It might not be grandiose to
mention that KPKNL is one of the development agents at the regional level. By
function, KPKNL has an essential role in ensuring the effectiveness of government
spending, especially in terms of capital expenditures and state (financial)
claims. Moreover, KPKNL is also in charge of public auction execution due to legal
enforcement and an alternative transaction mechanism in society.
These roles indicate that we
might need to scrutinise and begin to answer whether and in what aspect the
KPKNL could alter the local economic performance. This idea is not new, but how
we evaluate, measure, and publish might provide a fresh perspective in
delineating the KPKNL position as a government institution in the region. Here,
I explore the three main areas that might become the critical point on how the
KPKNL affects the local economy: asset market demand, non-performing loan, and
institutional role model.
Asset Market Demand
KPKNL has been developing many innovations
to ensure the government assets are appropriately recorded and updated. Asset
profiling as an effort to optimise asset utilisation has also been initiated
recently. However, how the profiling helps close the asset demand is less
likely to be evaluated or implemented. This aspect might need to be elaborated to
show how asset utilisation fulfils the physical asset market demand.
To do so, firstly, we should clarify
how much the demand is. The need for physical state assets could be from the central
government, local institutions, or society. If we can compare the need, the
asset profiling, and the gap, it might be a chance for KPKNL to exemplify how
the KPKNL participate in stimulating the asset market. Besides that, the need
for the physical asset is not only limited to economic orientation; it also
includes the social demand, such as the alteration of Wisma Atlet utilisation
as a quarantine place and hospital or the other government building that turns
to health facilities during pandemic COVID-19. Both scopes (economic and social
demand) might be less exposed using the KPKNL perspective.
Non-Performing Loan
The role of the KPKNL auction in
reducing the non-performing loan in the banking sector is undoubtedly valid.
However, we might rarely evaluate it in performance meetings or show it in
public communication. In doing so, firstly, we probably should expose how
dominant the auction request from the banking sector is. Then, it is followed
by exhibiting the performance of the auction from the banking sector. If we can
convincingly show the data on how the auction mechanism has been succeeding in selling
the collateral of bad debt, we could claim the role of KPKNL in contributing to
non-performing loan alleviation and encourage the healthy environment of the credit
system in the banking sector.
Institutional Role Model
Since 2016, the Central Government
Financial Statement obtained an unqualified opinion from BPK. One of the reasons for this achievement is the
significant enhancement in state asset management, especially in accounting
standard implementation. Besides that, the Ministry of Finance has become the
role model in the merit system and bureaucratic reform. These accomplishments should
be expanded to local government via the regional branch of the Ministry of
Financial, such as KPKNL. Some years ago, many KPKNL provided an assistant to re-value
the asset of the local government. Unfortunately, this effort was not thoroughly
followed by the support for the local asset management.
Moreover, some KPKNL has also been
recognised as the unit with integrity and no corruption predicate (Zona
Integritas Wilayah Bebas Korupsi). Therefore, these experiences might be a
foundation for becoming the institutional role model and creating a positive spillover
in building good governance in the local government. Why does local governance
matter? Many studies showed that institutional governance at the local level
has a crucial role in affecting local economic outcomes, for example, through decreased
transactional cost and increased investment.
Author: Andar Ristabet Hesda (KPKNL Surakarta)
Photo: @fikrirasyid