Friday, March 14, 2008

Special Economic Zones, Free Trade Zones, Free Port Zones, and Batam

I was in Batam two days ago for discussion about the SEZ,FTZ,FPZ, and especially related with Batam. What I got about the discussion on Batam was, the economy has grown above national level as naturally taking advantage of its location, but the politic problems which probably make this place will become messy. The politic problems are ranging from global, regional, national, and local politic that have potentials disturbing the economy. When dealing with global and regional politic, there was a conspiracy theory that I could not find the empirics or rational explanation behind the theory. What I found were the national and local politic that probably the most potential dangerous problems in disturbing the growing of Batam.

I said that this kind of place is like a “region state”, as Keinichi Ohmae stated, as my quotation in the first place of the discussion:

“Region states are not-and need not be-the enemies of central government. Handled gently, by federation, these ports of entry to the global economy may well prove to be their very best friends”

(Kenichi Ohmae, The End of Nation State: The Rise of Regional Economies, 1995, page 100).

Regions state such as Batam, Johor, Singapura; Guangdong, Hongkong, Taiwan; and other regions that reflect the economic cohesion and taking advantage each other for economic prosperity, but not in the same national or country.

The policy maker should open their eyes that in the future, when the barriers of trade among countries significantly decrease, the international trade policy perspectives will move to what so called “economic geography or economic regional perspectives”. It means that location advantage (including transportation cost), economies of scale, and agglomeration will become the most attentions of the business. The potential regions (such as the region in the regions state) should be used in taking advantage of its locations and become the hinterland or connectors to the other Indonesian regions. And China has applied the perspectives since 20 years ago by developing SEZ (Special Economic Zones) and then entering WTO in 2001, which means China put the economic geography/regional economic first before moving to the international trade. And the result: China is shaking the world both for good and bad perspectives.

Posted by Maddaremmeng Panennungi at 04:01:31 | Permalink | Comments (3)