Wed, 07 May 2003

Batam reduces growth target

The Jakarta Post, Jakarta

The Batam Industrial Development Authority (BIDA) has downgraded its economic growth target of 8.25 percent for this year to 8 percent due to the outbreak of Severe Acute Respiratory Syndrome (SARS) and possible military operations in Aceh.

BIDA chairman Ismeth Abdullah said SARS and the security issues in Aceh had prevented investors from pursuing their investment plans on the island.

"Hopefully, the SARS case and the Aceh issues will not continue for long," Ismeth told reporters after signing a memorandum of understanding with the Ministry of Agriculture and the Ministry of Fisheries on Tuesday.

Although Indonesia is not a SARS-infected country, investors from SARS-infected areas such as mainland China, Hong Kong and Singapore have been advised to avoid traveling by their respective governments. Many of the investors in Batam come from these countries.

Ismeth said in 2002, Batam had 80 new foreign investors who invested a total of US$600 million. The additional companies bring the total foreign investment by all companies in Batam to 611 companies with a total investment of $3.6 billion.

As of March 2003, there were some 22 new foreign investment companies on the island this year, injecting some $60 million worth of investment.

For 2003, Ismeth said that BIDA had set a similar target of 80 foreign investment companies.

As for domestic investment, the growth is not as fast as foreign. According to Ismeth, there were only 10 additional domestic investment companies in Batam this year.