a quarter of Government spending.

At first sight, Indonesia’s civil service is highly centralized: of the 4 million civil servants, some 3.5 million, or 88 percent are “central” civil servants according to their identification number. This percentage has been very stable over the last decade and a half: in 1992 and 1985 it was 87 percent. However, almost half of the central civil servants-1.7 million-are seconded to regional governments, either at the provincial or at the district level. Most of these seconded civil servants are teachers (1.1 million primary school) and health workers (300,000). These civil servants are usually well integrated at the service delivery level, and are often perceived as “local” workers rather than central workers. After decentralization was implemented in Indonesia, teacher and health worker become local government civil servants except university lecturer which is still belong to central civil service.

Meanwhile in Japan, about 4.4 million are public employees from total labor force of approximately 65 million. Nearly a quarter of public employees work for the national government and the remaining three-quarters for local governments in prefectures, cities, towns and villages. A large percentage of local government employees are school teachers or policemen. Local governments have autonomy with different laws and regulations from those covering national employees.

National Government Civil Servants are divided into “special” and “regular” categories. Appointments in the special category are governed by political or other factors and do not involve competitive examinations. This category includes cabinet ministers, heads of independent agencies, and members of the Self-Defense Forces, Diet officials, and ambassadors. The core of the civil service is composed of members of the regular category, who are recruited through competitive examinations. This group is further divided into junior service and upper professional levels, the latter forming a well-defined civil service elite.

In the regular service, more than 300 thousand are employed in government enterprises, such as the postal, national forestry, printing and mint services. These employees are entitled to reach collective agreement on their working conditions. The remaining 500 thousand employees in the regular service are subject to NPA pay schemes, in compensation for restrictions on their labor rights.

Although each category of public employee is covered by different laws and regulations, their working conditions are very similar. In general practice, working conditions set for regular service employees are followed by other categories of the public service. In terms of posts, a law stipulates a maximum limit for the number of personnel throughout ministries and agencies, within which the number of personnel in each ministry and agency is set by a government ordinance (employees of government corporations and certain other officers are not subject to this law).

2. Organization of the Civil Service

Two bodies split the management of the Indonesia civil service. The Ministry of Administrative Reform (MenPan) is responsible for regulations governing the administration of the country. It carries out this function mainly through policy pronouncements and ministerial decrees which go largely ignored by the rest of the bureaucracy. The National Civil Service Agency-Badan Kepegawaian Nasional (BKN) is formally responsible for implementing the civil service law by issuing guidelines on hiring and firing and promotions, regulating the size of the civil service, keeps all records, and has to give approval to all appointments above a certain rank. All changes in the civil servant’s position have to be confirmed by a change letter from BKN.

Meanwhile The National Personnel Authority (NPA) is the central personnel agency of the Japanese government. The NPA was established in December 1948 under the “National Public Service Law (NPSL)”. Although under the jurisdiction of the Cabinet, the NPA operates as an independent authority. It seeks to maintain neutrality in government employees and to protect employees’ welfare and interests in compensation for certain restrictions on their labor rights.

There are at least two generic civil service systems: An English tradition where posts are classified according the qualifications required (the employment system) and a French model which is more statutory (the career system), and based on a hierarchical conception and structured into corps, grades and posts. These two civil service traditions are found in adapted forms all over the world. Both models are increasingly inspired by New Public Management paradigms and the functioning of the systems are constantly being reviewed and improved to be more professional, effective and performance oriented, and focused on provision of public services in a competitive environment. Indonesian and Japan in this case follow the career system.

3. Civil Service Pay

Indonesian civil servants are paid according to rank, seniority, and position. The pay scales according to rank include several elements: a base wage, a family allowance, a children’s allowance, a food allowance, and some other incidental allowances. Since the crisis, pay increases have also been given in the form of an allowance, not in the form of an increased base wage. In addition to the base wage and allowances, many positions either have a functional allowance, or a structural allowance. These allowances can for some positions be significantly larger than the other pay elements. For instance, a Rank IV, Eschelon Ia receives Rp. 1.950.000 (¥20.000) in base wage and allowances, but Rp. 4,5 million (¥50.000) in structural allowances per month. Salary for young bureaucrat who enters bureaucracy for the first time is about Rp 1.050.000 (¥ 12.000) and will increase every promotion.

