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Print This Article Migrant Workers in a Corner of the Growth Triangle By: Ace Partadiredja Introduction opments in Batam have progressed at a Twenty kilometres southeast of significant pace. Singapore, or about 25 minutes by ferry, Approved foreign investment in there is an Indonesian island, Batam. This Batam topped US$ 295 million in 1990 415 sq km island, with reddish yellow while approved domestic investment in podzolic soil, is agriculturally good for creased by seven-fold, from Rp 53 million nothing but tropical shrubs, snakes and in 1989 to Rp 354 million in 1990. Singa monkeys, and some would add, is finan pore is still the main foreign investor in cially a loss to the Indonesian government. Batam; Indonesian investors, notably the Until the mid-1970s, this island was rather SalimGroup,have alsomadetheirpreserice tranquil, somewhat backward, and like the felt on the island. The investments, foreign other islands in Riau, was practically un andlocal, havelargely goneinto real estate, inhabited except by a handful of farmers tourism and electronics. All the same, and fishermen. growth has accurred on all fronts. In December 1989, the then Deputy This paper is intended to expound Prime Minister of Singapore Goh Qiok the issues and prospects in supplying Tong put forward the idea of a Growth workers, especially at lower skill levels, to Triangle involving Singapore, the nearby the flourishing manufacturing sectoronthe Malaysian state of Johor and the Indonesian island. It is also envisaged that the lessons island of Batam. Malaysia and Indonesia learned through the Batam experience can haveendorsedtheGrowthTri angleconcept be applied to the other parts of Indonesia. ASS 600 million jointventure to develop The next section of this paper offers a an industrial paric on Batam island was historicalsketchofisland'sdevelopmentas announced in January 1990. In July 1990, well as an outline of the comprehensive an Indonesian working group was formed master plan for Batam. The third section. -to coordinate the development of Riau Province. On28 August 1990, aMemoran- *) The authors would like to thankthe officials dum ofUnderstanding was signed between of Batamindo Industrial Management Pte Ltd for their assistance in this project.Theywouldalsoliketo express Indonesia and Singapore to promote the theirgratitude toSingapore EcononicDevelopment Board development ofRiauProvince. Thedevel for arranging the sitevisit to the BatamIndustrial Park. Prof Dr. H. Ace Partadiredja adalah Dosen Fakultas Hconomi UGM YogyakatU dan Universitas Nasional Caroline Yeoh,S ingapura. whichforms the coneofthis research project, tourist activities. analyses the profile and other characteris Batam's rapid development, how tics ofthe workers, their reasons for taking ever, did not begin until the mid-1970s. up employment in Batam, and their ThefirstmasterplanforBatam wasprepared expetations. The lessons that can be drawn by Nissho-Iwai, a Japanese consultancy from this projectare discussed in the fourth firm, and Bechtel ofthe United States. The section while the concluding remarks are study was commissionedby the Indonesian taken up in section five. state-owned oil company, Pertamina, to A questionnaire survey was con develop the island into a base foroil and gas ducted over a two-month period, from exploration, and related downstream February to March 1991. The respondents processing activities. The marine bases at were, at that time, undergoing training in Batu Ampar and Sekupang are the resultof Singapore before taking employment with thisinitiative.The masterplan was approved various companies in the Batam Industrial by the President, who concurrently issued Park. Five hundred questionnaires were Decree No. 41 of 1973, which provided for sent through Batamindo Industrial Man the establishment of Batam island as an agement Pte Ltd. A total of 498 question industrial area. naires were returned, duly completed. This By the late 1970s, it was clear to represents a response rate of 99.8%. Indonesian planners that Batam can offer Before we move on to discuss our more than justlogistic bases forthe energy research findings, an overview of the de industry. The original master plan was re velopmentson Batam island is presented in viewed by an Americanconsultant; CRUX thenextsection. This is to facilitate a better in 1977. This study considered the decline appreciation of the manpower issues fea in oil and oil-related activities, and rec tured in this paper. ommended guidelines for a more broad- based development of the Batam Island. The Transformation of Batam Thedevelopmentstrategyembraced a wider Unlike the mainland (RiauDaratan) visionoffuture growthfor the island, which of Riau Province, the 3.214 islands of the is strategicallylocatedsome 20km southof