BATAM’S Fall
Only in 1990 did the island start to take off as part of the Singapore-Johor-Riau ( SIJORI ) campaign along with its sister island Bintan. By utilizing its territories ‘ comparative advantages and good connection, this tripartite initiative courted foreign investment.  ,
Beyond worldwide campaign, the reform of limiting laws, especially those relating to equity thresholds and the ownership of business estates by secret sector operators, was the catalyst for investment in Batam. A number of electrical and electronics companies with offices in Singapore were established in the form of sponsors based in Singapore.
As politicians struggled to contain the effects of the Asian financial crisis of 1997, the SIJORI battle lost steam. However, the majority of the manufacturing activities that occurred in the 1990s continued to exist in the different SIJORI regions, demonstrating the financial potential of these cross-border systems.
Batam and Bintan’s economic fortunes were boosted even more in 2002 when the US-Singapore free trade agreement’s Integrated Sourcing Initiative made it possible for items purchased from the territories to be included in Singapore’s customs place for sale to the US. In 2009, all of Batam and a portion of Bintan became free trade zones (FTZ), allowing duty-free industry and goods.
In the following 20 years, Batam concentrated on its market as an export-focused gateway of production, much like Johor in the north. But, as major business relations crises hit the island, its appeal began to wane.
Many of the region’s electrical and electronics manufacturers emigrated as a result. Increased expense in the shipping and repair sectors was able to mitigate the impact. According to Batam’s FTZ standing, this wave, in turn, subsided according to overcapacity and selling heheuristics on the local market.
Batam’s economy is recovering after COVID-19 caused a decline in commerce. The island’s economy experienced a 2.5 % growth in 2020, but it returned to 4.8 % in 2021 and oscillated between 6.5 % and 7 % between 2022 and 2024. Thermal board, power generation, and silicon producers have all made investments in Batam. Apple’s commitment to spend US$ 1 billion to create AirTags on the island is its most notable accomplishment.
Its market has been further diversified by budding service industries like film and animation as well as data centers. SEZs that focus on the online market, health, and aerospace maintenance, repair, and procedure sectors should ideally help these green shoots and another target sectors. The Johor-Singapore SEZ also has a reputation for some of these businesses.