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Batam pledges to boost business performance by opening Special Economic Zones
The Batam Development Authority (BP Batam) has marked a new era in its attempt to accelerate the region’s business activities.
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President Director of Lion Group Edward Sirait and Head of BP Batam Muhammad Rudi. (Courtesy of BP Batam)
T
he Batam Development Authority (BP Batam) has marked a new era in its attempt to accelerate the region’s business activities. Two government regulations were issued and presented directly before all Batam stakeholders by Coordinating Economic Minister Airlangga Hartarto on June 12 as a form of major support from the central government for the region development.
The two regulations, namely Government Regulation No. 67/2021 on the Batam Aero Technic Special Economic Zone (BAT-SEZ) and Government Regulation No. 68/ 2021 on the Nongsa Digital Park Special Economic Zone (Nongsa-SEZ), were tailored to prepare the region to be a larger stage for new economic development.
The BAT-SEZ was the country’s first SEZ earmarked for maintenance, repair and overhaul (MRO) activities. It has absorbed 2,000 workers and aims to recruit 9,976 workers by the year 2030. Lion Air Group’s subsidiary PT Batam Teknik, MRO provider for Lion Air Group airplanes was established and runs its operations there.
The government has planned to invest 6.2 trillion rupiah until 2030 in the BAT SEZ and build various supporting facilities for the MRO industry and other business lines such as production and processing, logistics and distribution, research, digital economy and technology development.
The Nongsa-SEZ is already established as a leading creative industry and is expected to become the entry point for international IT companies to increase their investment in the digital economy field. It has already absorbed a total of 1,395 workers and is targeting a total of 16,500 workers and investment of 16 trillion rupiah by 2040.
The SEZs have established their business activities in digital economy and technology development research, tourism, education, creative industries and other economies. Many believe these special zones will bring various benefits, such as taxation, customs, excise, traffic of goods, workforce, immigration, land and spatial planning. The benefits will certainly make the licensing process quick and easy, thus attracting new investment.
BP Batam chairman Muhammad Rudi expressed gratitude to the central government as it had just spent a year completing the whole affair. He was hoping that the ease of doing business as offered by these SEZs would positively impact Batam’s economy and decrease unemployment.
Even further, he went on, the presence of the government regulations as legal protection would particularly benefit the local residents. The BAT-SEZ would create new opportunities for aerospace sector enthusiasts, whereas the Nongsa-SEZ, which is known for its creative digital industry, would contribute to the education sector.
BP Batam plans to establish an international health SEZ in Sekupang, where BP Batam’s Hospital is located, with a total area of 44.5 Ha. This new SEZ would offer opportunities to develop health tourism businesses such as opening an international hospital offering cardiac, geriatric, cancer, beauty and stem cell medical services, pharmacy and medical devices, medical personnel vocational education, accommodation, wellness tourism and a healthcare management system.
