TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Batam shines brightly as alluring investment destination
Change Size
(Courtesy of BP Batam)
B
atam, the largest city in Indonesia’s Riau Islands province, has become an increasingly attractive global investment destination, with Germany ranking in the top five in foreign investment.
According to the Investment Activity Report (LKPM) in the first quarter of 2021, Germany was in the top position with an investment value of US$69.4 million, followed by Singapore with $38.5 million, Japan with $22.7 million, and France with $19.9 million.
Germany, for the first time ever, ranked on top, replacing Singapore, which had been at the top for many years in terms of investment value and number of projects, said Muhammad Rudi, the Chairman of the Batam Indonesia Free Trade Zone Authority (Badan Pengusahaan Batam, BP Batam).
These figures, he said, showed that Batam had been recognized by investors from Europe as a competitive investment destination in Indonesia.
Batam, strategically located close to Singapore, was granted free trade zone (FTZ) status several years ago and has been granted a special economic zone (SEZ) recently, making it highly appealing as an investment destination.
Recognized as one of the world’s top investment destinations, Batam withstood the economic crises that occurred in 1998 and 2008, which caused global economic woe. Despite the economic crisis, Batam recorded growth of 3.08 percent in 1998 and 7.18 percent in 2008.
Looking back, Batam was initially only an empty and uninhabited forest with unfertile soil that contained a certain level of bauxite surrounded by sea.
The first inhabitants of Batam were Orang Laut (Sea People), who were the Malays in 231 AD.
The development of Batam began in the late 60s and early 70s during the era of late president Soeharto, with an initial goal of ‘copying’ Singapore. BP Batam was led by late president BJ Habibie, who was also the Research and Technology Minister.
Batam's charm as an industrial city began to attract investors from different countries in Asia, Europe and America in the early 90s. This was evidenced by total realized foreign investment reaching US$1.2 billion, with Singapore, Japan and Switzerland becoming the three largest investing countries from the early 1990s to 2000, according to the BKPM.
In 2020, Batam's industry was dominated by machinery, electronics, medical instruments, electrical equipment, optics and clocks in the first position with an investment value of $285.2 million. This was in line with the vision and mission of BJ Habibie, one of the initiators of Batam’s development, that the area should be developed into a high-tech industry, with the hope that the transfer of technology from developed countries could bring investment to Batam and turn Batam city into the most advanced city in Indonesia in terms of the investment climate.
Statistics Indonesia (BPS) reported that non-oil and gas exports in the first quarter were US$2.31 billion, an increase of 6.68 percent from the corresponding period in 2020, which stood at $2.16 billion.
Batam’s main export destination countries are Singapore, with $1.07 billion, the United States with $492 million and China with $193 million. “This is an extraordinary achievement given that the COVID-19 pandemic, which has hit the world, has not yet ended,” Muhammad Rudi said.
Looking ahead, BP Batam will always support efforts to realize the vision of developing Batam into a world-class investment city, both in building infrastructure and in supplying competitive human resources, so that BP Batam will not only contribute to the people of Batam but also to the Republic of Indonesia, said Muhammad Rudi.
