Private sector investments on the rise in Batam

JAKARTA (JP): State Minister for Research and Technology B.J. Habibie said yesterday that total investments on Batam Island reached US$5 billion as of the end of last year, with $4.2 billion or 83 percent coming from the private sector.

Speaking to members of the House of Representatives' Commission X, which oversees science, technology and environmental affairs, Habibie said that government investments on the island, which has a population of 162,477, accounted for only 17 percent or $860 million.

Batam Island, 20 km southeast of Singapore, is designed as an export processing zone, which has its own regional authority.

Habibie said the proportion of government investments in the area has continued to decline over the past years.

In 1978, government investments in the area reached $116 million or 57.6 percent of total investments, while the private sector contributed $85 million.

In 1983, government investments rose to $253 million, but its proportion dropped to 50.4 percent, while the private sector's investments reached $249 million. In 1993, government investments rose to $742.7 million but its proportion dropped to only 16.4 percent, while the private sector contributed $3.8 billion.

Investments by the private sector are made for businesses in the industrial fields (52.2 percent), trade and services (11.62 percent), agribusiness (2.35 percent), tourism (17.75 percent) and real estates (16.08 percent).

Foreign exchange revenues generated by Batam also increased from $330,040 in 1978, which came only from exports, to $3.2 million in 1983, which came from tourism and exports, to $1.2 billion in 1993 and to $1.7 billion in 1994.

Currently, 194 domestic and foreign companies operate in Batam, of which 59.2 percent engage in machinery, basic metal and electronics industries, 2.1 percent in the chemical industry and 48.7 percent in multi-various industries.

Habibie said the government is currently also expanding the export processing region to include surrounding islands, such as the Rempang and Galang islands.

He said six bridges are currently being constructed to link the islands. The bridges will have a length of 644 meters between the Batam and Tonton islands, 420 meters between the Tonton and Nipah islands, 270 meters between the Nipah and Setoko islands, 365 meters between the Setoko and Rempang islands, 385 meters between the Rempang and Galang islands and 180 meters between the Galang and Galang Baru islands.(pwn)