Government regulation in lieu of law No.1/2000 on Free Trade and Free Port Areas as already stipulated to become Law No.36/2000 stipulates a number of criteria for a region eligible to nominate to become free trade and port area, among others, location of the region.
The location of Batam in side of the world's busiest international trade line and important role as a gateway and front line of Indonesian economy constitute the main considerations for stipulating Batam to become a free trade and port area.
The unique and specific geographic location of Batam makes its position so central because it can be promoted to become gateway of investments, goods and service from other countries, which are useful for the enhancement of welfare of the Indonesian people. Besides a center of labor intensive industries capable of contributing benefits in the future developing industries having high added value, Batam also can be developed to become a collecting and distributing point of production from and to the whole territory of Indonesia as well as other countries. Given that the region is exactly located in the international shipping line, Batam can become a center of service for traffic of international ships. In addition, the position of Batam supported by Sumatra which had already developed facilitates the supply of manpower and facilities supporting the development of manpower skill.
In addition, land, infrastructure and supporting industries are also available adequately in Batam.
However, the most important consideration is the commitment of the regional government to implementing the management of free trade and port area. For purpose, it is necessary to issue a government regulation on stipulation of Batam as a free trade and port area with clear borders and security easily controllable and not affecting the environmental conservation in accordance with the National Layout Plan.
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The managerial right becoming the authority of the Batam Municipal Government shifts to the Management Board of the Batam Free Trade and Free Port Area after the Batam City Government relinquishes the managerial right.
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