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lay out baru2 - KWR International
03 - I REPORT Batam Industrial Development Authority. BIDA Building, Batam Centre, Batam Island 29400, Indonesia. Tel : (62 - 778) 462047 - 48. Fax : (62 - 778) 464092. Website : www.batam.go.id. E-mail : [email protected] BATAM COMPARISON RISKS Special points of interrest: ! Batam’s participation at Taiwan Travel Fair ! Batam Master Open 2002 ! E-Government ! Investment Promotion in Germany An international independent risk-rating company, based in Hongkong, Political and Economic Risk Consultancy has conducted a survey in Batam recently. Using the same parameters to the other regions that they have surveyed before, Batam has a rating of 4.87, much better compared to 7.52 for Indonesia as a whole. On the other hand, China gets the rating of 5.64 and Vietnam of 5.7. The rating of Batam is the third best in Asia, closely following Malaysia and Singapore. Factors surveyed include services to investors, labour and security issues. This shows that Batam offers a more investors-friendly environment. As quoted from their report, "foreign investors in Batam consider the business environment to be less risky than overall Indonesian risks, especially from the perspective of labor-intensive companies manufacturing products for export to other countries in Asia, North America and Europe." It follows by stating that since Batam's superior physical infrastructure, import of raw materials and equipment as well as export of finished products is very simple. Mr. Robert Broadfoot, the internationally recognized consultant, found through his survey that Batam's foreign investors have taken advantage on infrastructure, banks and other supporting services offered by Singapore. Therefore, putting Batam not only ahead of other places in Indonesia but also to other free trade zones in Southeast Asia, as "none have links with Singapore that are as close as Batam's". Therefore, this survey has indeed assisted BIDA to be aware of main issues and concerns of businesses, which contribute to a conducive investment climate, such as security and legal certainty. With the new commitment and strong desire, BIDA will certainly address these main issues to maintain the sustainable business environment in Batam. Inside this issue : ! Batam.s participation at Taiwan Travel Fair ! Batam Master Open 2002 ! E-Government ! Investment Promotion in Germany ! Grouper Cultivation in Batam ! VISA Exemption for Chinese -air-travelers to Batam ! Closer Ties of Batam and Japan ! Foreign Dignitaries Visit to Batam ! BIOTECHNOLOGY ! BATAM COMPARISON RISKS Risk Analysis for Foreign Investment Sing Mal Batam Thai. China Viet. Phil India Indonesia a) External variables 3.74 3.38 3.89 4.26 3.45 3.44 4.96 8.22 4.67 b) Foreign investor variables 2.26 4.20 4.06 5.465 5.88 5.16 5.16 6.51 6.93 c) Physical infrastructure 0.52 3.95 4.31 4.71 5.04 6.45 6.27 7.15 7.41 d) The ease of doing business 2.47 7.94 4.49 6.58 7.36 6.84 5.77 7.36 8.57 e) Domestic social environment 2.37 3.93 5.00 4.02 4.67 4.34 5.25 6.27 7.73 f) Quality of expatriate life 2.02 3.52 5.04 3.02 3.73 5.03 4.51 5.68 6.50 g) The political environment 1.63 5.53 5.49 6.45 6.58 6.36 7.05 7.81 8.49 h) Natural environment 2.32 4.69 5.27 7.51 7.93 6.97 8.07 8.43 9.12 i) Education and human resource variables 3.17 4.91 5.52 6.06 4.05 4.96 4.97 4.20 6.90 j) Institutional quality, accountability and standards 2.28 6.29 5.59 8.08 7.72 7.46 7.64 8.03 9.51 TOTAL SCORE 2.28 4.62 4.87 5.61 5.64 5.70 6.05 7.09 7.52 Grades range from zero to 10, with zero being the best grade possible and 10 the worst. Source : PERC Ltd. 1 REPORT Investment Promotion in Germany In order to promote investment in Batam, the Batam Industrial Development Authority, in cooperation with the Consulate General of the Republic of Indonesia in Frankfurt and the German-Asia Business Circle (DAW, Deutch-Asiatischer Wirtschaftskreis), conducted a meeting with 30 businesspeople on September 25, 2002 in Frankfurt. BIDA also conducted a seminar and discussion session in Berlin on September 26, 2002, which was attended by more than 50 businesspeople and government officials. This event was in cooperation with the Embassy of the Republic of Indonesia in Berlin, the Berlin Indonesia Business Council (BIBC) and the Asia-Pacific Forum Berlin. Mr. Ismeth Abdullah, the Chairman of BIDA, affirmed that the organization has signed a Memorandum of Understanding (MoU) with BIBC to promote investment and information and communication development. Bado Kruger, the President of the DAW, believes that Batam is the