FOR ADVERORTIAL: BATAM - SUNDAY
FOR ADVERORTIAL: BATAM - SUNDAY
A portrait of reality: Batam through eyes of expatriates
Although Indonesia is now under an unfavorable international spotlight, Batam Island continues to portray a positive image to the outside world, a fact proven by the results of an Oct. 25, 2002, study conducted by Political and Economic Risk Consultancy Ltd (PERC), a Hong Kong-based independent research institution.
The results of this study were an encouraging image for Indonesia, considering that Batam is one of the nation's most important assets.
The chairman of the Batam Industrial Development Authority (BIDA), Ismeth Abdullah, said PERC used 10 variables in its study, namely those covering external affairs, foreign investors, physical infrastructure, ease of doing business, domestic social environment, quality of expatriates' lives, political environment, natural environment, educational and human resources, institutional quality, accountability and standards.
"We still have to improve ourselves in terms of domestic social environment, quality of expatriates' lives and human resources. We are striving to improve in these areas for the future," Ismeth said.
Included in the study were China, India, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Batam, as part of Indonesia, was included as it is a competitive industrial estate in the Asia-Pacific region. The results of the study ranked Batam third with 4.87 points, on a scale where the higher the figure the poorer the investment climate. Batam ranked after Singapore (2.28 points) and Malaysia (4,62). Indonesia itself -- as a country -- ranked last with 7.52 points
"This study was independently conducted; we didn't even know when the researchers came here or where they stayed. The result shows that Batam is still a convenient place for investment. The political condition in Jakarta has little impact on Batam. The fear that the law on regional autonomy would cause friction between the municipality administration and the Batam authorities has not been proven correct," Ismeth said.
PERC conducted its research in Batam in August and September of 2002, led by its managing director Robert C. Broadfoot.
Ismeth said that while foreigners' confidence in Indonesia had been on the decline in the last few years, Batam had earned the trust of international investors. Between January and November 2002, foreign investment approvals reached 80 projects with a total value of US$225 million, exceeding the 2002 target of 70 foreign investment projects. In the same period, two existing foreign companies carried out expansion projects with a total investment value of $7 million.
"Of all the foreign investment undertakings in Batam, only Hitachi closed down its business. Rumors that many foreign investment projects in Batam have been relocated are not true, as the taxes for these projects are still being paid. It is impossible, therefore, to say that these projects have ceased operation. What may happen is that some of them are combined or are moved from one industrial estate to another in Batam," Ismeth said.
As of the end of 2002, foreign companies investing in Batam came to a total of 531 projects with a total value of $3.32 billion. As for domestic investment, there are 136 projects worth Rp 2.86 trillion, employing 179,665 people, of whom some 2,000 are expatriates.
This favorable image of Indonesia as viewed by foreigners will, at the least, spur the Batam Industrial Development Authority to make more of an effort to attract foreign investment to Indonesia, in particular to Batam. The number of foreign investment projects in Batam is expected to exceed 80 in 2003. Last year, the target, which was set at 70 foreign investment projects, was exceeded and by October 2002 74 foreign investment projects had been recorded.
"We are striving to continue improving ourselves. I myself am always ready to provide explanations to foreigners who wish to get to know Batam better. We'll provide information to anybody and will always be prepared to provide maximum services," Ismeth said.