Batam is the largest city in the Riau Islands, and the eighth-largest city in Indonesia. Within the Riau Islands province (in bahasa Indonesia; Kepulauan Riau, or, commonly used acronym shortform; Kepri), it is also the most population dense, with a population of 1,141,816, reaching 1,482 people per square kilometre. By comparison, Tanjung Pinang, the next most populous city, has a population density of 834 people per square kilometre.
Administratively Batam city encompasses the main Batam island, as well as the two smaller islands on the south of it – Pulau Rempang and Pulau Galang. Attempts by the city government to rename Batam “Barelang” – an amalgamation of the three islands’ names – in the late 1990s were unsuccessful although a 50km-long bridge linking the three islands has retained the name.
Batam was historically insignificant until the 1970s when it was earmarked by the Indonesian government as a major industrial zone, unlike Bintan which was the cultural capital of the Johor-Riau sultanate in the 1500s to the early 1900s prior to Dutch colonisation,
Under the direct patronage of Ibnu Sutowo, then the head of national oil company Pertamina, Batam was selected to be developed as an oil and gas centre to rival neighbouring Singapore, which had just become independent in 1965 and was still struggling with poverty and endemic unemployment.
Ibnu Sutowo was the head of Pertamina between 1968 and 1976. A military officer by training, Sutowo was stationed in Palembang in 1945 fighting the Dutch. When Indonesia gained independence, he was appointed the head of Sumatra’s Sriwijaya army division; in 1956, he was promoted to the chief of army logistics. Sutowo stepped down from Pertamina in 1976 under allegations of corruption and mismanagement of the state-owned company, which by then had racked up debts of USD10.5 billion. He passed away in 2001.
Image source: Geni.com
Reporting directly to the president, Sutowo drafted the first Batam master plan which recommended a development strategy based on oil and gas exploration, and supporting downstream energy product processing activities. Yet by 1974, a global drop in oil prices led to cashflow problems in Pertamina and by 1976, Sutowo was forced into retirement under a cloud of corruption allegations.
The mandate to develop Batam was then taken over by Bacharuddin Jusuf Habibie (also known as BJ Habibie). An aerospace engineer by training, Habibie was recruited personally by then president Suharto as part of a national drive to industrialise and develop the newly independent Indonesia. Habibie initially served as special assistant to Sutowo at Pertamina before taking over Sutowo’s position at Batam Industrial Development Agency (BIDA) in 1978, and was also appointed Minister of Research and Technology.
Under Habibie’s watch, Batam managed to secure adequate funding to develop its infrastructure, including roads, airports and the Barelang bridge. Habibie envisioned Batam developing as an industrial hinterland of Singapore, which then was developing at a rapid rate and would soon require a cheaper location for its manufacturing facilities. By the late 1980s, this idea caught on and in 1989, Johor was roped into a trilateral growth agreement due to Singapore’s concerns that deepening bilateral ties between Singapore and Indonesia could affect the delicate regional diplomatic balance.
The concept was initially named the SIJORI (Singapore-Johor-Riau) growth triangle, but was later renamed and in 1994, was officially known as the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT). Besides Batam, the two other islands involved in the IMS-GT project were Bintan (earmarked as a tourism complex) and Karimun (earmarked as a ship-building and repair centre).
Like the rest of Indonesia, Batam was hit hard by the 1998 Asian Financial Crisis. Aside from experiencing a Asia-wide economic slowdown, Batam’s political stakeholders were also impacted. Accused of corruption and endemic mismanagement of the economy, Suharto was forced to step down as president in 1998 amidst widespread rioting in Jakarta. Habibie was then briefly appointed in his place, but also stepped down in 1999 due to a lack of support from his political party, Golkar.