right location for German businesses to expand in the Asia Pacific region. Vice President for the Executive Asia-Pacific Forum Berlin, Mr. Eberhard Temple, has also expressed his enthusiasm in the investment opportunities in Batam. Participants were interested in some sectors offered for investment, which include the electronics, shipyard, tourism, and infrastructure facilities development. Batam's Participation at the Taiwan Travel Fair The Batam Industrial Development Authority (BIDA) participated at the Taiwan Travel Fair, on November 23-26, 2002 in order to regain the trust of foreign tourists to Indonesia after the Bali tragedy last year. This is part of the efforts of BIDA as a government body in Batam, promoting its development as a tourism, industrial, trading, and transshipment area. 2 Having Batam as the second gateway for foreign visitors to Indonesia with 1.2 million foreign tourists last year, BIDA is optimistic that Batam can become a more popular tourist destination. Therefore, BIDA participates in international events in order to introduce and promote Batam's tourism industry. Batam tourism officials stated that they use these opportunities to convince many foreign investors, particularly from the Asia Pacific, that Batam has stepped up its security measures to have a safe and secure location for residents and visitors. Therefore, why don't you come and enjoy the easy life filled with nature and adventure? REPORT E-Government Batam is set apart for the national pilot project development in Information Technology to apply the concept of e-Government (e-Gov) and Batam Intelligent Island Project. These two concepts are expected to provide easy information access to investors who want to know more about Batam and to assist the government to obtain accurate and reliable data for policy making. The Minister for Information a n d Telecommuni cations of the Republic of Indonesia, H.E. Mr. Syamsul Mu'arif opened the Seminar on the e-Government Development held at Melia Panorama Hotel Batam on October 1, 2002. He said that both e-Gov and BII are definitely required in the global era today. As joint efforts to support this model, the Batam Industrial Development Authority, the Municipality of Batam and Telkom (state-owned telecommunication company) have agreed to work together to start establishing the website www.ibatam.com to provide information on Batam. E-Gov will also integrate Smart Card, a multifunctional card for residents of Batam. This Smart Card can simplify government procedures to obtain information on current demography and future planning of Batam. “This integrated system will be both effective and compatible in the international world,” said the Chairman of BIDA, Mr. Ismeth Abdullah. Establishing close relations with investors Up to December 2002, Batam has accumulated a total investment value of US$ 9.19 Billion comprised of US$ 2.15 Billion Government Investment, US$ 3.7 Billion of Foreign Private Investment and US$ 3.34 Billion of Domestic Private Investment. The overwhelming figure from the foreign investors has encourage BIDA to establish a good and close relationship with the foreign companies in Batam. With that in mind, BIDA has organised an open discussion with 30 foreign companies in Southlinks Golf & Country club on January 21, 2003. It was also attended by several -related investmentparties such as from the National Investment Coordinating Board, the Custom & Excise Office, Taxation Office and the Batam Police. Through this meeting, BIDA is able to gain the foreign investors' opinions, suggestion and inputs. Some of the attendees are Singaporean, Japanese, American, Malaysian investors and some of the Indonesian partners. In this comprehensive meeting, the participants e x p r e s s e d t h e i r acknowledgement to BIDA high effort to attract more investors to Batam and BIDA full support towards the foreign investors. However, there are also several issues that needed attention such as the allocation of land, security issue, taxation and electricity provider. BIDA is trying every effort to sustain the conducive investment climate in Batam, surely there are several issues to be enhanced such as infrastructures and investment procedures but through the valuable inputs, BIDA is committed to improve the above for a better business environment. 