Pact to be signed with Indonesia to help country set up new economic zones

SINGAPORE is to help Indonesia revitalise Batam and Bintan under a new pact that will help the country set up new economic zones.

The agreement is to be signed at the end of this month in Batam by economic ministers of the two countries.

Indonesian President Susilo Bambang Yudhoyono and Singapore Prime Minister Lee Hsien Loong will be on hand to witness the signing of the agreement.

A joint steering committee will be formed to keep it on track.

It will be anchored by heavyweights on both sides: Senior Minister Goh Chok Tong and Vice-President Jusuf Kalla.

These details were revealed here by Singapore Foreign Minister George Yeo yesterday, after his 30-minute meeting with Mr Kalla.

The two men had been instrumental in the Special Economic Zone (SEZ) cooperation plan that was first announced after their March 18 meeting in Batam.

Mr Yeo said yesterday: 'This will send a strong signal to the investing community that both countries are serious about upgrading the business environment in both Batam and Bintan.

'We'll build upon them with a view towards strengthening them and expanding their scope.

'Mr Kalla envisaged that eventually we should also bring in the islands south of Batam,' he added.

He was referring to earlier pacts signed in 1980 and 1990 on economic cooperation in the two locations.

Noting that Singapore will bring with it a wealth of experience in setting up SEZs in various countries, Mr Yeo said Batam and Bintan will be expected to be the 'demonstration model' for the rest of the country, just like Singapore's involvement with China's Suzhou Industrial Park was.

He added: 'Within China itself, over 100,000 officials have visited Suzhou to study what has been done there, and through these study visits, many of the ideas have now proliferated all over China and this must be the objective for Indonesia.

'In this way, the whole of Indonesia will benefit from this project.'

Later, he said the plan to help revitalise Indonesia's lethargic economy by carving out areas with special investor-friendly rules would not be limited to just those areas.

So far, Indonesia has indicated that it is interested in setting up up to eight SEZs in various locations throughout the archipelago.

Mr Yeo revealed that officials would be meeting tomorrow to hammer out details of the agreement, so as to give the committee a running start.

The steering committee, which will also include the economic and foreign ministers from both sides, will meet soon after the pact is signed and may have to meet once every six months initially, he added.

He said: 'This will ensure that problems are resolved quickly and investors will feel confident that whatever difficulties they face will be quickly addressed in an expeditious and effective manner.'