Province

Riau Island

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.

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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.

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Latest News

July 28, 2025

The Batam Free Trade and Free Port Zone Development Authority (BP Batam) recorded realized investments to Batam City, Riau Islands Province reached about Rp32 trillion in the first half (H1) of 2025, or more than 50.1 percent out of its Rp64 trillion annual target.

"The country of origin [for investment] is still dominated by China, followed by Singapore, Malaysia, the United States, and Japan," stated BP Batam Investment and Business Deputy Fary Djemy Francis in Batam City on July 18, 2025.

He added that Batam City's investment performance showed relatively optimal results in H1 2025. The economic sectors of the city which received the most investments are the electrical and electronics manufacturing, medical devices, as well as the computer components sectors.

Meanwhile, BP Batam Head Amsakar Achmad said that Batam has recorded 12.71 percent year-on-year (yoy) of average investment growth rate for the past five years.

"The most frequent concerns from investors are the speed of service, ease of requirements, and perceived complexity of the [investment permitting] process. The President has emphasized the need to restore Batam as a national investment hub," he added.

To that end, Amsakar said that BP Batam continues to simplify procedures to invest in Batam City and improve the investment permitting system, which include the launch of various digital innovations.

"What's important is [increasing] incoming investments, job opportunities, and economic growth. If those [increases] occur, the economic [performance of Batam City] from the upstream to downstream [sectors], could directly benefit the people of Batam," Amsakar said.

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