Six Singaporean investors leave Batam.

The six firms from Singapore are reported to have cited the lack of clear rules in Batam regarding its status as a special economic zone, and the increasing costs of production on the island. Two of the companies, says M.S. Hidayat of the Indonesian Chamber of Commerce (Kadin), intend to leave Batam for Johor, Malaysia, while the other four seek greener pastures in Vietnam.

The Singaporean investors, who are mainly involved in the electronics industry, are tired of having to deal with a dual system of permits, with both the Batam Authority and Batam City having to be satisfied on the paperwork front, says Hidayat in Jakarta.

M.S. Hidayat.

The lack of progress on the formation of the Special Economic Zone (Kawasan Ekonomi Khusus (KEK)), which involves some agreement with the Singapore government, was also mentioned, with the rules not yet having been finalised. Hidayat said he had already written to the president and warned that unless the KEK was put into place properly the wooing of the Johor investment authorities in Malaysia would pay off.

It appears that the government intends to first re-issue a revamped Special Economic Zone/SEZ Act, with Coordinating Minister for the Economy, Boediono, saying that six months is needed for this.

In Jakarta also a number of foreign investors are believed to be considering moving elsewhere in the wake of the Jakarta floods. Hidayat said that unless the flooding problem was overcome, and it was clear that floods would not occur again next year, some investors would pack up and leave the capital. mediaindo