Oct 11, 2016

    Batam investors want to deal only with 1 govt agency


    THE Indonesian 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 Widodo in January, were raised during a hearing between Coordinating Economic Minister Darmin Nasution and Regional Representatives Council members in Jakarta on Friday.

    Local authorities and business community members attended the meeting.

    The problems identified include 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 bureaucratic procedures.

    "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 told those at the hearing.

    Batam and nearby islands in the Riau Islands are 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 get only import tax exemptions

    In the 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.

    Mr Darmin promised to solve the problems so that the government's plan to change the status of Batam to a special economic zone can soon be realised.

    However, he could not set a specific date for when that would be.