Batam, From the Free Trade Zone and Free Port of Being a Special Economic Zone


BATAM, 14 MARCH 2016 – “We want a thorough settlement of about Batam. Many countries learn from Batam, Batam they managed but instead missed, “Coordinating Minister for Economic Affairs Nasution. On this day, Monday (14/3), the government to socialize the development of Batam Island neighborhood. The steps taken by the government is doing transformation on Batam, which is now a free trade zone and free port, will be converted into Special Economic Zones (SEZ).
Keep in mind, the President has set a Presidential Decree (Decree) No. 8 of 2016 on the Zone Council MOOPS Feberuari Batam on November 29, 2016. In the decree, among others, stated that the determination of the Council Region Establishment MOOPS Batam chaired by the Coordinating Minister for Economic Affairs (also a member) with members: the Minister of Interior, Minister of Justice and Human Rights, the Minister of Finance, Minister of Trade, Minister of Agricultural and Spatial Planning / Head of National Land Agency, Commander of the Indonesian Armed Forces, Chief of the Indonesian National Police, the Cabinet Secretary, Riau Islands Governor, Mayor Batam, and Chairman of the DPRD Riau Islands Province.
The birth of this decree also simultaneously repeal Presidential Decree No. 18 Year 2013 regarding the establishment of the Council Region MOOPS Batam. The transformation of Batam necessary because in fact, the problem in Batam has accumulated a long and protracted. “Therefore, the completion of the pattern of business as usual will not be able to improve the competitiveness of Batam as a center of economy who’ve excelled in the region,” Nasution said.

Batam declining competitiveness
As is known, externally, there has been a decline in competitiveness in the region. The concept of a free trade area or FreeTrade Zone (FTZ) has been abandoned by the countries in the East Asia region and Southeast Asia. Along with globalization and the development of inter-state cooperation in the region, the regional tendency now is to develop the SEZ (Special Economic Zone) or, for more specific trade interests, develop the EPZ (Export Processing Zone) or Bonded Logistic Center. Other countries that had once learned from Batam, this time it grows better. Take for example the Iskandar Regional Development Authority (IRDA) in Malaysia, which was established in late 2006, already far left Batam which has been established since more than 40 years ago. Alternatively, a special economic zone of Shenzhen in China which accounted for 75% of revenue Shenzen region amounted to US $ 114.5 billion and the per capita income of US $ 13.200.
As internally, a decline in competitiveness due to several things, ranging from the duality of governance in the region between the city authorities and the Management Board (BP) Batam, vertical dualism responsibility BP Batam to Zone Council and the Minister of Finance, to the population explosion smuggling. Dualism management of the region led to Batam uncompetitive because of licensing becomes sluggish, overlapping land management, legal certainty for investors by providing infrastructure which do not meet international standards.
Socialization Batam island area development is done today encompasses three stages. The first phase, from morning until noon, the government to disseminate the elements of regional governments. The second phase, from noon until late afternoon, socializing with elements of business and area managers. And the third stage, at night, to be disseminated to investors.
Changes into Batam SEZ will be through a transition phase. This transition phase, which will be replacing the board of the old Batam Management Agency. After that, the new board will perform asset identification, management cooperation with investors, improvement of roles and responsibilities with the Batam administration, as well as to prepare for future regional development strategies. All of this transition process is expected to be completed in 3-6 months.

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