(Bloomberg) -- Indonesia expects to start building out a $25 billion industrial complex next year as the government agrees to negotiate with protesters following violent clashes.
The government expects to reach a resolution over the land conflict by February at the latest, before breaking ground on the Rempang Eco City development soon after, Luhut Panjaitan, coordinating minister of maritime affairs and investment, said late Tuesday.
The clash on Rempang shows the tension between Jokowi’s push to bring in investments to propel the country into a high-income economy and the challenge of upholding indigenous people’s land rights. The president has long been criticized for prioritizing the economy over labor and environmental rights, including when he pushed through the Job Creation omnibus law.
Rempang, a small island near Singapore, saw demonstrations over land rights culminate in violent clashes in early September that prompted the government to deploy the military. Protesters threw stones and Molotov cocktails at a state administrative office and authorities responded by firing tear gas into the crowd, causing a few people to be hospitalized, according to local media reports.
The development was paved way by a meeting between President Joko Widodo and Chinese President Xi Jinping last July, with Xinyi Group already planning an $11.5 billion glass industry complex. Rempang Eco City is set to bring in $25 billion of total investments over the next few decades.
Jokowi dismissed the conflict when speaking at a forum on Sept. 13, saying problems like Rempang shouldn’t have even reached his ears, before assembling his ministers for a closed-door meeting on Monday to discuss the conflict. Some 900 affected villagers will be offered land, houses and monetary compensation, with 300 of them already agreeing to the deal, Investment Minister Bahlil Lahadalia said after the meeting.
--With assistance from Eko Listiyorini.
©2023 Bloomberg L.P.
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