3 REPORT Foreign Dignitaries Visit to Batam The growth of Batam has attracted much attention. However, some of the foreign diplomats currently posted in Jakarta, the capital of Indonesia, have not experienced what Batam has to offer. In order to promote a good cooperation and friendship with other countries, BIDA has invited officials of the foreign embassies in Jakarta to visit Batam. Foreign dignitaries from 23 countries have visited Batam throughout the year. BIDA has learned a lot from suggestions and concerns raised by these guests. BIDA also has a wonderful opportunity to share investment opportunities of the area. Some first-hand experience and discussion were also enjoyed by the diplomats while visiting industrial and tourism businesses in Batam. During his visit, the Ambassador for the United Kingdom, H.E Mr. Richard Gozney said that Batam is one of the best alternatives in the South East Asia region for businesses, considering its modern infrastructures and conducive investment climate. He joined other Ambassadors to assure BIDA that they will assist in promoting Batam as the investment destination in Indonesia. VISA Exemption for Chinese - air-travelers to Batam Batam is gradually becoming the preferred tourist destination in Indonesia, with its position as the nation's second gateway for tourism. Although most of the current tourists are from neighbouring countries, there has been a consistent increase of tourists from Taiwan, Hong Kong and China. 4 In order to ease travel arrangements, the Government of Indonesia has now exempted visa for Chinese tourists who came to Batam by air, while a US$50 visa charge will still be applied for sea travel. Head of Batam Immigration Office, Mr. Mardjono confirmed that the new policy has improved the number of Chinese tourists to Batam. Batam is actively promoting its beautiful beaches, natural and adventure travel, as well as luxury and relaxing resorts. Tourists can also visit an ExVietnamese Refugee Camp in Galang Island, which is accessible in 45 minutes by road from Batam. REPORT Closer Ties of Batam and Japan Batam has established closer ties with Japan and it's business sectors, developing a mutual understanding and cooperation for benefits of Japanese investors. In order to form an official framework, the Batam Industrial Development Authority has signed Memorandums of Understanding (MOU's) with four Japanese major business associations on October 7, 2002 in Osaka. These four associations were the Kansai Economic Federation (Kankeiren), an economic association for industries in Kansai; the Japan Indonesia Business Association of Kansai (JIBAK), a Japan- Indonesia business association that assists investment from either country; the Small and Medium Enterprises Fukui Prefecture, an association of small and medium enterprises in Fukui; and the Osaka Business Partner City Council, a business body which assists businesspeople in Asia to market their products in Japan. Through these MOUs, BIDA and the four associations will work together in joint promotion, investment mission, trade and data exchange and various other missions. BIDA will provide special assistance to Japanese investors who are planning on expanding in Batam. Mr. Nobusama Take, Director of the Japan External Trading Organization (JETRO) Osaka mentioned that many of the Japanese businesspeople have been driven to find better locations, and Batam is an excellent choice. With 52 Japanese companies currently in operation in Batam, Japanese investors will definitely feel welcome in Batam. The Batam Japan Business Club will also assist and promote a better understanding on day-to-day business activities. Workshop Investment Promotion Program Batam Industrial Development Authority (BIDA) organized and delivered a three-day workshop on October 30, 31 and November 1, 2002 together with assistance from the Canadian International Development Agency (CIDA). The event was held at Marketing Centre of the Batam Industrial Development Authority (BIDA). A total of 28 participants took the training. Participants came from 7 Kabupatens, 3 Kotas, 2 KAPETs and 1 FTZ, which included Kabupaten Natuna, Sambas, Kota Balikpapan, Bintan, KAPET Sasamba, Bitung, and the FTZ Sabang. The participating regions were particularly from those who had previously requested assistance from BIDA. The main objectives on the training program are to strengthen the capacity of a selection of Kabupatens, Kota and KAPETs to plan and implement their own programs for investment promotion as well as to develop and strengthen a self-sustaining capacity within BIDA to plan, organize and deliver (and evaluate) 'world class' training and similar events. Through this workshop, participants also learned how to market the potential of their regions more effectively and efficiently. In turn this should help at least some (if not all) of these regions to create new economic development opportunities and thereby help to create new employment and improve their economy. 