18 - The Riau Islands: Setting Sail?

Summary

INTRODUCTION

This publication is the third in a trilogy that focuses on the Singapore-Johor-Riau Islands or SIJORI Cross-Border Region (CBR). The first of the series, The SIJORI Cross-Border Region: Transnational Politics, Economics, and Culture, takes Singapore as the anchor-point for the composite entity. In contrast, this volume on the Riau Islands and its predecessor on Johor focus on the other two territories in the Cross-Border Region. They explore how these are influenced by their belonging to a larger political entity—Indonesia and Malaysia, respectively—yet are also shaped by their connections to their neighbours.

This volume takes 1990 as a point of departure. Seeking to capitalize on flows of foreign direct investment (FDI) in the manufacturing sector, policymakers in Indonesia reduced the regulatory burden on business and liberalized ownership restrictions. Propelled by the influx of capital from leading economies in Northeast Asia and elsewhere, the Riau Islands’ economy grew in size and complexity. In a very short period of time, Batam, and to a lesser extent Bintan, were drawn into a range of global production networks in the electrical and electronics sectors.

Driven by this investment, the Riau Islands’ economy grew at break-neck speed and very rapidly became a major site for manufacturing within Indonesia. Attracted by formal sector jobs, people from across the country came to the islands, increasing its population and ethnic diversity. Increased per capita income, connections to world markets, and a unique sense of identity led to a campaign to secede from the larger Riau province, and establish a new province, with Tanjungpinang as the capital.

Thirty years on, it is timely to revisit this developmental trajectory, explore the lessons learned, and then look forward. With this as a backdrop, the guiding questions for this volume are:

• • What can be said about the sustainability of the Riau Island's manufacturefor-export economic model, as well as measures implemented to catalyse the development of new sectors?

• • What have been the political, social and environmental effects on the Riau Islands of the rapid economic development seen since 1990?

• • How is the province influenced by developments within Indonesia as a whole, as well as dynamics within the SIJORI Cross-Border Region?