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