Indonesia wants to re-position its Batam island as an alternative shipping and manufacturing hub to Singapore with a potential to draw $60 billion in new investment.
Batam and nearby islands -- located at less than 30 kilometers south of Singapore -- have attracted about $20 billion dollars of investment since the government began promoting them as industrial area in the 1970s. The region, declared a free-trade zone in 2007, is home to thousands of local and foreign firms producing goods from computers to oil rigs.
Inconsistent policies resulting from the leadership dualism in Batam have been blamed for the decline in economic growth. Batam Deputy Mayor Amsakar said changes in government policies and the dualism had been the cause of the region’s downward trend in economic growth since 2013.
Currently, BP Batam has the authority to issue 62 investment licenses, while the Batam administration 155 licenses. BP Batam chief Edi said Batam’s geopotential should push the government to turn the region into the gateway of Indonesia’s investment services.
“Batam has been developed into an industrial area since 1971 for its geographical nature, so we have the responsibility to continue the development,” Edi said, referring to the island’s proximity to Singapore as quoted by Bloomberg.
Edi expressed hope that investors would put their trust in the services as a channel to overcome the hurdles they often faced in obtaining business permits.
Batam’s public service is mall is among 500 in the country, managed by city and regency administrations.
The services aim to help improve the country’s investment climate, as difficulties in obtaining permits have often discouraged people from opening businesses, according to a survey conducted by a joint National Development Planning Board-Canadian program.