Riau archipelago {Riau Kepulauan) are Singapore. Studies were conducted to help muchunderdeveloped, sparsely populated, develop Batam into an industrial, commer but potentially rich in mineral resources, cial and tourist centre as well as to expand tourist spots, and strategically located. its traditional role as a warehousing and Batam is one of them. Batam's geographi transhipment centre. cal positionat the crossroadofinternational A new Presidential Decree, No. 45 shipping routes between the Indian ocean of 1978, was issued to encourage the de- andPacific ocean, makes it,like Singapore, velopmentofexport-oriented industries and a strategic site for the processing and dis to streamline the importation of materials tribution of commodities, and its close required by manufacturing industries on proximity to Singapore underscores its the island. Thecniire island was designated potential as a centre formanufacturing and as a bonded zone. In 1979, a review of previous planning studies led to Uie fomiu- Baiu Ampar area, in the north, has been lation of a comprehensive master plan for designated forlight and medium industries the island up to the year 2006. as well as transhipment activities; the The 1979 masterplan focused on the Sekupang area, as a centre for agro-based development oftranshipment facilities, the industries, and for export processing and establishment of industrial estates, the de transhipment activities; The Tanjung velopment of areas for the import and ex Uncangpeninsula(southeastofSekupang), port of goods, the construction of tourist as acomplexfor wood processingindustries; activities and the provision of the east coast asthe main industrial complex infrastructural support such as offices, for light and medium industries; and, the shoppingcentres, recreational facilities and Nongsa area, in the northeast, as a holiday residential units. The masterplantakes into resortand touristcentre. Batam Centre will account Batam's relations with Singapore be the island's administrative and com in almost every aspect. In particular, it mercial hub. focused on Singapore's almost exhausted The Batu Ampar area, comprising capacityfor furtherecpansion which would, the sub-regions of Batu Ampar and Muka of course, be Batam's comparative advan Kuning, is being rapidly developed into a tagefor thefuture. Atthesametime, Batam region for light and medium-scale indus is well-positioned to take advantage of tries. Some 30 to 40 industries, mostly of Singapore's established business and fi medium size, will be accommodated in the nancial services network as well as the city- planned industrial zone. Some existing state'sefficientfacilitiesforcommunication, heavy industries, situated for the most part transportation and other services. Batam's close to the present harbour facilities, are potential as an investment location is now also located in this area. duly recognised: Mukakuning, a landlocked area ad "Batam is extremely attractive for jacentto Batu Ampar, will also be used for industrial, trade and tourist enterprises due light and medium industries, government to its strategic location and its very close and commercial offices and housing. A proximity to Singapore's excellent trading, large scale industrial development project banking, transport and business service taking shape in the Mukakuningsub-region facilities". is the 500-hectare Batam Industrial Park. Professor Dr Ing. B.J. Habibie The Sekupang region, comprising (Indonesian State Minister for Research Sekupang, Tanjung Uncang and Sagulung, and Technology). has alreadyundergonesignificantdevelop ment. Office buildings have been con The 1979 comprehensive master structed, water supply lines have been in plan, which servers as the buleprint for stalled, and electricity generation and Batam's development to the year 2006, transmission system have been laid down. divides the island into four major devel This zone will be the focal point for a core opment areas, with each region playing a of lighl-to-medium sized industries. The different role in Batam's development. The development plan for Sekupang includes provisions forsmall-scaleshipy^andship Tering Bay,isbeingdeveloped into admin repairindustries, agricultural activities and istrative and commercial coreofthe island. fisheries. The port facilities at Sekupang Batam Centre is set. to be the downtown are being expanded to service the island's area of the island, containing government export-based industries as well as inter- offices, educational institutions, shopping island trading, cattle exporting, tranship centres,commercialcomplexes,hotels, and ment and other shipping activities. leisure and recreationfacilities. Residential AS$ 1billionpropertydevelopment districts will be arranged around this urban project,
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