There has long been a general perception that Indonesia’s civil service was underpaid. Studies undertaken by the World Bank and others since the early 1980s often record the perception of civil servants that they do not receive a “living wage.” In part this perception may have been fed by the convoluted pay system as described; in part the problem of underpayment seems to have been real at least for some periods in the past. Currently, however-and after heavy pay increases over the last two years-the average civil servant no longer seems to be underpaid compared to Indonesia’s private sector.

All central civil servants are paid from the central budget. For central civil servwho works in the regions and deconcentrated units, representatives of these units deliver a full list of civil servants working in their unit to the regional treasury offices the KPKN each month, together with proof of any material change that affects the wage bill (promotion, marriage, etc.). The KPKNs check their correctness-although they have no independent source of information, and upon approval, transfer the appropriate amount of money to the (commercial) bank account of the work unit. The Finance section in the work unit takes care of payment. For higher-level staff this is increasingly done by direct deposit of the payroll in an individual civil servant’s account, but for most staff it is still done in cash. Local civil service in the other side is paid from local budget.

The focus on development and the accompanying expansion of the development budget during the New Order combined with a “balanced budget” philosophy brought on the one hand suppression of the wage bill, but on the other opportunities for diverting money from the development budget to supplement salaries. Some, in the form of honoraria and management fees were generally considered as part of the system. Others-such as abuse of procurement-were not, but became the cornerstone of an elaborate patronage system.

In Japan, basic pay and most allowances for national public employees are regulated by the “Law concerning Remuneration of Employees in the Regular Service Employees (The Remuneration Law)”, which covers approximately 500,000 government employees of executive branch. The level of remuneration is set according to social & economic circumstances. The remuneration of government employees is comprised of two elements, salary (basic pay) and allowances. There are 17 salary schedules depending on type of service. Each salary schedule, except for that for the Designated Service, has grades and pay steps according to the level of complexity, difficulty and responsibility of duties. When an employee performs satisfactorily for 12 months he/she may be given a pay step increase. This does not apply, however, to senior employees of 56 years and older. In the Designated Service, which covers high-ranking officials, there is no pay step increase and the rate of salary is fixed for each post.

Allowances are paid when employees meet the conditions for entitlement. Certain allowances are paid to remunerate excessive responsibility or difficulty of duty while others are to cover living expenditures. Remuneration is paid monthly and tax, pension, health insurance premiums and so forth, are deducted in advance.

4. Recruitment and Training

In Indonesia, each ministry responsible for the recruitment for the ministry and local government is responsible for the local civil service recruitment. The recruitment is based on the merit and education basis. The general requirements are nationality and age, however education background play important role and included as the general requirement. Education basis will determine certain rank for example senior high school graduates will enter Rank IIa, meanwhile undergraduate graduates will directly enter Rank IIIa and considered as future leader of the ministry or local government section. Since there are many university graduates at present, the position for Rank II is rarely found in the recruitment announcement.

Each candidate should pass the selection procedures which include general knowledge, specified knowledge, psychology test, interview with the high rank officer, and also health test. Recruitment is conducted usually in the end of the year every year. After pass the selection, the administration matters for the successful applicant will be taken by National Civil Service Board. Successful candidates are not directly become Indonesia civil service, they shall conduct probation period which usually one year term. After one year, the probation officer called Civil Service Candidate shall submit documents necessary for their final decision to become civil service which includes training certificate of Pre-Position, Evaluation sheet by the head of the ministry and some other important document. Maximum probation term for each Civil Service Candidate is two years, if the Civil Service Candidate fails to complete the necessary training and evaluation score, he or she will directly out from the service.

