Forest Politics in Indonesia Drivers of Deforestation and Dispossession

This report discusses the political dynamics shaping natural resource management in Indonesia. Synthesizing a wide range of studies on the competitive struggle over control of land, timber and other natural resources in Indonesia’s forest zones, the report provides an accessible guide to the practices and incentives generated by Indonesia’s ‘forest politics’, and offers broad guidelines on how to design interventions that better engage with how the sector really operates. The report shows that informal clientelistic exchange relations between political, bureaucratic and economic actors – involving exchanges of favours of mutual benefit - are a pervasive feature of governance in Indonesia, and explains how they undermine natural resource and forest governance.
It has often been observed that initiatives to strengthen governance and foster sustainable development in Indonesia’s forestry sector have limited long-term effects. The limited impact of such reforms stem, we argue in this report, not just from features of Indonesia’s land tenure system or technical failures, but also from a core problem: the nature of Indonesia’s political economy. Initiatives in the forest sector that aim to improve natural resource governance and foster sustainable development rely on actors – bureaucrats, politicians and businesses – who face strong incentives to act in ways that run counter to such aims. Reform initiatives tend to focus on producing legal and policy changes in a context where many powerful actors have individual and collective interests in resisting
implementation of laws and policies which, as a result, are often only tangentially relevant to how lands and forest resources are actually allocated and exploited. Instead, what happens on the ground is dictated by deeply embedded practices and relationships that occur outside of and often in defiance of the law. Most forest-related reform programmes proceed from a legal-bureaucratic mindset that assumes that for every problem there is a legal fix, and are either blind to the incentive structures that guide action on the ground, or proceed with the hopeful assumption that their lofty goals will convince local partners to mend their ways. This approach generally leads to disappointments.
The pressing challenges facing Indonesia’s forest sector – deforestation, fires, human rights violations, social conflict, biodiversity loss, climate change – call for a different approach. The incentives generated by key features of Indonesia’s political economy, such as the collusive nature of business-politics interactions, have long been noted by scholars and other observers of Indonesia’s forest politics, but they have rarely been integrated into cohesive analysis or taken seriously by policy-makers and donors as a foundation for policy interventions. The challenge of fostering sustainable development requires facing up to the fact that officials and other stakeholders face strong pressures to circumvent policies and engage in under-the-table deals that undermine implementation of laws and regulations. It requires grappling with the daunting task of working toward systemic reform.