Batam, together with Bintan and Karimun, were officially designated as Free Trade Zones (FTZ) in 2007 as part of an attempted revival of the IMS-GT scheme which had fizzled out since Habibie’s stepping down. As a FTZ, Batam benefits from tax exemption on imports and exports, and a less cumbersome process for foreign investments. But without a key political patron in the central government, wage increases, and overall uncertainty on the political future of the city – there have been talks for example, that the central government might revoke the FTZ status from Batam – industrial development in Batam has progressed in sputters.
Image source: Edis.sg
The Batamindo Industrial Park is the first industrial park on Batam and is a joint venture between Indonesia’s Salim Group and Singapore companies Jurong Environmental Engineering and Singapore Technologies Industrial Corporation (STIC). The park was opened in 2001 and hosts mainly companies manufacturing electronic products.
Chart source: BIFZA
According to the Batam Indonesia Free Trade Zone Authority (BIFZA), tourism was the largest contributor to the Batam economy in 2013, followed by the utilities sector. Manufacturing and industry, originally the mandate of Batam, comprised only 4% of the city’s economy
These statistics, however, do not take into account the unregulated, informal economy which is estimated to employ 70% of the national workforce throughout Indonesia. These informal activities are varied – from food vendors, day-wage factory workers, to unlicensed transport operators, and the adult entertainment industry.
Batam is also host to some amount of illicit activity such as smuggling. Forestry, plantation and quarrying products have reportedly been smuggled out from Sumatra and transited in Batam before being shipped abroad. Other items reportedly smuggled via Batam include pornography, drugs, firearms, used electronics and even used army uniforms from the Singapore Armed Forces.
Culture and people
Batam was an extremely attractive migration destination for Indonesians due to the number of job opportunities available, and also the minimum wage which was the highest compared to other parts of Indonesia.
Within a short period of 40 years, Batam’s population exploded nearly 33-fold from 31,800 residents in 1978 to more than 1.1 million today. By 1996, more than half the population of Batam were workers, of which 55,000 of the 127,000 residing on the island were employed by Batamindo Industrial Park, the first industrial park to open in Batam.
Most of Batam’s population growth can be accounted for by migration from other parts of Indonesia such as Java and mainland Sumatra. According to the 2015 Kepri department of statistics, most of Batam’s population is Muslim, with the second largest religious group subscribing to Protestantism.
People walking around Penuin market during the weekend. Batam is one of the most cosmopolitan cities in Indonesia due to the confluence of migrants all in search of a better future.
Nagoya Hill District: The Nagoya hill shopping centre and the area surrounding it, is a popular destination for both tourists and local Batamese alike. Although the mall itself is ageing, it still boasts one of the largest hypermarkets on Batam and one of the largest selection of restaurants. The spas in the shophouses outside the shopping centres are also popular among Singaporean tourists.
Pasar Penuin: Usually bustling in the early mornings, Pasar Penuin is a traditional wet market where locals obtain their weekly groceries. Expect to find the freshest agricultural produce and fish, which include the highly prized Indian threadfin. Hawkers selling breakfast kueh, fresh soybean milk and even fried noodles can also be found there should you be peckish after shopping.
Barelang Bridge: One of the technological achievements of BJ Habibie, the Barelang bridge is a series of five bridges connecting Batam island with the southern islands of Pulau Rempang and Pulau Galang. The entire chain of bridges is 50km long and took six years to complete.
Galang refugee camp: Located on Pulau Galang, the Galang refugee camp once housed refugees from Vietnam and other parts of Indochina towards the end of the Vietnam War. The refugees are no longer in the camp, which has been converted into a tourist attraction. Visitors can visit the compound, which includes a museum, prison block, classrooms, the Indonesian Red Cross Hospital and two houses of worship – a church and a buddhist temple
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- Kepri Department of Statistics, 2015 annual report
- Batam – whose hinterland (2013), by Sree Kumar and Sharon Siddique, p 36-7
- Hutchinson, F. E. & Chong, T.(2016). The SIJORI Cross-Border Region: Transnational Politics, Economics, and Culture . ISEAS–Yusof Ishak Institute. Retrieved May 15, 2017, from Project MUSE database. Pp 171