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Business Must Learn From Batam Unrest

Evi  Nurvidya  Arifin

Jakarta Globe, 1  May 2010

The labor rampage in Batam on April 22 indicated a last-ditch, desperate attempt by enraged Indonesian workers to fight wage discrimination, wage inequality and a feeling of injustice inside their company. The incident was isolated but the feelings are not. In the globalized economy, our citizens pay globalized prices for many goods and services, yet their income is decidedly local.

The Drydocks World Graha incident was just the tip of the iceberg. The firm is managed by Singapore-based Drydocks World SE Asia, a Dubai-owned firm, and employs tens of thousands of Indonesians and foreign workers.

The riot was sparked after a non-Indonesian supervisor allegedly made a racist statement, berating one of the Indonesian workers for making a mistake. Reading various news reports, it seems that the supervisor frequently uttered such racist statements to his subordinates. This insensitivity combined with pent-up unrest about issues of wage disparity to set off the workers .

There is one crucial feature about Batam: Its development rests largely on the backs of migrants, either those who come from throughout the archipelago or from other countries.
In 35 years, Batam has risen from an underdeveloped island populated by just 6,000-8,000 people into the globalized island economy of today. This is evident in the proliferation of malls and international hotels on the island. Batam has continued to be an emerging economy.

The city of Nagoya and port of Jodoh are primary hubs for retail, commerce and entertainment, while Batam Center houses the government administration and education offices. Tanjung Uncang has been planned and developed for shipbuilding and shipping industries. Here, Drydock World Graha is a key tenant. The number of dockyard operators in the island has grown to more than 70 firms.

Given this vibrant economic climate, Batam’s population has followed suit, skyrocketing over the last decade to more than a half a million residents — the vast majority of whom were born outside Batam. It is an exploding society of rich diversity with shallow roots.

How diverse is the society? Based on a study done by researchers, including this author, from the Institute of Southeast Asian Studies in Singapore, the putra daerah (native sons) of the island are mainly Malay and Chinese Indonesians. With the influx of migrants, these original inhabitants no longer even constitute a majority. The National Statistics Agency (BPS) shows that Malays, who are mostly Muslims, formed just 18 percent of the population in 2000. They are the second-largest ethnic group, superseded by the migrant Javanese at 27 percent. Chinese Indonesians form about 6 percent of the population and are the fifth largest ethnic group. Other influential migrants — including the Minangkabaus and Bataks — account for 15 percent each. The rest of the population consists of other ethnic migrants. In other words, Batam is an ethnic and religiously diverse migrant society, with all the cultural churn and friction that goes with that.

What makes the issues in Batam more complex is not only the presence of Indonesian migrants, but also foreign workers, who make up a significantly higher portion of the population in Batam than in the rest of Indonesia.

Such huge diversity should be kept in mind when doing business in Batam. Thoughtful consideration must be given to the multiple ethnic groups that reside on the island. Engagement with the locals should be done with tact and respect. Language differences can be another challenge. In the workplace, issues of pay equity should be addressed immediately rather than left to fester. This is how business is done anywhere.

In public spaces, cultural expression, especially foreign cultural expression, is not always a simple matter, and it should be managed carefully. Furthermore, a spirit of democracy has been flourishing in Indonesia, including in Batam.

New waves of immigrants will continue to arrive following the launch of the Batam, Bintan and Karimun Special Economic Zones in January 2009 by President Yudhoyono.

In addition to new economic opportunities, the free trade zones are expected to bring more foreign businesses seeking to reap the benefits of low production costs in the islands. But the recent riot ought to be a wake-up call for the importance of managing the diversity in Batam and other islands in the province. Economic inequality associated with ethnic and religious groupings can help create a fragile social and political reality. The success of the Special Economic Zones could be put in jeopardy by such a situation.

In Batam, ethnicity, religion and culture will become increasingly diverse. However, if managed and understood wisely, the diversity of ethnicity and culture will enrich the economic potential of the free trade zones. In newly democratic Indonesia, this will be a bonus for both Indonesian and foreign businesses.

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Filed under: Demography, economy, English, internal migration, international migration, , , , , ,

One Response

  1. Mulyana Sk says:

    Your analysis regarding Batam unrest is very interesting. Using very detail data on the population strucutre of Batam is very thoughtful, hopefully many parties realize the beautiful of the diversity of this island which will enrinch the economic potential rather than the other way round. Again, Congratulations for your article.MS

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