The process of decentralizing government responsibilities to regional governments in Indonesia can be said to have begun with the ratification of Law (UU) no. 22 of 1999 concerning Regional Government and Law no. 25 of 1999 concerning Financial Balance between the Central and Regional Governments. In essence, these two laws transfer a number of political authorities and financial resources to the city and district levels, including in matters of urban administration, such as infrastructure development, provision of public services, and urban governance and management.

Apart from the division of government affairs, Law 22/1999 also strengthens the role of cities and local actors through its impact on regional political processes, where according to Article 34 point (2) of this Law, the election of Regional Heads after the ratification of this law is carried out by Regional People's Representative Council (DPRD), and no longer by the central government as in the pre-reform period.

The transfer of authority from the national government to regional governments in matters of development, and the election of regional heads in accordance with Law 22/1999, essentially provides space and also obligations for city governments to participate more actively in development activities, especially city development, in accordance with the spirit of democracy that underlies the reform era at that time.

Included in Law 22/1999 is the definition of various sources of regional income, such as taxes, balancing funds and regional loans, including the authority to collect regional taxes. This gives regions greater control over their financial resources, allowing regions to carry out their responsibilities in various development sectors.

Infrastructure development is another topic that dominantly appears in the 2023 NUF discussion, considering the important role of infrastructure in accelerating growth and equalizing Indonesia's economy. In general, in terms of competitiveness, Indonesia's position has tended to improve over the last five years, as can be seen from the increase in Indonesia's ranking in the 2023 World Competitiveness Ranking, where Indonesia was ranked 34th, after being ranked 40th in 2020. Especially from business efficiency and government efficiency, Indonesia's ranking in terms of competitiveness in these two areas tends to increase significantly.

However, in terms of infrastructure development, Indonesia is ranked 51st in a total of 64 countries evaluated in the 2023 World Competitiveness Ranking. Within the peer group of Asia-Pacific countries which consists of 14 countries, Indonesia is ranked 10th in 2023 under other countries. -countries such as Thailand (rank 30), Malaysia (rank 27), China (rank 21), and Singapore (rank 4). Infrastructure is still the weakest point of the four measurement areas evaluated by IMD, with Indonesia ranked 26th for basic infrastructure, 35th for technological infrastructure, 49th for scientific infrastructure, 58th for health and environmental infrastructure, and 57th for educational infrastructure. Even though it may not explain the condition of infrastructure development in detail, this ranking indicates that there is still a need to accelerate infrastructure development in Indonesia, and that there are still gaps in infrastructure in Indonesia that need to be addressed in planning future infrastructure development.

Financing infrastructure development is an issue that is often discussed in national and regional development discussions, including in the NUF. According to the 2020-2024 RPJMN, Indonesia's infrastructure spending needs reach IDR 6.445 trillion, while the government's ability to fund these needs only reaches IDR 2.385 trillion (37% of the total funding needs).