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Problems hamper govt’s plan to change Batam’s status
The government has tried to resolve several problems, which have hampered its plan to change the status of Batam to a special economic zone from a free trade zone.
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Deep in discussion – Coordinating Economic Minister Darmin Nasution (right) talks with Finance Deputy Minister Mardiasmo (left) during a hearing at the House of Representatives in Jakarta on Oct. 3. (Antara/Puspa Perwitasari)
T
he government has tried to resolve several problems, which have hampered its plan to change the status of Batam to a special economic zone from a free trade zone.
The problems currently hindering the plan, initiated by President Joko “Jokowi” Widodo in January, appeared during a hearing between Coordinating Economic Minister Darmin Nasution and Regional Representatives Council (DPD) members in Jakarta on Friday. Local authorities and business community members attended the meeting.
The problems identified include ongoing administration conflicts between local governments and Batam authorities and uncertainties about land allocation for investors.
Batam's business players said potential investors were facing difficulties in finding land for their factories due to long bureaucratic procedures required to acquire land.
“Investors need to obtain 34 permits before they can get land for industrial areas,” an executive of the Batam office of the Association of the Indonesian Employers (Apindo) told the hearing.
Batam and nearby islands in Riau Islands are currently governed by the Batam administration. However, certain aspects of the economy, including those related to investment, are handled by the Batam Free Trade Zone Authority. The presence of these two institutions has caused confusion for investors because their activities often overlap.
With a new status as a special economic zone, investors in Batam would receive a wider range of tax facilities. At present, investors only get import tax exemptions
In a meeting, the business players asked the government to assign only one institution to manage the economic zone in order to reduce uncertainties for investing in the island.
In response, Darmin promised to solve the problem so that the government’s plan to change the status of Batam to a special economic zone could soon be realized. However, he could not set a specific date for when that would be. (ebf)
