S

outh Korean businesspeople investing in Batam say the business climate in the free trade zone is becoming unfriendly to investors, particularly with the increase in the minimum wage, resulting in a decline of their profits.

Association of Korean Businesspeople in Batam chairman Sonia Kong said in the last five years, 17 Korean companies operating in Batam had decided to cease operations and move to other countries.

She added that 23 Korean companies still operated in the city.

'€œThere are 17 companies that have decided to close and move to other countries, mostly driven by the increase in the minimum wage by 43 percent,'€ said Kong during a business gathering between the
Batam Indonesia Free Zone Authority (BIFZA) and Korean businesspeople in Batam on Tuesday.

'€œWe understand that the minimum wage is low, whereas living costs are high. We understand that the minimum wage should be increased,'€ added Kong.

'€œHowever, we expect the wage to be increased gradually, not so sudden and so high.'€

Kong added that Korean investors faced many problems when investing in Batam. However, they could not share all of their problems during the business gathering due to the time limit.

'€œWe no longer see Batam as an investment destination as it is not beneficial for investors,'€ said Kong.

However, South Korea still wants to improve cooperation with Indonesia in Batam, said Kong, with such an intention being proven by the launch of the Korea Culture Center to maintain positive relations between the two countries.

BIFZA director for goods and services traffic Tri Novianta Putra explained to Korean investors that Batam was still an interesting investment destination because of its location, close to Singapore.

Moreover, Batam was strategically located on trading routes that connected Australia, Asia, Europe and the Middle East, Tri added.

'€œThere is a '€˜Singapore effect'€™ on Batam, because the development of Singapore will impact on Batam as its neighbor. We'€™re optimistic that Batam is still an interesting investment destination,'€ said Tri.

BIFZA said a '€œone-stop team'€ should be created to look for solutions to problems faced by all businesspeople, including Koreans.

In addition, Batam Police director for vital object security, Yusri Yunus, said from January until March this year, there had been 40 labor protests in Batam caused by wage disputes, layoffs and the like.

'€œWe guarantee the safety of investment in Batam. We will punish workers who violate the law during protests,'€ said Yusri.

The gathering featured 40 South Korean businesspeople and workers who lived in Batam. Speakers included officials from the Batam Police, BIFZA, local labor organizations and the local tax and excise office.