5 REPORT BATAM MASTERS 2002 As part of the infrastructure development for communities, the Batam Industrial Development Authority (BIDA) has built an Indoor Sports Hall in Batam. The official opening of the Sports Hall was conducted through the International Badminton Championship of Batam Masters 2002 on November 21-24, 2002. 20 world-class players from 9 (nine) countries took part in this event. These participants are outstanding players from Denmark, England, Germany, Hong Kong, South Korea, Malaysia, Singapore and the host Indonesia. More than 2,000 viewers attended the opening ceremony of the Batam Masters 2002, and at the same time, the inauguration of the Sports Hall by the Chairman of the National Olympic Committee of Indonesia (KONI, Komite Olahraga Nasional Indonesia), Mr. Wismoyo Arismunandar. This milestone for Batam was witnessed by the former Vice President of the Republic of Indonesia, H.E. Mr. Try Sutrisno; Chairman of the Indonesian Badminton Association (PBSI, Persatuan Badminton Seluruh Indonesia), Mr. Chairul Tanjung; President of Asian Badminton Confederation, Mr. Fans Gunalan; and the Chairman of the Batam Industrial Development Authority, Mr. Ismeth Abdullah. After four days of excellent sports, the championship was closed with a trophy presentation to Taufik Hidayat (Indonesia) who won the men's single, and Chandra Wijaya / Sigit Budiarto (Indonesia) who won the men's double. The Batam Masters 2002 has truly opened a path for more international sports championships at the 715-km2 island of Batam. BATAM'S APPRECIATION NIGHT Batam Industrial Development Authority (BIDA) held an evening of appreciation at Dharmawangsa Hotel, Jakarta as a token for appreciation to all parties who have contributed to the development of Batam. There are numerous organizations; public and private, as well as countless 6 individuals who have participated significantly in the 31 years of development Batam. In addition to recognizing these parties, the Appreciation Night was attended by 200 invited guests, attributing to the Central Government whose policies have made Batam successful, as well as to the Representatives of Foreign Embassies and Chambers of Commerce and Industry who have helped promoting Batam to their business world. Chairman of the Batam Industrial Development Authority, Mr. Ismeth Abdullah, on his welcoming speech dedicates the success of Batam to the confidence and teamwork of the public and private sectors. He also pledged that BIDA will work even harder to provide better services and efforts next year to create the new Batam, a place where visitors and investors feel welcome. to be continued REPORT BATAM'S APPRECIATION NIGHT At the same time, BIDA has also presented token of appreciation to 11 companies that have contributed significantly to the economic development of Batam, which include PT. Mc. Dermott (Offshore Construction), PT. Citra Mas Group (Tourism, Real Estate), P T. S c h n e i d e r E l e c t r i c (Electronics), PT. Sat Nusa Persada (Electronics Assembly), Bintang Industrial Park, Batamindo Investment Cakrawala (Industrial Park), PT. CIBA Vision (Contact Lenses), PT. Matsushita Kotobuki Electronics, PT. EcoGreen Oleochemical/Batamas Megah (Chemical), and PT. Thomson Multi Media Batam (Multimedia, Television Assembly). BIOTECHNOLOGY In its 31 years of development, Batam has been widely known as a manufacturing base - now moving on towards technology based industries. Batam has been selected nationally to promote the bio-technology industry in Indonesia. Biotechnology is relatively new in Indonesia. For this reason, the Ministry of Research and Technology and BIDA will carry a national pilot project on the development of Bio-technology. Rempang Island, an island that is part of Batam FTZ, has been chosen to be the location of the nation's Bio Island. Prior to the formulation of the concept, the Ministry of Research & Technology, BIDA, the Municipality of Batam and the Bogor Institute of Agriculture, have conducted studies to neighbouring countries. With the biotechnology in Rempang, Indonesia will be looking into a winning project, considering its spacious and fertile land, efficient infrastructure for the development of the technology and its production. Grouper Cultivation in Batam Galang Baru, one of the extended islands of Batam, has great potential for fisheries, particularly in grouper cultivation. Deputy Chairman for Administration and Planning of BIDA, Dr. Wendy Aritenang, said that grouper