Singapore – Batam, Bintan Special Economic Zone: Will that lift our fortunes?

What is a special economic zone? What is a free trade agreement (FTA)? How does our economy flourish by establishing special economic zones (SEZ) with Indonesia (Batam and Bintan). Our contributor, Justin Lee discusses the implications of such economic activities that will help those who are looking for entrepreneurial opportunities out there.

Contributed by Justin Lee

Today, Singapore’s Prime Minister Lee Hsien Loong signed an agreement to setup a Special Economic Zone (SEZ) in Batam and Indonesia with Indonesian President Susilo Bambang Yudhoyuno.

The Indonesian leader described the signing of the agreement as a historic event.

It is hoped that Batam, Bintan and Karimun will regain its status as the thriving hub of business activity that it once was.

With keener competition from China, India and Vietnam, many companies moved their operations away from places like Batam, and the business climate there began to freeze in early 2000.

Not bad, I like this idea. I think this agreement underscores our understanding that we are getting expensive and that any successful global city requires a vast hinterland and cheap sources of production.

Singapore has always recognized that we are small and our approach has always been to go virtual.

That’s why we’re working on so many Free Trade Agreements. Because it’s our only salvation. It helps us to expand our boundaries “virtually”.

Just look at the following list of FTAs that we’ve signed:

• ASEAN Free Trade Area
• Australia
• European Free Trade Association
• Hashemite Kingdom of Jordan
• India
• Japan
• Korea
• New Zealand
• Panama
• Trans-Pacific SEP (Brunei, New Zealand, Chile, Singapore)
• United States

And the following that are in the works:

• ASEAN & the People’s Republic of China
• ASEAN-Australia and New Zealand FTA
• ASEAN-India FTA
• ASEAN-Japan Comprehensive Economic Partnership (AJCEP)
• ASEAN-Korea FTA
• Bahrain
• Canada
• Egypt
• Mexico
• Pakistan
• Peru
• Sri Lanka
• State of Kuwait
• State of Qatar
• United Arab Emirates

(I took this from fta.gov.sg)