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.