A dream denied? Mining legislation and the Constitution in Indonesia

Kosim Gandataruna and Kirsty Haymon

Bulletin of Indonesian Economic Studies, 2011, vol. 47, issue 2, 221-231

Abstract: Indonesia is blessed with a wealth of natural resources. After wresting power from the Dutch, the leaders of the new republic adopted a constitution that required this national wealth to 'be controlled and utilised by the State for maximum prosperity of the people'. The dream of turning the country's abundant natural resources into a catalyst for socio-economic development was not pursued actively until 1967, when Soeharto's incoming New Order government introduced policies that supported a significant expansion of the mining industry. The combined effect of the Asian financial crisis and domestic political unrest in 1997-98 interrupted this process. It was anticipated that the introduction of a new mining law in 2009 would re-invigorate the sector. Based on an analysis of five significant elements of the new legislation, this article finds it is unlikely to result in a mining industry that provides maximum benefit to the Indonesian people.

Date: 2011
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DOI: 10.1080/00074918.2011.585951

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