Batam views Johor-Singapore SEZ as competition and an opportunity for economic growth.

The Batam Indonesia Free Zone Authority (BP Batam) has responded positively to the newly established Johor-Singapore Special Economic Zone (SEZ), viewing it as a strategic opportunity rather than a threat. Officials have emphasized the need to enhance Batam’s competitiveness through improved infrastructure and investment policies. Meanwhile, business leaders have urged the government to address energy costs to attract more investors.

On January 16, 2025, BP Batam responded to the agreement signed between Malaysia and Singapore to develop the Johor-Singapore SEZ. The initiative, which aims to strengthen trade and attract investment, has led to discussions in Indonesia about Batam’s economic positioning. BP Batam officials and business leaders have highlighted the need for competitive policies to ensure Batam remains an attractive destination for investors.

Johor-Singapore SEZ Recognized as a Strategic Opportunity

The Johor-Singapore SEZ agreement, which was signed by Prime Ministers Anwar Ibrahim and Lawrence Wong in early January, has been viewed as a significant development in regional trade. BP Batam’s Head of Public Relations, Promotion, and Protocol, Ariastuty Sirait, stated that this initiative has been perceived as a motivation for Batam to further enhance its economic appeal.

Batam’s SEZs Strengthened to Enhance Investment Competitiveness

BP Batam has acknowledged the need for policy refinements, infrastructure development, and strategic collaborations to ensure competitiveness. The city currently oversees three SEZs: Nongsa Digital Park and Batam Aero Technic, both launched in 2021, and the Batam International Health Tourism SEZ, which was inaugurated in 2024.

Indonesia’s Industrial Diversification Efforts Intensified

BP Batam has emphasized efforts to diversify the city’s industrial base. BP Batam has promoted key sectors such as animation, healthcare, the creative economy, technology, logistics, and renewable energy. International branding strategies have also been prioritized through investment forums and bilateral engagements.

Johanes Kennedy Aritonang, Deputy Chair of the Indonesian Chamber of Commerce and Industry (Kadin) for the Sumatra Region, has warned that energy costs in Batam could put the city at a disadvantage. It has been noted that natural gas from Natuna is exported to Singapore while Batam continues to rely on costly imports, raising concerns over the city’s ability to remain competitive.

Read More: Batam Welcomes Johor-Singapore SEZ as a Motivation, Not Threat

Coordinating Minister for Economic Affairs, Airlangga Hartarto, has acknowledged that Indonesia’s SEZ model has influenced regional developments. He has emphasized the need for Indonesia to remain competitive, stating, “We cannot bar other countries from copying us, but we must compete effectively against them.”

The establishment of the Johor-Singapore SEZ has prompted Indonesia to reevaluate its investment strategies for Batam. While BP Batam remains optimistic about the economic potential, business leaders have called for immediate government action to address energy costs and attract foreign investment. As regional competition intensifies, Batam’s ability to position itself as a prime economic hub will be critical.

Sources: Tempo, Antara News (2025)

Keywords: Batam Strategic Potential, Johor-Singapore SEZ, Regional Development Opportunities