Elite civil servants in Japan were recruited by and spent their entire careers in a single ministry. As a result, they developed a strong sectional solidarity and zealously defended their turf. “Equal treatment” and “merit based” are the main principles for appointment to the regular service. The power of appointment is vested in the heads of ministries and agencies. They have the final say over recruitment, promotion, transfer, retirement to dismissal, and disciplinary punishment. Decisions, however, may be delegated to high-ranking personnel within each ministry or agency.

Most initial appointments to the public service are made in junior level positions through competitive recruitment examinations held by the NPA. Mid career recruitment is uncommon. Requirements to sit these examinations are Japanese nationality and age (minimum and maximum age limit is fixed). No academic qualifications are required. Examinations are usually comprised of general knowledge tests, specialist knowledge tests and interviews. In regard to specialist knowledge tests, examinations are divided into separate sub-divisions such as law, economics, physics, etc. which each candidate may choose according to their specialization. Those who pass the written examination are automatically called for interview.

Successful candidates are entered on an eligibility list. The list is valid for a fixed period (from one to three years) according to the examinations. Enlistment, however, does not guarantee recruitment to the public service. Each ministry and agency select candidates from this list to interview, and have the final choice over whom they recruit. Although entry into the elite through open examinations does not require a college degree, the majority of its members are alumni of Japan’s most prestigious universities. The University of Tokyo Law Faculty is the single most important source of elite bureaucrats. After graduation from college and, increasingly, some graduate-level study, applicants take a series of extremely difficult higher civil service examinations: in 1988, for example, 28,833 took the tests, but only 1,814, or 6.3 percent, were successful. Of those who were successful, only 721 were actually hired.

As well as Japan Civil Service system, staff training in Indonesia is conducted by each ministry and agency. There are two basic types of training; general training conducted for each level of employee, and professional training to provide specific skills and techniques. On the job training is important mean to enhance the civil service capability and skill.

However in Japan, NPA is responsible for the overall planning and coordination of training programs conducted by the ministries and agencies and its own inter-ministerial training courses which aim at giving an opportunity for participants to reconsider their responsibilities from a broader perspective, reinforce their sense of identity as public servants to the entire community and cultivate a sense of unity among government employees.

5. Promotion & Rotation

There are two types of promotion in Indonesia civil service. First is direct promotion every four year and second is special promotion considering achievement of the civil service. Promotion and rotation are decided by Position and Rank Consideration Board (Baperjakat). Baperjakat member are high rank bureaucrat within the ministry. Rotation is conducted usually every five year to different position and different regions. In case of local civil service, they only rotate within the organization of local government.

In general practice, Japan civil service employees are rotated to different positions every few years. The positions they are transferred to are not necessarily posts within their own organizations but sometimes those in other ministries and agencies. Personnel rotated to other organizations usually return to their initial appointment ministries or agencies, at a later stage. Promotion is decided on a merit basis. No examination is conducted regarding promotion. The initial level of recruitment examination, seniority and performance record of an employee is major factors in deciding promotion. Those who passed the Level I examinations are, in practice, treated as fast streamers. It has been argued that more employees recruited through the Level II or III examination should be promoted to high level posts. The highest post career officials can be promoted to is Administrative Vice-Minister.

6. Retirement Allowance

The pension scheme for government employees is operated by the National Public Employee Mutual Aid Association, participation in which is compulsory for all employees. The pension fund is furnished by contributions from employees and the government. The mutual aid pension is, in principle, granted to those who retire after 25 years or more of service and pension payment starts from the age of 60. Full pension entitlement age will be deferred gradually from the year 2001, reaching 65 in the year 2013. The size of an individual pension is calculated according to the average salary of the retired employee throughout their entire years of public service, the number of years of service and the number of dependent family members meeting certain.

7. Retirement

The mandatory retirement age is fixed at 60 for most employees. There are certain exceptions such as that for Administrative Vice-Minister at 62, medical doctors at 65 and university professors whose mandatory retirement age are decided individually by each university.



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  2. was looking for public officer’s education and training when i got this page. good writing, Kak! thx 4 sharing

  3. Fantastic, I did not know about this topic until now. Thanx.

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