JP/5/RULI

JP/5/RULI

Squatters a threat to investment climate in Batam

Fadli
Batam

The rapid population growth in Batam has caused the number of
temporary houses occupied by squatters to reach 40,000 units.

Based on data from the Batam Industrial Development Authority
(BIDA) in 2002, the city's population was 247,588 in 1996, but
that figure doubled to 533,521 in 2002.

Similarly, the workforce in Batam also surged steadily. The
employment figure in the city stood at 126,311 in 1996, but,
reached 172,709 in 2002.

The increasing population and workforce have created problems
for the city administration, particularly regarding the number of
temporary houses that have been erected due to the high demand
for housing.

The government has often tried to evict the squatters but met
with stiff resistance. The squatters argue that the government
has offered them very little compensation. Clashes between the
squatters and city officials have been frequent. The latest
incident occurred two weeks ago in Lubuk Baja subdistrict here,
in which two people were shot and seven others allegedly beaten
by police personnel. Several cars were burned in the incident.

A political science lecturer at Pekanbaru's Riau University
(UNRI), Muchid Al Bintani, said that the problem dated back to
1974 when the central government declared Batam a bonded zone.
Muchid criticized the government for the ambiguity of its
declaration.

"The government did not anticipate the influx of migrants to
Batam, who entered Batam without acquiring any skills. They
turned out to be jobless -- vagrants or scavengers -- who were
not supposed to live in a bonded zone," he said.

According to him, Ministry of Home Affairs Regulation No.
43/1977, on land management and usage in industrial areas in
Batam, and National Land Agency Regulation No. 9-VII-1993 on land
management and allocation in Batam have negative implications for
investors.

"Investors would contact the BIDA, if they were interested in
a particular plot of land owned by the city administration.
Problems would arise, however, if people were squatting on that
land. Compensation must be paid -- the administration previously
offered low compensation, and there were riots. Land allocation
arrangements should be stricter and compensation should be
appropriate," said Muchid.

Investors should be provided with favorable options, not the
squatters, he said.

Batam authority spokesman Dwi Djoko Wiwoho said that efforts
to control squatter areas had been initiated through preventive
measures. Batam municipality had introduced a bylaw whereby
anyone who arrives in Batam must state a clear purpose, a
guarantor and place of stay.

Also, several low-cost apartments that can accommodate
thousands of people have been built in three areas -- Batu Ampar,
Sekupang and Muka Kuning.

Muchid said that the administration had prioritized the
problem of squatters living in Batam.

The rapid migration to Batam, compared to other areas of
Indonesia, is not on a par with its area of only 415 square
kilometers or only about 41,500 hectares. This is reflected by
the high price of real estate and rental properties.

A 27/60 (a 27 square meter house with 60 square meters of
land) Ordinary House (RS) in Batam sells for Rp 40 million
(US$4,700).

The high price of real estate is also evident in the cost of
renting a room in a boarding house in Batam, of between Rp
200,000 to Rp 500,000 per month.

Population in Batam 1996 to 2002
=================================================================
1996 247,588
1997 254,745
1998 266,428
1999 358,700
2000 462,528
2001 527,151
2002 533,521
=================================================================
Source: Batam Industrial Development Authority

Employment figure in Batam 1996 to 2002
=================================================================
1996 126,311
1997 135,858
1998 139,986
1999 148,247
2000 155,591
2001 161,648
2002 172,709
=================================================================
Source: Batam Industrial Development Authority