Eddy Satriya Deputy Assistant for ICT and Utility

BATAM INVESTMENT BREAKFAST WORKSHOP “Batam : Renewed Business Opportunities” Jakarta 2 September 2015

POLICY TRANSFROMATION

2010

2025

2045 • GDP: ~USD 15 - 17,5

Triliyun

• GDP per kapita ~USD

44.500 - 49.000 • GDP: ~USD 4 - 4,5 Triliyun • GDP per kapita ~USD

14.250 - 15.500

• GDP: USD 700 Juta

• GDP per kapita USD

3.000

Ranking ke 8 Ranking Ke 18 Ranking ke 12

MP3EI Dipersiapkan untuk menjawab tantangan global dan

mempersiapkan Indonesia sebagai negara maju di 2025

6.38% 6.17% 6.03% 5.58%

5.02%

4.10%

2.80% 2.20% 2.40% 2.50%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2010 2011 2012 2013 2014

GDP

Indonesia

Global

Indonesia Economy Growth

Source : BPS and WorldBank

On land aquisition (Law 2/2015):

• Provides clear procedure and time-line for land acquisition (including bottlenecks and disputes) for infrastructure projects such as roads, railways, ports, airport, dams etc;

• Establishment of special unit in National Land Agency for land acquisition acceleration and dedicated team for priority infrastructure projects, development of SOPs for every BPN activities etc;

• Dedicated fundings are allocated larger in related ministries to speed-up pending government commitments;

• To increase the flexibility on funding availability at any certain time, source of fundings from private sector is permitted. This is subject to an agreement (with the government) on how to compensate it afterward.

5

Efforts to Speed-up Infrastructure Provision (1/2)

Attracting private sector to invest in infrastructure:

• With recently stipulated presidential decree (38/2015) on PPP, tendering process is simplified (i.e. accelerated), more attractive and intensified gov’t support as well as guarantee, wider sectoral coverage (include social sector such as education and health), establishment of availability payments etc;

• Mining and Energy Minister’s decree 3/2015 provides a lot of simplified procedure for electricity investment (IPP’s) especially coal fired, gas, and hydro power plants

• Simplified procedures on getting licences and permits from National Investment Coordinating Board with the new establishment of the One Stop Service Center (PTSP in Indonesian language) on January 26th 2015;

• Special national committee is form (presidential decree 75/2014) to enhance the preparatory stages of strategic/prioritized infrastructure projects (namely, KPPIP). Chaired by the Coordinating Minister for Economic Affairs. In 2015, around 30 – 35 infrastructure projects (new and underway) are set for attention to be accelerated their implementation. 6

Efforts to Speed-up Infrastructure Provision (2/2)

80%

56%

7

Regional Development Policies

8

Increase of Indonesia’s middle income and elite groups to 2020

Where Would Be The Sensible New Economic Locations Outside Java ?

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Importance & Significance of Batam FTZ

• Its strategic location next to South East Asia economic global hub.

• Long span historic experience, has been proven as one of the center for Indonesia exports (during its prime contribute around 11 – 12 percent of Indonesia exports)

• With the increasing internal/local problems, Batam’s contribution has been reduced to around 5-6 percent.

• Still has competitiveness as national hub for some economic activities with regionally or globally importance

Batam’s competitiveness is

under pressure due to development of some

domestic issues as well as international

changing environment

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Batam In Global Supply Chain

Singapore:

• Roles:

Regional HQ

Regional Sales and

Marketing hub

Regional Logistics

hub

Low Cost Manufacturing Base:

Electronics Melaka strait connecting > 200 shiping line

interconnected with more than 600 port in 120

countries globally. Everyday, Singapore port handling more than 1000 vessel. (BP Batam)

Batam

12

Industry In Batam, An Example

TYPE OF INDUSTRIES IN BATAM OEM

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Industry Development Strategy In Batam

Source : Research by Frost And Sullivan

Future Agenda/Policies for FTZ Batam (1)

Led by the Central government, i.e. Coord Ministry of Economic Affairs

Transformation is to put forth more sensible institutional adjustment or setup that fits with the current context of a more decentralized government system

Revitalization program would consist of:

Revisit Batam’s strategy going forward in the context of Indonesia's national plan

Define the operational strategy for the new aspiration:

o Target sectors / sub sectors? (will be more focused)

o What is needed to win these sectors? e.g. location configuration, regulatory support, governance, etc

o What are some target companies?

Develop the high level business case for Batam

Costs and benefits for key zone stakeholders

High level capital/financing requirements

Layout the implementation plan forward for Batam 15

Need transformation and revitalized program !

Future Agenda/Policies for FTZ Batam (2)

1. Certified Expert/Professional to meet industrial need.

2. Policy and infrastructure for the workforce training;

3. Policy to foster the Start-up and SMEs based innovation and technology;

4. Supporting environment for innovation and technology development applicable to industries;

5. Venture capital to support the Start-up and SMEs based innovation and technology.

Batam required policy and infrastructure to foster high value added industries

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Recent publications are

available on:

Eddy Satriya

• 1989 :Graduated from Bandung Institute of Technology (Telecommunication Engineering)

• 1997 :Graduated from University of Connecticut (MA in Economics)

• 1989-90: Program Management Consultancy (PMC-IV) for Telecommunication Development

• 1990-2005: Working in Bappenas (The National Development Planning Agency).

• 1995 : Secretary to Board of Commissioners of PT.Telkomsel

• 1997- present: Visiting Lecturer in University of Indonesia, University of Pelita Harapan, and ITB

• 2002-present : Actively writes various article and column in national papers and magazines.

• 2005 (Dec)-present: Working in Coordinating Ministry for Economics Affairs

• 2011 - Present: Head of International Cooperation Division, Secretariat of KP3EI

Contact: satriyaeddy@gmail.com eddysatriya@ekon.go.id 62.21.3511466 – t 62.21.3511464 – f

eddysatriya.wordpress.com

kolom.pacific.net.id