Government targets 10% economic growth as Batam evolves into a regional logistics and investment hub.
Batam is set for a major transformation with the inclusion of 14 additional islands into its Free Trade Zone (FTZ), expanding the area from 8 to 22 islands. The move aims to attract more investment, boost competitiveness, and reinforce Batam’s position as a strategic economic hub in Southeast Asia.
Batam’s Expanded Economic Role
The proposed revision to Government Regulation No. 46/2007 was presented during a public consultation by BP Batam on Tuesday (Aug 26, 2025) at Balairungsari. The consultation involved ministries, local government, businesses, academics, NGOs, fishermen, and traditional leaders.
Deputy for Energy and Mineral Resources Coordination at the Coordinating Ministry for Economic Affairs, Elen Setiadi, emphasized President Prabowo Subianto’s directive to strengthen Batam as a core economic driver. “Investment that cannot be absorbed in Batam can be optimized in surrounding areas,” he said, highlighting the target of 10% growth—double the national average.
Presidential Backing and Policy Framework
President Prabowo has instructed accelerated reforms, including streamlined permits, land resolution, and strengthened tourism. Earlier this year, the government issued PP 25 and PP 28/2025 to reinforce Batam’s role in logistics, manufacturing, and international trade. The latest revision will integrate both land and maritime zones into one cohesive FTZ framework.
Safeguards for Communities and Environment
BP Batam Deputy for Strategy and Licensing, Sudirman Saad, assured that community rights would be prioritized. “Residents already living in these areas will be recognized, and companies with existing land rights will retain them until expiry,” he said. Environmental protection and fishermen’s access to traditional fishing grounds will also be safeguarded.
Public Concerns and Feedback
During the consultation, participants called for protection of heritage kampung tua, mediation with private landowners, and stricter environmental safeguards for forests and marine ecosystems. BP Batam noted that all input would be integrated into the revised regulation.
Strengthening Regional Competitiveness
The expansion is expected to:
- Absorb larger-scale investments beyond Batam’s existing zones
- Create more jobs for local residents
- Enhance Batam’s role in the Johor–Singapore–Indonesia economic corridor
- Provide legal certainty for businesses through integrated FTZ governance
The expansion of Batam’s Free Trade Zone represents a bold step in Indonesia’s economic strategy under President Prabowo. While it promises stronger growth, more jobs, and greater regional connectivity, authorities stress the need to balance development with community rights and environmental protection. If successful, Batam could cement its role as a premier logistics and investment hub in Southeast Asia.
Sources: Gokepri (2025) , Batam Pos (2025)
Keywords: Batam Free Trade Zone, Batam Economic Growth, Batam 14 Islands, BP Batam Expansion, Prabowo Economic Policy
