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

October 28, 2024

Hang Nadim International Airport in Batam has officially opened a new flight route connecting Batam City, Indonesia, with Incheon, South Korea. The opening of the Batam-Incheon route is part of a broader strategy to enhance Batam's international accessibility and support economic and tourism development.

The BIB Chief Executive Officer Pikri Ilham Kurniansyah, explained that the flight from Incheon to Batam would take around 6.5 hours. Currently, flights are scheduled three times a week, before the winter season. Starting from Oct. 27, 2024, the frequency will increase to four times a week, with plans for daily flights in the summer of 2025.

"Today's inaugural flight [soft launch] carried 68 passengers with 30-day visitor visas. The official flight schedule will begin on Oct. 17, 2024, although system updates are still pending," Pikri said.

This flight operates under a codeshare system, where two airlines share the same flight. Jeju Air serves as the operating carrier, while Lion Air is the marketing carrier. Through this business agreement, Jeju Air tickets in Indonesia will be managed by Lion Air, allowing passengers to purchase Jeju Air tickets through Lion Air's system.

In this partnership, Jeju Air handles flight operations, while both airlines, Jeju Air and Lion Air, collaborate on ticket marketing. Although the flight code is shared, Jeju Air fully manages the operations.

This new route is also expected to enhance connectivity between Indonesia and South Korea. Incheon Airport, as a major international hub, serves over 70 million passengers annually and connects to more than 200 destinations worldwide. With this direct connection, Batam will be further integrated into the global aviation network, facilitating the mobility of tourists and business travelers.

To provide some context, more than 340,000 South Koreans visited Indonesia annually in 2023, with Bali and Jakarta as the main destinations. With the opening of this route, Batam has the potential to become a new destination for Korean tourists, especially because of its strategic location near Singapore.

Overall, the opening of the Batam-Incheon route is not only a strategic step to strengthen international connectivity; it will also have a significant positive impact on the economy, tourism and investment in Batam and Indonesia as a whole.

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