Land for investors<\/p>\n
In Indonesia, with a land area of almost two million square
\nkilometers, land is supposed to be one of the cheapest factors of
\nproduction. In reality, though, land transactions have been so
\ncomplex and risky that investors often consider land acquisition
\none of the biggest difficulties they usually face in establishing
\nbusinesses. The government, therefore, has promoted the concept
\nof industrial estates, where investors can easily buy developed
\nindustrial lots for their projects or lease standard factory
\nbuildings from estate developers.<\/p>\n
Industrial estates have been designed to make things much
\neasier for investors because estate developers are authorized by
\nthe government to handle, on behalf of the investors, all the
\npermits needed for industrial plant establishment. However, the
\nrealization of the concept has not been as smooth as it seems to
\nbe on paper.<\/p>\n
A recent study by the National Land Agency and the ministers
\nof industry and trade and investment development found that
\ndevelopers had been able to acquire only around 17,995 of the
\n53,000 hectares of land they have been allocated for developing
\nindustrial estates. Of the acquired land, only 6,370 ha have been
\ndeveloped into industrial plots ready to accommodate industrial
\nplants.<\/p>\n
The survey concluded that many investors still preferred to
\nestablish their plants outside industrial estates, because they
\nconsidered the land prices charged by developers much higher than
\nthose outside the estates. Many industrial estates have also
\npassed on the capital costs of basic infrastructures to
\ninvestors. Several industrial estates have apparently been
\ndeveloped like isolated islands, without access roads.<\/p>\n
These problems should not, however, be blamed only on
\nunprofessional developers. For one thing, the absence of an
\norganized land market in the country has long been identified as
\none of the major sources of the difficulties in land acquisition.
\nThe government seems to have been very slow in addressing that
\nproblem. An efficient land market requires a reliable land
\nregistry and a transparent information system, but these two
\ncrucial factors are still in the early stages of development.<\/p>\n
Adding to the complexity of land transactions are the numerous
\nregulations, both at the central and local government levels,
\nwhich govern land titles and administration, along with the large
\nnumber of different government institutions involved in land
\nadministration and management. A study by the World Bank last
\nyear identified almost 2,000 land-related laws and regulations<\/p>\n
It is no wonder that land transactions, besides being very
\ncomplex, arduous and time-consuming, often set off conflicts with
\nland owners, especially in the absence of clear rules on the
\nresettlement of the people whose land is acquired for industrial
\nprojects. Land disputes also often arise because of the vagueness
\nof the legal framework on the recognition of traditional property
\nrights.<\/p>\n
Because the demand for commercial land in the cities and areas
\naround urban centers will continue to increase and its prices
\nwill consequently rise steadily and sometimes astronomically,
\nland problems and disputes could worsen to become a potential
\nsource of major conflicts.<\/p>\n
The planned establishment of an inter-ministerial team by the
\nNational Land Agency to look into the problems of land
\ntransactions could be a small, yet good start towards solving the
\ncomplex and often delicate issues of land acquisition. But
\nwhatever might be the findings of the study team, any efforts to
\nsolve the problems should not be of an ad hoc nature or case by
\ncase basis, but should focus on the development of an efficient
\nland titling and registration system. Only with such an efficient
\nand transparent system can the government set up a one-stop
\npermit system for all matters related to land and enforce
\nadequate protection of property rights.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/land-for-investors-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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