May 22, 2006

Beyond land security: private or communal right?

Land tenure security becomes major importance in developing worlds. I choose this issue in the context of Indonesia that the country is well known of land and natural resources abundant. Those resources become invaluable if the policy makers fail addressing the potential of the resources especially land resource. The importance of this issue suggests that land must be secure enough in order to allow the owner to invest in their land and participate in the market as further result improved economic growth. Realizing the important of such issue, the parliament has already passed a decree regarding to agrarian reform and natural resource management in 2001.



Land ownership is diverse across Indonesia because of the cultural difference of the people who living in different islands and even characterized by language diversity. Those systems are resulted in different ways to access land in the society. Some are likely to have private ownership and the others are communal ownership and the combination between the two also exists resulting a variation of land holding and ownership. For instance in communal societies outside Java Island, land was acquired by occupying area hence they claimed it as communal possession. They based the ownership on genealogical or on territorial relationships formalized by unwritten law[2]. Some problems took place as a result of land tenure insecurity. Different type of land ownership has escalated conflicts between local people and other parties. They are basing their claim on different level of ownership for instance local people insisted for their communal right whereas the company approved by the government perceived land as state property.

The debate mainly related to who should entitled land ownership? For some communities, giving it totally to individual will ignore the historical and traditional value. On the other hand, informal right such as communal right is not suitable for market economy, which needs security in terms of property right to ensure the holders are willing to invest in the long term. The further debate deals with the transformation of right by abolishing communal right into individual right. Is it suitable and morally acceptable? About land registration and administration, the main problem is the lack of land based information system intensified by only small part of the land in Indonesian territory has been registered. World Bank (2005) found that 17 million parcels of land have been registered leaving the other 63 million parcels are lack of legal protection.

In addition to that institution capability is still in question to conduct such registration and land administration. A range of possible policy responses has been identified as follows: · Government should design system of land ownership in order to foster investment and market economy · Government should ensure that land be available for all people · Government centrally controls and manages the land under state property rightFrom those responses, the first response is going to be assessed in this paper. The reason of choosing this response that it is important for the people under uncertainty circumstances to get land ownership. The fact that the variety of land tenure system in Indonesian is obvious, it generates insecurity in terms of ambiguity of land right, high transaction cost and difficulties to place land in the market economy.

It is widely accepted that by giving right to individual therefore it makes the owner to invest in the land or at least manage them in order not to be degraded. Not doing so may increase the cost such as maintenance costs. Therefore to maximize benefit, the owner had better doing investment on the land. In the long run, individual right provide more security to the owner. From government side, land registration potentially increases tax revenue. Only by securing land ownership, government can collect land tax. Land also plays a role as critical safety net in crisis time. It means that land ownership gives the opportunity to the owner instead keeping it as dead capital; he can sell the land during crisis time. It is argued that credit market will work after property right is secure enough however it is not always the case. Informal credit market as oppose to formal credit market that is bank and formal financial institutions may exist and provide credit to the people. One of them is moneylenders that sometimes operate based on a trust between them and the borrowers.

Besides that, people could use other form of property such as motorbike as collateral while not having land. In addition to that, some counter argument for this policy proposal. First, there is a tendency to land polarization since market made it possible for transferring land easily. As a result, land might concentrated in the hand of people who have ability to buy more and more of it. Second, securing property is one condition to foster investment however land investment simply doesn’t happen since information is asymmetric among the owner, the user and the market.

Third, having no paper proof is a big problem but having it also doesn’t solve the problem of land insecurity. There is a case when the same plot has two or more land certificate.
Fourth, in order to make land available for individual in communal society, land need to be divided among member of society. This would escalate conflict within community. Then the opposing policy response would allow the existing land tenure system to develop with government as facilitator. By this, government should acknowledge and accommodate communal land right into national land system. As previously discussed, individual land registration ignores the existing communal system and attempt to abolish them however the latter proposal suggest that giving acknowledgement to communal land also improve land security. The position of communal system is often weak when it has to negotiate with external parties. Many cases that local people are ignored from decision making process because their right over land is not recognized. There is a risk by local people when the right is not acknowledged they may be expelled from their land.

The limitation of this process when particular society has been partly even wholly integrated into modern world, thus the system becomes under crisis. It may not in favor but should the people decide what is the best for them either using the system or not. This choice is also valid for those who want to keep using communal system as basis for land management. To summarize the whole set arguments presented above; I would reject the claims that land registration makes the market work and foster investment. Ownership dimension is not about relation between individual and the things that is land but it is a social relation (Sayer, 1995:146). This implied that the way in which relationship is formed have a consequence on land ownership. By owning the land, ones can have power but the others become powerless. Besides market is not a neutral idea; it carries individualist and self-interest value. The value may deteriorate collective value owned by communal society. I propose communal land should be entitled and acknowledge by the state. Past experiences has been shown that indigenous people were easily expelled from the land because their rights were unnoticed. McCarthy (2000) found that state allocation of forest concession often overlapping with pre-existing land tenure hold by community surrounding forest. Not surprisingly conflicts were took place between people and the companies. Therefore government’ acknowledgement is important. In addition to that, the capacity of communal society needs to be improved. This can be done by identifying and mapping the border of communal land with assistance of NGO. These map should be approved and accommodated into national map, spatial planning and land use planning map (Evers 2006:6). Moreover, government needs to develop legal framework that recognizes and protects communal land including dispute settlement when conflict over it take place. -=((o))=-

[2] http://tanahkoe.tripod.com/bhumiku/id3.html accessed on 13 April 2006 at 22.35 pm

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