Government to Dissolve Batam Free Trade Zone Authority in 2016 _ the Jakarta Post
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1/5/2016 Govt to di ss ol ve Batam fr ee tr ade zone author ity in 2016 | T he Jakar ta Pos t http://www. thej akar tapost.com /new s /2015/12/31/govt-d i ss o lv e- batam - fr ee- tr ade- zone- author ity- 2016.html 1/3 News Views Life Outlook 2016 Home Minister Tjahjo Kumolo announced on Wednesday that the central government was planning to dissolve the Batam Free Trade Zone Authority (BPK FTZ) next year to end the duplication of authority in Riau Islands province’s most developed region. Tjahjo said data showed that for the last 10 years the government had lost Rp 20 trillion (US$1.4 billion) in potential tax revenue from Batam, while the investment value entering the municipality was incomparable. “Based on our observations, there has been a duplication of authority and conflicts of authority between the Batam BPK FTZ and Batam municipal administration, making this region unable to develop. The mission [of the institution] to lure investors from Singapore also has not run as expected,” Tjahjo said in the provincial capital of Tanjung Pinang on the sidelines of the inauguration of acting Riau Islands governor Nuryanto. Tjahjo said the dissolution of the Batam BPK FTZ had been approved in a recent Cabinet meeting. The move, he said, would be sped up with the issuanc e of a government regulation, as issuing a law would take longer. Tjahjo also said that the existence of the Batam BPK FTZ, which was previously named the Batam Authority, was no longer effective according to an evaluation conducted by President Joko “Jokowi” Widodo’s administration last year. “Batam has long been receiving special facilities. It’s now time to end it,” he said. He said Jokowi had been very supportive of the policy as the President had for a long time shared the concern about the performance of the Batam BPK FTZ. “That’s the point. Many investors have run away [from Batam]. The Singaporean government, meanwhile, is expecting to partner with Riau Islands,” he said. With regard to the employees of the Batam BPK FTZ, who amount to over 2,000 people, Tjahjo expressed optimism that the problem would be handled next year. Batam BPK FTZ head Mustofa Widjaja, meanwhile, declined to comment on Tjahjo’s statement regarding the planned dissolution of his institution. Mustofa underlined that the Batam BPK FTZ, which was established in 1971, was a strategic partner for the municipal administration. “Both mutually need each other,” he said. Batam refers to both an island and municipality in the Riau Islands. The Batam metropolitan area consists of three main islands — Batam, Rempang and Galang — all connected by the 642-meter Barelang Bridge. Home to more than 1 million people, Batam is also the third largest city in Sumatra after Medan in North Sumatra and Palembang in South Sumatra. Govt to dissolve Batam free trade zone authority in 2 16 Fadli, The Jakarta Post, Tanjung Pinang | Archipelago | Thu, December 31 2015, 3:09 PM Editor's Choice Business National Archipelago Jakarta World Sports Search
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Transcript of Government to Dissolve Batam Free Trade Zone Authority in 2016 _ the Jakarta Post
7/23/2019 Government to Dissolve Batam Free Trade Zone Authority in 2016 _ the Jakarta Post
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1/5/2016 Govt to dissolve Batam free trade zone authority in 2016 | The Jakarta Post
http://www.thejakartapost.com/news/2015/12/31/govt-dissolve-batam-free-trade-zone-authority-2016.html 1/3
News Views Life Outlook 2016
Home Minister Tjahjo Kumolo announced on Wednesday that the centralgovernment was planning to dissolve the Batam Free Trade Zone
Authority (BPK FTZ) next year to end the duplication of authority in RiauIslands province’s most developed region.
Tjahjo said data showed that for the last 10 years the government hadlost Rp 20 trillion (US$1.4 billion) in potential tax revenue from Batam,while the investment value entering the municipality was incomparable.
“Based on our observations, there has been a duplication of authorityand conflicts of authority between the Batam BPK FTZ and Batammunicipal administration, making this region unable to develop. Themission [of the institution] to lure investors from Singapore also has notrun as expected,” Tjahjo said in the provincial capital of Tanjung Pinangon the sidelines of the inauguration of acting Riau Islands governor Nuryanto.
Tjahjo said the dissolution of the Batam BPK FTZ had been approved ina recent Cabinet meeting.
The move, he said, would be sped up with the issuance of a governmentregulation, as issuing a law would take longer.
Tjahjo also said that the existence of the Batam BPK FTZ, which waspreviously named the Batam Authority, was no longer effectiveaccording to an evaluation conducted by President Joko “Jokowi”Widodo’s administration last year.
“Batam has long been receiving special facilities. It’s now time to end it,”he said.
He said Jokowi had been very supportive of the policy as the Presidenthad for a long time shared the concern about the performance of theBatam BPK FTZ.
“That’s the point. Many investors have run away [from Batam]. The
Singaporean government, meanwhile, is expecting to partner with RiauIslands,” he said.
With regard to the employees of the Batam BPK FTZ, who amount toover 2,000 people, Tjahjo expressed optimism that the problem would behandled next year.
Batam BPK FTZ head Mustofa Widjaja, meanwhile, declined to commenton Tjahjo’s statement regarding the planned dissolution of his institution.
Mustofa underlined that the Batam BPK FTZ, which was established in1971, was a strategic partner for the municipal administration.
“Both mutually need each other,” he said.
Batam refers to both an island and municipality in the Riau Islands. The
Batam metropolitan area consists of three main islands — Batam,Rempang and Galang — all connected by the 642-meter BarelangBridge.
Home to more than 1 million people, Batam is also the third largest city inSumatra after Medan in North Sumatra and Palembang in SouthSumatra.
Govt to dissolve Batam
free trade zone authority
in 2 16
Fadli, The Jakarta Post, Tanjung Pinang | Archipelago | Thu, December 31 2015, 3:09 PM
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1/5/2016 Govt to dissolve Batam free trade zone authority in 2016 | The Jakarta Post
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Paper Edition | Page: 5
Riau Islands’ Batam, Bintan and Karimun islands, meanwhile, are hometo hundreds of premium resorts and shopping establishments, largelybecause of marine tourism and accessibility from Singapore.
Data from the Central Statistics Agency (BPS) showed that Batam,Bintan, Karimun and Tanjung Pinang were the dominant destinations inthe province with 1.1 million, 230,000, 71,000 and 66,000 foreign touristsvisiting each area, respectively, during September this year.
Read also:· Islands in focus: Closure of free healthcare program protested· Islands in focus: Unpad initiates cross-study program· Islands in focus: Civil servants absent after New Year holiday· Hundreds of villages in N. Sumatra left in the dark· 19 die at former mining sites in East Kalimantan
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I am nonplussed to read a loss of US$1.45 billion in tax revenue in Batam over a 10 years’ period- as per Home Minister Tjahjo Kumolo. How he derived at this figure is mind boggling because thefact remains esp. for Batam Island, that the Ship building industry (starting with McDermot’smassive operations on the island in 1998) together with about 200 shipyards and offshore marinerelated companies (over 10 years) provided massive amounts of taxes to the CentralGovernment.
Add in the taxes paid by Foreign Manufact uring Companies that were housed within and outsidehe Batamindo District, plus those taxes paid by foreign and local employees, the sum total would
surely have exceeded US$1.45b..
The BPKFTZ is the brainchild of Ex. Pres.Habibie.
It is in recent times that the shipbuilding industry became sluggish due to the Govt’s legislation of he Cabotage Laws.
LUWANTO
31 Dec 2015
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