Investors in Batam 'unshaken by unrest'

BATAM (JP): The head of the Batam Island Authority, Ismeth Abdullah, said over the weekend foreign investors remained confident in Batam despite recent violence targeting foreign investments on neighboring Bintan.

Ismeth expected some 70 new foreign investors to Batam this year, which would boost the total number of foreign investors on the island to around 460.

"Growth remains encouraging here, there are many foreign investors filing applications," he said during a business gathering.

Demonstrators targeted the Bintan Industrial Estate in January, protesting the amount of money they received for their land in 1991. The protesters said they were pressured to sell the land at very low prices.

The demonstrators also stormed a power plant supplying electricity to the industrial estate.

Ismeth said many investors were jittery in the wake of the Bintan incident, but he said the Batam authority was working hard to convince foreign investors that Batam was safe.

"So far it (the problem) can be settled. Confidence remains high," he said, pointing out that at least 10 new foreign investors would soon enter the island with total investments of around US$60 million.

He said the overseas trip made recently by President Abdurrahman Wahid helped boost the confidence of foreign investors on Batam, which is located some 19 kilometer away from Singapore.

Ismeth said Batam's industrial bonded zone was more attractive than similar bonded zones offered by other countries in the region.

"Many Singapore industries relocate their facilities here because Batam can double their profit margin. So Batam is still competitive," he said.

He said the Batam authority would continue to develop the island's infrastructure, including accelerating the completion of a new container port.

"We can no longer delay the development of the new port," he said, adding that by 2001 the island would be crowded with container ships.

He projected that by 2001 there would be between 520 and 550 foreign companies operating on Batam.

The largest foreign investors on the 415-square-meter island are from Singapore, South Korea, Taiwan and the United States.

In addition to foreign companies, there are currently around 150 domestic companies operating on Batam.

Ismeth said the companies mostly came from the electronics, steel, pipes, plastics and service industries.

Ismeth also said the outlook for the tourism industry on the island remained rosy.

"Some 1.2 million tourists visited Batam last year," he said, adding that the island was the second most popular tourist destination in the country after Bali.

He expects some 1.3 million to 1.4 million tourists to visit Batam in 2000. (rei)