Exclusive Content - 12 March 2018

The Future of Batam: Creating A Regional Hub

Final Report from The Batam Economic Forum

Tanggal: Feb 27th 2018

Venue: Hotel Radisson, Batam Center

Theme:  The Future of Batam: Creating A Regional Hub

The Batam Economic Forum was held at the Radisson Hotel, Batam Center on February 27th, 2018. Jointly hosted by BP Batam and The Indonesia Economic Forum, it was the first economic conference to be held in Batam to discuss the future of Batam and Kepri.

The Batam Economic Forum was attended by more than 300 senior government officers, business leaders, investors from Indonesia, Singapore, China and Australia. The theme for the Forum “The Future of Batam: Creating A Regional Hub” focused how Batam can revive its economy and become an engine of growth in industries such as logistics, digital, hi tech manufacturing and tourism.

Among the speakers who graced the occasion included Chairman of BP Bata, Bapak Lukita Dinarsyah Tuwo; Bapak Ilham Habibie, Founder of Berkara Indonesia and Chairman Wantiknas; Bapak Wang LiPing, Economic Councellor, Embassy of the Republic of China; Kris Wiluan, Founder of CitraMas Group; SD Darmono, Founder and Chairman of PT Jababeka; Fadjar Hutomo, Deputy Chairman, Financial Access BeKraf: HR Amos; Chairman HRA Group; Dr Francis Hutchinson, ISEAS Yusof Ishak Institute; Gusti Raizal Eka Putra, Regional Head Bank Indonesia; Dadan Kurniadipura, President Director Bright PLN Batam.

The Batam Economic Forum was closed by Prof. Dr Sri Adiningsih, Chairperson, Advisory Council to the President, Bapak Sidarta Danusubroto, M Gen (Ret), Member of the Presidential Advisory Council Republic of Indonesia and BapakLukita Dinarsyah Tuwo.

Key Findings

Becoming a Global Logisitics Hub

Batam occupies a strategic position both economically and geographically within Indonesia and the region. It is geographically located just 40 km from Singapore and on the southern side of the Straits of Malacca, the second busiest waterway in the world through which passes almost half of the world’s total annual seaborne trade and some 60,000 vessels.

As Asia’s share of the global economy continues to grow, the Straits of Malacca will grow in importance. It is estimated that more than 100 million TEUs (twenty foot equivalent) will pass through the Straits of Malacca by 2040, with Singapore accounting for about 50 million TEUs. The rest which is about 50million TEUs can be handled by Port Klang in Malaysia and Batam. Both Singapore and Malaysia are investing billions of dollars to expand and improve their ports to cater to the expected gowth in trade through the Straits of Malacca.

Batam too has an opportunity to leverage on this growth and become a major seaport servicing upto 20 million TEUs over the next 40 years. It will need to continue to invest in upgrading its current port at Batu Ampar into a deep water container facility. Currentl Batu Ampar can handle 600,000 TEUs.

Batam also has a great opportunity to become a regional logistics hub given its strategic location, abundant available land; strong infrastructure development and the proximity of Hang Nadim airport and Batu Ampar Seaport.

A Digital, Talent Hub

Batam has done well over the past 30 years by focusing on oil& gas sector, electronic manufacturing, shipyards and tourism. While it must continue to maintain these sectors, Batam must also focus on new growth sectors which are ICT driven and depedent on human talent.

To encourage investors to build these new industries, Batam must have adequate infrastructure consisting of highspeed Internet connectivity across the island; good public transportation; high-quality hospitals and medicial services; and research-based universities with strong links to local industries, incubators and technology parks.

Kepri with Batam at the center also have the potential to become the Caribbean of West Indonesia by linking all the islands by either land bridge or seaplanes. Kepri has some 3,000 islands offering tourists some of the best diving and sea activities in the world.

To achieve these objectives, Batam must link its economy more closely with Singapore not just in manufacturing but also finance, education, ICT, legal, property and tourism.

Batam can also become a source of fresh food for Singapore given that Singapore has limited land and an expanding population. It will require new sources of fresh food and vegetable and Batam can in fact become the hinterland for Singapore.

Key Recommendation: The concept of re-introducing maximum autonomy for Batam must be seriously taken into account

Batam has great potential to grow into a major hub for not just Indonesia but the whole region. It has a strategic geographical location, ample land and resources; large talent pool and an existing strong economy.

But in the past few years, many investors and business owners have been concerned about the dualism of authority between BP Batam and the local government. This has caused some factories to close and the loss of jobs.

This issue can be resolved legally under the Constitution and in the interest of the people of Batam. Batam must be declared a special autonomous region with the authority to manage all aspects of the city and the island resting with one institution. This has legal standing and precedence and is crucial for the future of Batam as economic and logistics hub.

Batam must be organized and managed for the best of the nation and not for any particular group. It is too important and critical for the future of Indonesia.

Prepared by: BP Batam and the Indonesian Economic Forum