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Jakarta Post

Batam economy in a state of emergency, mayor says

  • Fadli, Batam

    The Jakarta Post

Jakarta   /   Fri, June 16, 2017   /   03:11 pm
Batam economy in a state of emergency, mayor says People wait outside the production facility of PT Sanyo Energy Batam at Batamindo Industrial Park in Batam, Riau Islands. The battery maker has decided to close down its business, citing rising labor costs. (JP/Fadli)

Batam Mayor Muhammad Rudi said he has reported to President Joko “Jokowi” Widodo and Economic Coordination Minister Darmin Nasution about the island’s worsening economy, though it had been designed to serve as the center for Indonesia’s economic growth.

“I underlined in my report that Batam was in an emergency state. The central government needs to take immediate action to save Batam,” Rudi said in Batam, Riau Islands, on Thursday.

The Batam Manpower Agency recorded that about 300,000 of the island’s workers have lost their jobs this year.

Batam’s economic growth, which stood at 2.02 percent in the second quarter of 2017, strongly indicates the economic slowdown on the island. Growth was still at 5.24 percent in the fourth quarter of 2016.

“During the recent visit of President Jokowi to Batam, I told him about massive layoffs from the closing of factories. He promised to take immediate action, but the promise has not been fulfilled yet,” Rudi added.

Riau Islands chairman of the Indonesian Employers Association’s (Apindo) supervisory council, Abidon Hasibuhan, said high labor wages were the crux of the problem in Batam.

“Batam’s minimum wage is the third highest in AEAN, after Singapore and Brunei Darussalam. The government ignores this. The government must be neutral. It should not always side with workers; it should also listen to employees, too,” he added.

Meanwhile, Rudi said the dualism of Batam’s leadership – the Batam city administration and Batam Free Trade Zone Authority – contributed to lengthy red tape for investors in dealing with bureaucracy. (bbn)