Over the last 50 years, most Asian countries have gone through a shift from subsistence agricultural systems to industrialised economies. But few have been as turbulent as Indonesia. The history of Indonesia’s land and natural resources is tied to the swings in the country’s political regime. Following intense political instability since independence, President Sukarno’s ‘Guided Democracy’ system attempted to establish a nationalist approach to protect the young nation from domination by Western countries. With the Basic Agrarian Law (BAL) 1960, foreign ownership of land was disallowed. But this too failed to achieve stability or economic growth. In 1966, General Suharto successfully staged a military coup. Under his presidency, Indonesia experienced the “New Order”. A key aspect of this regime was trade and industrial expansion, which allowed an economic growth of seven to eight percent each year. Changes were made to foreign and domestic investment laws to facilitate growth. The New Order removed most controls on private investments. By ending government subsidies and preferential access to funds for state owned banks and state owned enterprises it curtailed their activities.
This report tries to analyse how this development based on extractive, large-scale agricultural projects and industrial and infrastructure projects has impacted communities. It also looks at the efforts made by the communities in mitigating the impacts faced by them and the results of these efforts. The first section of the report provides an overview of the economic and political context and the legal framework that governs land based development in the country. The second section provides the extent of land use change followed by the section on impacts. Subsequent sections delve into strategies employed to mitigate these impacts and remedies achieved.
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