The government has decided to give the entire island of Batam in Riau Islands province free trade area status, Asia Pulse reported.
Industry Minister Fahmi Idris said after a meeting of economics ministers on Friday (29/6/07) that the decision had been made to give legal certainty for investors in the industrial island.
Many foreign investors were already reported to be leaving the island because of uncertainty about its status, he said. The decision to opt for free trade status for the whole island settles a long-running debate over whether the whole island or just an enclave should be given the status.
There will be additional incentives for investors in Batam, and its two neighboring islands of Bintan and Karimun, Idris said, but the incentives are yet to be decided.
He said the government hopes that the new status given to Batam will result in faster growth of investment.