agri-business has a bright opportunity to be developed considering the high demand of international markets, especially from Singapore and Malaysia. The Minister for Research and Technology of the Republic of Indonesia, H.E. Mr. Hatta Rajasa, harvested the first batch of grouper cultivation at Galang Baru, consists of 12 nets of about 1,500 fish or around 500 kg. This grouper cultivation is also supported by a research department with Germany to gain a higher quality of groupers. BIDA has decided to further develop the cultivation in 2003, thus, will establish a stronger cooperation with the Agency for the Assessment and Application o f Te c h n o l o g y ( B a d a n Pengembangan dan Pengkajian Teknologi) in this project. 7 REPORT Seminar “Re-building Investor Confidence” Batam - Indonesia, an area that is specialized for industries and trade located 20 km from Singapore, has been able to show a consistent achievement by the growth of investment despite the Indonesian financial crisis of recent years. By December 2002, Batam has attracted 612 foreign companies, with a US$3.55 billion net worth of investment. The increasing inflow of foreign investment has helped in the nation's economic recovery. Along with the development and progress of Batam and the implementation of AFTA 2002 and Batam Free Trade Zone, some policies and laws are being changed to make the region more investor-friendly. This seminar “Batam Indonesia: Re-Building Investor Confidence” is jointly organized by the Batam Industrial Development Authority (BIDA), the Singapore Confederation of Industries (SCI) and the Indonesian Business Association of Singapore (IBAS) and supported by the Indonesian Embassy to the Republic of Singapore. Through the event, participants have obtained the current and most up-to-date information on foreign investment policy as well as security issues in Batam, Indonesia. By the end of the discussion, delegates have also gained valuable insights on new decisions from the Government of Indonesia on foreign investment as well as personal and investment security in Indonesia, especially in Batam. The signing of the MOU's between BIDA, SCI and IBAS was done to provide stronger assistance to the members of the two associations who wish to invest in Batam. The initial agreement with these two associations will be officially signed by Mr. Ismeth Abdullah, as the Chairman of BIDA and Mr. Lew Syn Pau, the President of SCI, Mr. Suryo Sulisto, the President of IBAS. The Seminar and MOU signing was held at the Marina Mandarin Hotel, Singapore, and attended by all members of the Singaporean Confederation of Industries, directors, executives of SCI and IBAS and media. Mr. Theo Toemion, the Chairman of the Investment Coordinating Board (BKPM) of the Republic of Indonesia, was the keynote speaker for the day and delivered his address on "Indonesia: Re-Building Investor Confidence”. General Da'i Bachtiar, National Police Chief of the Republic of Indonesia, gave a special presentation on “Security Issues in Indonesia”. Mr. Ismeth Abdullah, the Chairman of the Batam Industrial Development Authority focused on Security and Investment Climate in Batam. Other speakers include Mr. Eddi Hariyadhi, the Chargé d'affaires A.I. of the Republic of Indonesia to Singapore, Mr. Lew Syn Pau, the President of the Singapore Confederation of Industries (SCI), Mr. Suryo Sulisto, the President of the Indonesian Business Association of Singapore (IBAS). In addition to the seminar, delegates had also have the opportunity to catch a glimpse of Batam's industrial growth through presentations by several industrial estates. These industrial estates offer various packages of services (e.g. labour recruitment, licenses) and facilities (e.g. wastewater treatment, uninterrupted utilities). BATAM REPORT Published by: Batam Industrial Development Authority, Patron: Chairman of BIDA, Deputy for Administration & Planning, Deputy for Operation, Deputy for Supervision & Control, Publisher: Bureau of Marketing and Public Relations, Chief-Editor: Riatna Jeo, Editors: Geoff Page, Ariastuty Sirait, Novrita, Lay-Out: Ilham Eka Hartawan, Dendi Gustinandar Administration & Circulation: Marketing Division, Address: Jakarta: D.I. Panjaitan Kav. 24, Jakarta 13410 Indonesia, Tel. (62-21) 8580009-11, 8580034, Fax. 8580038; Batam: Batam Centre, P.O. BOX 151, Batam Island 29400, Indonesia, Tel. (62-778) 462047-48, Fax. 462456, 462240, 462432. The content does not necessarily reflect the view or policy of BIDA unless clearly stated. Parts of content may be quoted by permission from the publisher. Published Quarterly.