INDONESIA—LAND TENURE AND PROPERTY RIGHTS PROFILE

The country's legal and regulatory framework governing land is flawed and in need of a comprehensive overhaul. Throughout Indonesia, the land rights of unregistered owners are insecure, women's rights to marital property are generally not registered, and registration of all rights is unnecessarily expensive. A deforestation rate of 2% per annum poses a significant ongoing threat, imposing especially high costs on traditional adat communities that depend on forest resources for their livelihood. Indonesia's legal framework fails to provide an environment conducive to investment and economic growth that would open doors of opportunity for the poor, women, and traditional communities. At least five land and natural resource property-rights issues should be addressed to increase environmental sustainability and benefit growth. These issues include ambiguities between formal and customary law, a complex and inefficient land registration system, land conversions driven by economic development, urban growth without sufficient investments in housing and urban services, and the problem of rural landlessness. The current era of decentralization of central government functions presents an opportunity to work with district governments on various land tenure and natural resource property issues. The National Land Agency (BPN) has resisted reforms, while some district governments may be more amenable to reforms that address community needs. This could also be an opportune time to engage with civil-society organizations that have an interest in agrarian, natural resource, and legal aid matters but lack technical capacity to design and promote specific legislative reforms. Donors, including USAID, could help establish the foundations for broad-based local economic development by working with district governments and civil society groups in several areas. These activities should extend land tenure and natural resource rights equally to women and men. Support for legislation that resolves ambiguities between customary and formal land laws could clarify and reduce conflict between the two. Improving land administration at the kabupaten level could eliminate or reduce fees for first-time registration of land rights, ensure women's names are included in titles, and develop processes for identifying, describing, and registering communal land rights. Strengthening forest conservation measures could build upon Indonesia's recent commitments to reduce carbon dioxide emissions and conserve forest habitats and wildlife. Encouraging development of effective urban governance and planning could promote greater stakeholder participation, including from the private sector and the poor, in urban planning. Exploring measures to expand land access could provide landless households with even fractional hectare micro-plots for producing food and raising livestock, supplementing their diets and incomes.