The Lagoi integrated international tourism area in Bintan regency, Riau Islands province, represents another example of cooperation between Indonesia and Singapore.

Slowly but surely, the collaboration has given birth to another Southeast Asian tourist destination, occupying an area of 23,000 hectares.

Lagoi tourism has been developed through government to government (G to G) cooperation between Indonesia and Singapore, cemented by the signing of the Memorandum of Understanding (MOU) in 1991. The development of Bintan regency into a tourist destination was intended to develop the economic potential of the region, and has been part of a massive joint venture between Singapore, Johor (Malaysia) and Riau province (Indonesia), or Sijori for short.

Group general manager of PT Bintan Resort Cakrawala, Abdul Wahab told The Jakarta Post recently that Indonesia and Singapore had been working extensively to develop the region, with the help of private companies Salim Group and Temasek Holding Company, a state-owned company (SOE) belonging to the Singaporean government.

“Indonesia and Singapore have worked together to invite foreign and local investors. One of the biggest investors is Singapore, which has developed several hotels in the area,” said Abdul, who comes from Singapore.

Several top SOEs from Singapore have invested in the area, according to Abdul.

The first resort in Lagoi, Sedona Beach Resort, started operations in early 1996, five years after the signing of the MoU, with investment from Singapore Technologie and Salim Group. Now, Sedona Beach has changed its name to Bintan Lagoon.

Former president Soeharto along with former deputy prime minister of Singapore, Lee Hsien Loong, who at the time was the Minister of Industry, officially opened Sedona Beach Resort in 1996. It was then followed by Riau Bintan Golf Course, which also has a Club Med, an investment by Keppel Land Singapore.

Then, there was Nirwana Garden Resort, developed by Sembcorp and Salim Group, and Banyan Tree and Angsana, which were developed by other Singapore-based companies.

“All the resorts first developed in the area were a joint venture with Salim Group,” explained Abdul.

Abdul Wahab added that his party acted as the master developer tasked with developing, promoting and coordinating investors investing in the area. Currently, 15 hotels, big and small, are operating, with 1,800 rooms and employ 4,000 people.

“We still have a lot of work to do to promote the area because Bintan is still a new player in international tourism,” said Abdul.

Last year, 670,000 tourists visited the area, and 500,000 people, or more than 80 percent, were international tourists. More and more domestic tourists are coming to Bintan as now more tourist attractions are operating, including Bintan Safari Park, which houses 50 species of fauna, and the new recreational park, Treasure Bay.

According to Abdul Wahab, Singapore has spent S$1 billion to develop the area. The investment was used to develop roads, clean water reservoirs, telecommunication facilities and for electrification. Investors have invested S$1.5 billion, so the total investment in the area has reached S$2.5 billion.

Three main issues

Abdul Wahab said there were three main challenges to developing the region, namely marketing, human resources and investment.

“These three issues — marketing, human resources and investment — should not be taken lightly by the governments so the region can develop further,” Abdul remarked.

He added that marketing or promotion was a big challenge. The minimal support from the government has made this challenge a burden that his company has had to bear alone.

“We have opened representative offices in major cities around the world — in Europe, in Japan and others. But, we haven’t received optimum support from the government. In some events, we did get help from the Tourism Ministry, but the result hasn’t been as we expected,” he said.

Human resources are another challenge his company has had to face. The limited number of capable and qualified workers in the region forces industry players to recruit employees from outside the Riau Islands province.

“The regional government should establish a special school to produce workers for the tourism and hospitality sectors. We have founded a tourism school in the area, but it has its limits,” Abdul explained.

He said in the next five years, from 2017 to 2022, an additional 4,000 to 5,000 hotel rooms would be built as the fruit of new investments. Five-star hotel operators, like Intercontinental, Novotel, Mandarin Merithus and The Heaven will open their business in the region. Moreover, a 104-year-old ship is being developed to become a five-star hotel. The historic ship is anchored at Bandar Bintan Telani Seaport and is being reconstructed as a hotel.

“In terms of investment, many issues related to the law in Indonesia have hindered progress. For example, we have had Free Trade Zones (FTZ), but now we also have Special Economic Zones (KEK). Such a discrepancy doesn’t bode well for investment,” said Abdul.

According to Abdul, some laws in Indonesia were unclear, which hindered foreign investment. Moreover, sometimes local regulations issued by the regency government or the town government were not fully enforced, and what was being practiced was different from what was written.

“We hope for clearer regulations in the future,” Abdul said. He added that the cooperation fostered by Indonesia and Singapore in the last 50 years had led to many benefits and major impacts.

“Indonesia is now ready to stand as tall as others,” said Abdul, who planned to spend his retirement in Bintan.

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