This land isn’t your land in Indonesia

The scion of an elite family whose wealth puts Indonesian leader Joko Widodo’s modest holdings in the shade, presidential hopeful Prabowo Subianto took a surprise shot when he raised the sensitive issue of state land ownership during a nationally televised presidential debate.

Seeking to burnish his nationalist credentials, Prabowo took the offensive in the February 17 debate by questioning the president’s policy of handing out land certificates to farmers, arguing that the Constitution’s Article 33 infers that the state owns all natural resources.

Without missing a beat, Widodo sprung an ambush on the retired general, noting that Prabowo “owns” 220,000 hectares of land in East Kalimantan, where he operates a paper pulp and plantation company, and another 120,000 ha planted in rubber and other crops in Central Aceh.

But more important than the president’s retort was the way the exchange opened a conversation that Indonesia has never really had about the complicated issue of land ownership, which is responsible for more social conflicts than anything else across the sprawling archipelago.

State control is also becoming an overall point of contention with Indonesia’s private sector, given the state’s perceived regulatory overreach in many sectors of the economy and the way Widodo’s government has favored state-owned enterprises for much of its vast infrastructure-building program.

According to an official 2003 State Secretariat English language translation, section 3 of Article 33 states that “the land, waters and natural wealth contained within them shall be under the powers of the state and shall be used to the greatest benefit of the people.”

Where the controversy and debate arise is the Indonesian word dikuasai, which depending on the interpretation can mean anything from regulate to ownership. In the mid-1990s, president Suharto sought to establish the principle that as long as the government could control the use of land, it met the criteria laid down in the Constitution.

Over the past decade, however, the popularly accepted interpretation has increasingly leaned towards “own”— even though that specific word in Bahasa Indonesia is milik. The word has an emotive pull for many Indonesians and can serve as a powerful political tool depending on the way it is used.

Indeed, that is what lies at the heart of the government’s costly program of buying back or securing equity control over major mining and energy assets, such as Freeport’s copper and gold mine in Papua and Kalimantan’s Mahakam gas field previously operated by French firm Total.

“The span of interpretation goes from that which would be recognized in most countries, where the state ensures the proper use and regulation of resources, to North Korea where the state literally owns it all,” says one analyst.

Prabowo opened a new front in the debate about poverty and equality, noting that “1% of the population owns 50% of our wealth.” Although offering no specific suggestions on how to correct the imbalance, he made it clear that state ownership of resources was an important factor.

Analysts note that socio-economic equality has become a common theme of Prabowo’s campaign and also reflects part of the agenda of the so-called 212 Movement, the conservative Muslim lobby whose mass protests in 2016-2017 led to the downfall of Christian-Chinese Jakarta governor Basuki Purnama.

Some commentators see the inequality issue as a not-so-subtle dig at the control Sino-Indonesian corporations exercise over business and large parts of the economy, a provocative sentiment that never lies far below the surface in Indonesia.

Widodo’s biting reference to Prabowo as part of the landed gentry, at a point in the debate where the candidate was attacking the rich, may have been seen as a low blow by his supporters. But it was clearly aimed at showing up Prabowo as a hypocrite on wealth distribution issues.

“The 2.6 million hectares in handouts are to transform the land into productive assets. We are not handing it out to major companies,” the president remarked pointedly about his land policy. “I want to note that these kind of handouts are not practiced under my administration.”

Widodo said establishing legal title was necessary to allow farmers access to financing and was one of the keys to an agrarian reform program that is eventually aimed at redistributing 12.7 million hectares to small land-holders across the archipelago.

Prabowo conceded he has cultivation rights over the land in Kalimantan and Aceh, but said he was willing to hand it back to the state. “Instead of foreigners getting control of the land, it is better that I manage it because I am an Indonesian, a nationalist and a patriot,” he said.

Foreigners cannot legally own land in Indonesia and those who have sought to circumvent the law by using an Indonesian nominee, particularly on the tourist island of Bali, have found to their detriment that such holding structures do not stand up in Indonesian courts.

Like Indonesians, foreign investors can secure a so-called hak guna bangunan through a limited liability company, established under domestic law and domiciled in Indonesia, which gives them the right to build and possess a structure on state or privately owned land.

Additionally, foreign business interests can also obtain a hak guna usaha, the title Prabowo actually holds in East Kalimantan, allowing them to cultivate state land for agriculture and farming enterprises for 25 years, extendable by another 35 years.

Only Indonesians, however, are entitled to a hak milik, the most complete form of land ownership, though it is subject to zoning regulations, to the extent they are enforced in Indonesia, and does not entitle the owner to exploit natural resources found on or under the land.

According to Indonesian specialist Kevin Evans, director of the Australia-Indonesian Centre, the controversy around Article 33 has a long rich history, harking back to the constitutional debates of the 1950s when supporters of Pancasila, the state ideology, and Islam were in competition to determine the future shape of the republic.

Lost in those discussions was a third socio-economic vision, rooted in prioritizing a statist view of Article 33 and promoted by a tiny coalition comprising the nationalist-communist Murba party, the Labour Party of Indonesia and a small communist party from West Java.

It is that vision, Evans argues, that has now become the mainstream and which Prabowo is articulating, even if his social stature and business interests would appear to make him an unlikely champion.