The delay in the implementation of the law on free trade zone in

The delay in the implementation of the law on free trade zone in Batam has upset almost all businessmen on the island. They hope that the government will soon implement the law to help further stimulate economic activities on the island. Below are excerpts taken from interviews with local business leaders on their views on the future of the island.

Abidin Chairman of the Association of Indonesian Entrepreneurs, Batam Director of PT Sat Nusa Persada The central government's commitment to further promote Batam as an important investment destination in the country should be reflected in a concrete action such as through the issuance of regulations that could create more favorable business climate. The delay in the implementation of the law on free trade zone n Batam has discouraged both foreign and local investors from making new investment on the island. Hundreds of investors have expressed their interest to invest on the island but they are still waiting for the implementation of the law before taking a concrete action about their plans. The legal uncertainty and the seriousness of the government are the two key factors that could attract investors to invest their money on the island. In the past, Batam was chosen by foreign investors as the site for their investment largely due to the tax incentives offered by the government. The removal of such incentives made Batam no longer competitive. That is why it is the right time now for the government to implement the law on the free trade zone so that investors can benefit from the tax incentives they enjoyed in the past.

Johannes Kennedy Chairman of the Association of Industrial Estates, Batam Director of Panbil Industrial Estate Batam can be developed as it is now is due to two main factors - its close distance with Singapore and the government's strong commitment to develop the island as reflected by the construction of modern infrastructure facilities such as seaports, airport, bridges and roads. In the latter stage of the development of Batam has been, however, interrupted by the central government's lack of response in coping with investors' problem. The delay in the implementation of the law on free trade is one of examples that indicate the lack of the government's supports in the future development of the island. The delay in the implementation on the law on the free trade zone could further slow down the economy of the island and at the same to further increase the unemployment rate which has reached about 30 percent at present. Batam certainly needs new investments to help cope with the unemployment problem. The implementation of the law on free trade zone will be the only possible answer to cope with such problems.

Kris Wiluan President Director of PT Citra Tubindo Tbk Batam has successfully passed through various stages of development efforts to turn it as a major investment destination as it is now. However, the final stage that will turn Batam into one of important free trade zones in Asia and Pacific has been disturbed the delay in the issuance of the long waited law on free trade zone. There are three stages of development in Batam. During the first stage of its development in between 1970 and 1980, Batam was developed as an alternative base of foreign oil companies which during these period were mostly based in the more costly Singapore. The increase in prices in Singapore had forced such companies to move their bases to Batam. In the second stage of its development during the period between 1980 and 1990, Batam was developed as an alternative investment site for Singaporean companies. During the period, many Singaporean companies relocated their factories to Batam to cope with the rising operating costs in the neighboring country. From 1990 until now, Batam should have been developed into a free trade zone to enable it to compete with other investment destinations in other Asian countries. There is no choice for the government but to implement the law if it wants Batam to win the competition.

Eddy Hussy Chairman of Real Estates Association, Batam The government should make any possible efforts to further improve the business climate in Batam. Tax incentives and the elimination of bureaucratic procedures in obtaining investment permits are the key factors in attracting investors. That is why it is important for the government not to further delay the issuance of the law on free trade zone. Only with the issuance of the law, Batam will be able to maintain its competitiveness in attracting foreign investors. We are losing our time and I think there is no more reason for the government to postpone the implementation of the much waited law.