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The basic problem with 190 years of land rights in Nusantara
By giving up land rights to investors for a colossal period of time, the state has limited its ability, as a nonprofit entity, to maximize the amount of good it can directly bring from land to people.
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This picture taken on Aug.14, 2022 shows directions at Titik Nol Nusantara (ground zero Nusantara), the future capital city for Indonesia, in Sepaku, Penajam Paser Utara, East Kalimantan. Located in eastern Borneo, the world's third-largest island, Nusantara is set to replace sinking and polluted Jakarta as Indonesia's political center by late 2024. (AFP/Adek Berry)
P
resident Joko “Jokowi” Widodo recently signed Government Regulation No. 12/2023 (PP 12/2023) as part of efforts to support the development of Indonesia's ambitious new Nusantara project.
The regulation highlights important provisions related to business licensing, investment facilities and land policy, which are expected to facilitate and improve business and investment opportunities in Nusantara.
The newly passed regulation allows investors in Nusantara to be granted land rights for a colossal period of up to 190 years, which not only appears to be excessive but is also the longest compared to the ones in Agrarian Law No. 5/1960 and its implementing regulations.
Investors who apply for Right to Cultivate (HGU) in Nusantara may enjoy 190 years of land rights, divided into two cycles. In the first cycle, investors will initially be granted a maximum of 35 years, which can be extended for another 25 years, and then renewed for another 35 years, for a total of 95 years.
In the second cycle, the government may grant a total of 95 years, similar to the above, resulting in a total of 190 years of land rights for investors.
Similar arrangements are also found in the granting of Right to Build (HGB) and Right to Use (Hak Pakai), with a total of 160 years granted through two cycles for each.
The new capital, situated in North Penajem Paser and Kutai Kartanegara regencies in East Kalimantan, will occupy a territory covering 256,142 hectares, or four times the size of the current capital city of Jakarta.
