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.