S'pore awaits govt ruling on Riau SEZ

Ary Hermawan, The Jakarta Post, Jakarta

Singapore is waiting for a government ruling to begin promoting Indonesia's special economic zones (SEZs) in the Riau Islands province to global investors, a top executive of the Indonesian Chamber of Commerce and Industry (Kadin) said.

Kadin's chairman M.S. Hidayat said in Jakarta on Saturday that Singapore had agreed not only to act as an investor but also to help promote the special economic zone, which covers the Batam, Bintan and Karimun islands, to foreign investors in the United States, Europe, Japan and China.

However, Singapore had not begun the promotional job because the necessary regulation for the opening of the special economic zone had not yet been issued, he said.

"The government has promised to complete the regulation on special economic zones by the end of this month," he was quoted as saying by Antara.

"I hope the regulation will give certainty to Singapore and other potential investors about labor, customs and taxation when doing business in the special zone," he added.

Indonesia signed a cooperation agreement with Singapore last June to transform Batam, Bintan and Karimun into SEZs in its effort to lure more investors to the country. With the agreement, Jakarta also aimed to benefit not only from capital from Singapore, which is about 30 minutes by boat from Batam, but also from the country's networking and promotional skills.

"We have to admit that Singapore does better than us in marketing," Hidayat said.

The government initially planned to draft a law to legalize and provide special regulations to support the regions as SEZs, but such a move was deemed ineffective because its deliberation process at the House of Representatives may have taken years. The government decided to draft a regulation in lieu of a law as the need for legal certainty for the SEZs is considered urgent.

The establishment of special economic zones has been included in a newly passed investment law. But investment incentives will be regulated under the government's regulation.

Besides Batam, Bintan and Karimun, the government also plans to create SEZs in North Sumatra, South Sulawesi and Bojonegara in Banten. It also recently announced plans to turn both sides of the Surabaya-Madura bridge into SEZs, with the zones expected to cover 600 hectares.
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