The transmigration programme in Indonesia is now acknowledged to be the largest voluntary land settlement scheme in the world. The programme began as an attempt to correct the population imbalance between Java and the Outer Islands. Since the inception of the programme under the Dutch in 1904 through mid-1986 over 4 million people have moved. Major emphasis in the programme has turned to regional development in the Outer Islands. Despite considerable success the programme has been plagued by numerous problems. These include inadequate income levels, improper site selection, poor matching of settlement models to the specific sites, environmental deterioration, migrant adjustment, land conflicts and financing. Several of these problems have been caused as a result of the attempt to reach unrealistic settlement targets. Given current budget constraints efforts now focus on the improvement of existing settlements and the encouragement of spontaneous or swakarsa migration. A secondary phase of the transmigration programme involves the development of other settlement models. One attempt involves the experiment with small enterprises some of which involve the private sector. The future success of both new and existing settlements hinges on the development of off-farm employment. In this sense, small industries and opportunities in the service sector of the settlement themselves and nearby small towns are critical. The exploration of a new basis for employment must be carried out in concert with the National Urban Development Strategy (NUDS) which identifies the functional potential of small and intermediate-sized towns in the Outer Islands. © 1989.

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