Batam to sign pact with JICC

Batam to sign pact with JICC

Fadli, The Jakarta Post, Batam

The Batam Industrial Development Authority (BIDA) will sign a
memorandum of understanding (MoU) with the Japan Chamber of
Commerce and Industry (JICC) in Singapore to promote the island
as an investment destination for Japanese investors.

Under the MoU, which will be signed on Feb. 13 in Batam, both
agencies will agree to share data and information, to cooperate
in organizing trade and investment missions and to encourage JICC
members to invest in Batam, BIDA's chairman Ismeth Abdullah said
on Tuesday.

Ismeth said despite the growing popularity of China as an
investment destination in the region, Batam could still offer a
good alternative for Japanese investors, given its well-
established infrastructure and relatively cheap labor.

Furthermore, he said, the planned free trade agreement (FTA)
between Singapore and the U.S. had increased the island's
attractiveness to investors. Under the FTA, all products
manufactured in Batam and the adjacent island of Bintan would be
exempt from import duties in the U.S.

The agreement with JICC will add to the number of pacts signed
by BIDA with Japanese business associations.

Last October, BIDA signed MoUs with four Osaka-based
associations -- the Kansai Economic Federation (Kankeiren), Japan
Indonesia Business Association of Kansai (Jibak), Association for
Medium and Small Enterprises of Fukui Prefecture and the Osaka
Business Partner City Council -- to promote Batam as an
investment destination for the associations' members.

Today, 130 companies operate in Japan, all JICC members,
according to BIDA's data.

Ismeth said BIDA had also asked to clinch a similar agreement
with Japan's powerful trade body JETRO, but the agency only
agreed to seek "informal" cooperation.

When asked for comments on Batam's prospects, Shawada Shugo, a
senior advisor with the Japan International Cooperation Agency
(JICA) told The Jakarta Post that most Japanese investors still
preferred to invest in China, due to its proximity to Japan and
its huge market potential.

However, they also saw Batam as an profitable place for
investment, especially given that the island was included in the
Singapore-U.S trade pact.