Land Use Policy 21 (2004) 347–355
Major issues in Indonesia’s urban land development
Department of Regional and City Planning, Institute of Technology, Bandung, Jalan Ganesha 10, Bandung 40132, Indonesia Received 13 December 2002; received in revised form 10 April 2003; accepted 24 April 2003
Abstract This article addresses issues of urban land development in Indonesia, including urban land use; ownership and transfers; land taxation; and land information systems. Until very recently, urban land-use planning in Indonesia was largely top-down in character and neglected to include the public as a stakeholder. This article argues that the role of government in urban land-use development needs to change at all levels and that the capacity of local government in land-use management needs to be strengthened. The presence of private developers in urban development should be encouraged. Land development permits—as a means of urban development control—while they may still be necessary should be granted primarily in relation to urban land-use plans (RUTR). Land taxation instruments have not been effectively applied to control land utilisation in the cities. Data and information on land affairs are lacking. r 2004 Elsevier Ltd. All rights reserved. Keywords: Urban land policy; Indonesia
Introduction This article considers several key issues relating to urban land development in Indonesia. Although several aspects of urban land policy reform in Indonesia have been examined previously (see Firman, 1998), this area needs to be revisited as the recent economic crisis and current sociopolitical situation have greatly affected urban socio-economic and physical conditions in Indonesia, including urban land use. This article aims to offer an update on the situation of urban land development in Indonesia. With a population of over 206 million people in 2003, Indonesia is one of the most highly populated countries in the world, following China, India, and the United States. Urbanisation, deﬁned as urban population proportion of the total population, is growing rapidly there. It had already reached 30 per cent and 42 per cent in 1990 and 2000, respectively, and is expected to be 50 per cent by 2010. Urbanisation has impacted signiﬁcantly on spatial development in Indonesia, notably on urban land. For this reason an urban land development policy which is able to respond to rapid urbanisation is of extreme importance to Indonesia. *Tel.: +62-22-250-4735; fax: +62-22-250-1263. E-mail address: tﬁrman@melsa.net.id (T. Firman). 0264-8377/$ - see front matter r 2004 Elsevier Ltd. All rights reserved. doi:10.1016/j.landusepol.2003.04.002
Indonesia’s Basic Agrarian Law (Undang-Undang Pokok Agraria—UUPA), promulgated in 1960, clearly states that land has both social and functional values, and is therefore not a commodity that can be traded for proﬁt. At present there are three competing attitudes towards the UUPA (Faryadi, 2002). First, there are those who consider UUPA as no longer relevant within the current political and socio-economic context. The law is considered a hindrance to effective land market functioning, and therefore there are those who think it should be eliminated. Second, there are the ‘populists’. They would like to leave the UUPA as it is, since this law is essentially intended to protect poor agrarian households. Many of the populist group consider the UUPA as ‘too soft’ to deal with the recent trend of commoditisation of land and they call for its revision (Sumardjono, 2001). Third, are those who consider that UUPA is still relevant in the current context provided it is reoriented and updated, so that it can keep up with present political and socio-economic conditions in Indonesia. The UUPA was developed with the intention of addressing issues relating to rural land; understandably it neglects urban land problems. However, since socioeconomic conditions have changed greatly, urban land...