Jusuf Kalla pledges to clear roadblocks standing in the way of Batam's growth

INDONESIA'S Vice-President Jusuf Kalla has expressed confidence that the problems dogging the Riau Islands Special Economic Zones (SEZs) can be overcome.

Mr Jusuf was speaking on Thursday after a trip to Batam, an island in the Riau archipelago, and a meeting with Singapore's Minister Mentor Lee Kuan Yew at the Hang Nadim airport.

He acknowledged that investors had left the island lately because of management problems and pledged to clear all the roadblocks that stood in the way of the island's growth.

"I am optimistic that it can be revived," he added. Mr Lee had said that he believed the trend could be reversed in three years if all were determined to fix problems such as corruption and bureaucratic delays.

The resolve to overcome the SEZ problems received wide publicity in the Indonesian media yesterday.

A Media Indonesia report had the headline: "Kalla-Lee agree on boosting investment climate in Batam".

It carried a photograph of Mr Lee and Mr Jusuf on its front page and the report included Mr Lee's remarks on some of the problems related to immigration, tax, and customs and excise duties.

Mr Lee was quoted as saying that Indonesia was a large country and faced a range of problems that had hindered the growth of Batam. It added that he had urged all sides to cooperate to solve the problems in Batam.

News of the meeting was also carried by Kompas, which reported Mr Lee as saying that Batam was not progressing as rapidly as in the days when it was developed jointly by the Singapore Government and the Suharto administration.

"Today, there are so many problems that hinder its growth as a Special Economic Zone. Because of this, more needs to be done to spur growth," Mr Lee was quoted as saying.

Both newspapers also said Mr Kalla agreed with Mr Lee on the problems faced by Batam and the need to rejuvenate SEZs.

Evening newspaper Suara Pembaruan carried a short report on the meeting, quoting the Minister Mentor as saying that the problems faced by Batam had been discussed.

Media Indonesia's online edition carried remarks posted by readers, many of them positive, on the involvement of Singapore in the project to develop Batam as an SEZ.

For instance, a posting by Dodo urged readers to rid themselves of prejudices against Singapore. The writer said forging close ties with Singapore would help Indonesia make its way up the ladder to achieve the status of becoming a developed country.

Singapore and Indonesia inked a new economic agreement in June to revitalise the Riau islands of Batam, Bintan and Karimun.

Under the pact, the two nations will set up SEZs to draw more investment and boost economic growth in the area.

It could see a smoother flow of goods between Singapore and the Riau islands, and make it easier for businessmen to invest by simplifying procedures for work permits and visas.

There will also be an investment service authority to help businessmen deal with licences and documentation.

The seven areas targeted to draw investors are investment, finance and banking, taxation, customs and excise, immigration, manpower and developing capability. The two countries also hope the SEZs could be a model for similar projects to be started elsewhere in Indonesia.

Mr Lee said on Thursday that SEZs could be replicated across Indonesia.