Province

Riau Island

Overview Economy

Riau Islands, a gateway in the Malacca Strait

Situated in the northern region of Indonesia, near the meeting point of Malaysia and Singapore, is the province of Riau Islands. Among the youngest provinces in Indonesia, it was formally introduced as a separate province from Riau in 2002, becoming the 32nd province in the country. Made up of more than 3.000 islands, the province offers a blend of cultural diversity, ecological beauty, and economic vitality.

With a population of 2.18 million people residing in the Riau Islands as of 2023, the province is home to several ethnic groups, such as the Malays, Bugis, and Chinese, whose customs are woven together to create the province’s cultural tapestry.

A variety of ecosystems fill the Riau Islands, including beaches, mangrove forests, and coral reefs. Notably, Bintan Island, within the province, is a popular vacation spot known for its scenery and historical monuments. As the Riau Islands attract tourists, the province is committed to eco-friendly and responsible tourism, aligning with efforts to protect its natural treasures.

The capital of Riau Islands, Batam, is distinguished by its combination of modern urban life with the natural environment. The city achieves this through its contemporary architectural style, which caters to commercial interests in the port sector without sacrificing the allure of the tropical shoreline.

Show more

Economic uniqueness

The Riau Islands have recorded a positive trend in their Gross Regional Domestic Product (GRDP), reaching Rp 180 trillion in 2021 and increasing to Rp 190 trillion in 2022, and Rp 200 trillion in 2023. In 2023, the processing industry sector made the largest contribution to the GRDP at Rp 81 trillion, followed by the construction sector with Rp 38 trillion, and the trade sector with Rp 16 trillion.

Subsequently, the province has emerged as a major economic force, capitalizing on its advantageous location near crucial international shipping lanes. Batam, the provincial capital, has drawn investments in electronics, shipbuilding, and manufacturing, transforming itself into an industrial and economic center. The province's standing as a major player in the regional economy is further solidified through its participation in the Batam-Malaysia-Singapore Growth Triangle.

Strategically fostering economic activity, the province has established free trade zones, such as the Batam Free Trade Zone, which has been essential in promoting economic activity and international direct investment. This has made the Riau Islands an appealing location for both domestic and international firms, offering investment incentives such as tax cuts and streamlined bureaucratic procedures.

As an archipelagic province, the Riau Islands' economic activity is intricately linked to maritime connectivity. The province facilitates trade and transportation between Indonesia, Malaysia, and Singapore by acting as a marine gateway. Subsequently, ports and harbors are seeing ongoing infrastructure enhancements to improve maritime connections, facilitate commercial operations, and attract additional investment.

Moreover, the Riau Islands have shown a positive trend in economic development over the past three years, with year-over-year (YoY) growth rates of around 3.43 percent in 2021, 5.09 percent in 2022, and 5.20 percent in 2023. A key element supporting this growth, especially in the aftermath of the COVID-19 pandemic, is the increased number of international visitors to the province, with figures reaching 758,154 visitors in 2022 and 1.5 million visitors in 2023.

Show more

Latest News

April 6, 2026

The Singapore Manufacturing Federation (SMF) is encouraging more healthcare and electronics companies to expand their operations in the Batam, Bintan, and Karimun (BBK) area of Riau Islands Province. This aligns with Indonesia's efforts to develop new industrial areas to support the manufacturing sector and improve port connectivity between the two countries.

Singapore has been one of the largest foreign investors in the BBK area, having been the largest foreign investor in Batam City since 2023. In the first half of last year, Investments from Singapore to Batam City reached S$617.3 million, or Rp 8.08 trillion (at Rp 13,100 per S$1) according to Channel News Asia on Mar. 28, 2026. This amount is equivalent to 69 percent of total foreign investment in Batam City.

In a regional investment seminar on Mar. 24, 2026, the SMF reminded manufacturers to consider several factors before expanding overseas. SMF Vice President Melvin Tan stated that electricity reliability varies from region to region, so businesses need to understand energy constraints and needs before investing.

The BBK area is approximately a 40- to 90-minute ferry ride from Singapore. The region of Riau Islands is also part of the Singapore-Johor-Riau growth triangle economic partnership, proposed in 1989 by then-Singaporean Deputy Prime Minister Goh Chok Tong.

This initiative combines Singapore's strengths in management, technology, and infrastructure with the labor, land, and natural resources of the State of Johor, Malaysia, and Riau Islands. This concept remains relevant today, especially with the advent of new initiatives like the Johor-Singapore Special Economic Zone.

Currently, the BBK area has at least five special economic zones focused on several industries, including healthcare, electronics, and aviation. These zones offer tax incentives, ease of licensing, and infrastructure to attract foreign investors.

Companies operating there span the manufacturing, logistics, information technology, and data center sectors. A "twinning" strategy is implemented in the partnership between Singapore and the BBK area, where headquarters and research facilities are located in Singapore, while large-scale manufacturing and digital operations are located in BBK due to more efficient land, labor, and utility costs.

Read more
February 24, 2026
December 22, 2025
November 6, 2025
September 19, 2025
July 28, 2025
June 30, 2025
June 4, 2025
May 9, 2025
Load more