Tue, 04 Jan 2000

Stability gives tourism, industry bright hopes

By A. Junaidi

BATAM, Riau (JP): Industry and tourism in Batam appear to be reviving, thanks to the return of political stability following the democratic election of President Abdurrahman Wahid in October last year.

Chairman of the Batam Industrial Development Authority (BIDA) Ismeth Abdullah said recently several investors had renewed their commitment to invest in Batam after the presidential election.

"Tourist arrivals are also currently increasing," Ismeth told The Jakarta Post.

He said this year Batam's 389 companies, mostly foreign investment firms, would contribute more than Rp 1 trillion (US$142 million) in corporate and income taxes to state revenues.

He said 47 new factories were expected to be built on the island in 2000, with US$ 90 million dollars from Singaporean, Korean and Japanese investors.

Out of 30 countries investing in Batam, Singapore is the largest, accounting for 75 percent of all investment, followed by the United States (5.6 percent) and Japan (five percent).

Ismeth hoped the recent visit of President Abdurrahman, better known as Gus Dur, to Singapore would encourage more Singaporean firms and individuals to invest on the island.

During his visit in November Gus Dur reportedly offered Singaporean senior minister Lee Kuan Yew a job as his international economic advisor.

Gus Dur's predecessor B.J. Habibie, the pioneer behind Batam's development, was believed to have a poor relationship with Lee.

During a recent consultative meeting with the House of Representatives Gus Dur announced that Batam, along with Bintan, Karimun and Sabang, would be declared free trade zones.

He said the new status was aimed at speeding up development in the islands and increasing job opportunities.

Ismeth hailed the free trade area status, saying it would attract more investors to the 145-square-kilometer island situated just 20 kilometers south of Singapore.

Batam's economy grew by two percent last year, while other parts of the country recorded minus growth. This year Batam's economy is predicted to grow by between four and five percent.

"Batam was the only province to enjoy economic growth during the monetary crisis," Ismeth said.


A president of a local car repair firm, Sujak Widodo, also expressed confidence that Batam would continue to blossom in the futures.

Sujak said that, in cooperation with a local investor, he planned to build a car factory in Batam in three years time with an initial investment of Rp 10 billion.

Local property businessman M. Rindo Purba said the property market in Batam was on the right track, thanks to the survival of industry on the island.

"The economic crisis affected us a little bit," Rindo, an executive of the Indonesian Real Estate Developers Association (REI) in Batam, said without elaborating.

The tourist sector in Batam has also regained its feet since the presidential election.

Foreign tourist arrivals dropped significantly after bloody ethnic clashes between Bataks and Florinese broke out here last July, leaving at least 13 people dead.

From 110,000 in July, they dropped to 88,456 in August, the lowest number this year. The figure then increased to 98,456 in September, 110,900 in October and 123,000 in November.

Sales manager at Batam's Turi Beach Resort Ida Bagus Oka Negara said many tourists canceled their visits and asked for refunds on hearing reports of fighting on the island.

"Now they have returned. Almost every weekend hotels here are fully booked," Bagus said.

BIDA's deputy director for tourism Prieddy Soegondho P. said Batam would develop and promote cultural and ecotourism to lengthen tourist stays.

"Now tourists only stay here an average of two days," Prieddy said, adding that 70 percent of the tourists are Singaporean and eight percent are Malaysian.

He predicted this year the number of tourists would reach 1.2 million, making it the country's second most popular tourist destination after Bali.