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Indonesia: Economic Benefits and the Transmigration Program
Country Study > Chapter 3 > The Economy > Agriculture > Economic Benefits and the Transmigration Program


A study by economist Chris Manning pointed to several trends that helped to spread the benefits of economic growth throughout the rural population in the 1970s and 1980s. The demand for agricultural workers declined less dramatically than that in other nations during similar technological changes, even as the supply of agricultural labor in more densely populated areas was reduced by the central government's Transmigration Program. Rice production was increased in part by expanding irrigation, which permitted more frequent rice crops per year. More frequent crops in turn required more labor to seed and harvest. With tiny Javanese rice plots rendering mechanical techniques such as handheld tractors impractical, mechanization did not rapidly replace farm laborers. Improvements in transportation and general economic growth permitted poorer rural households to migrate to urban areas in offpeak seasons, where these workers often labored in the informal sector for higher wages than offpeak farm employment could offer. In 1985 BPS surveys indicated that 36 percent of rural households earned a major share of income from nonagricultural work, and more than 50 percent of rural households reported some income from work outside agriculture. Other evidence suggested an increasing share of this income came from urban-based employment.

Nevertheless, poverty in Indonesia remained largely a rural problem. In the late 1980s, 35 percent of the rural population on Java lived below the poverty line, compared with 25 percent in rural areas in the Outer Islands and only 8 percent in urban areas. The most innovative and controversial government response to these conditions was an extensive Transmigration Program that financed the relocation of poor rural families from Java, Madura, and Bali to locations primarily on Sumatra, but also to Kalimantan, Sulawesi, and Irian Jaya. The sponsored migrants were required to be married, of good character, and to have farming experience. Migrant families received a small house and about one hectare of rain-fed cropland. A village center with public facilities such as schools and health clinics was provided by the government. Most settlements engaged in food cultivation and were expected to be self-sufficient at the end of five years; some migrants participated in the Nucleus Estate Programs.

During Repelita I through III, FY 1969-83, almost 500,000 families had been moved under officially sponsored programs. An ambitious expansion to 400,000 sponsored families and an additional 350,000 unsponsored migrants was targeted during Repelita IV. Because of severe budget cutbacks beginning in FY 1986, only around 230,000 families were successfully sponsored during Repelita IV. Repelita V targets were substantially lower; in FY 1989, only about 10,000 of a targeted 27,000 households were resettled. However, spontaneous migration without government assistance continued to be significant. The 1980 population census showed that the population of spontaneous migrants in Outer Island rural areas was more than twice that of sponsored migrants, although it is likely that spontaneous migration was facilitated by the government-sponsored programs. The problems confronted by the government Transmigration Program included land disputes with the local population and environmental concerns over the suitability of land for settled agriculture.

Data as of November 1992

Last Updated: November 1992

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Indonesia was first published in 1993. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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Section 98 of 210


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