Implementation of Free Trade and Free Port Policy in Investment Improvement at Batam City Riau Islands Province

Abstract

The research aims to analyze how the implementation of free trade zone and free port policies in Batam City increases investment, as well as to analyze the supporting and inhibiting factors of policy implementation, in order to formulate a model for the implementation of free trade zone and free port policies to increase investment. The policy implementation theory referenced from Meter and Horn (1975) includes dimensions such as policy standards and objectives, resources, characteristics of the implementing agency, inter-organizational communication, attitudes of policy implementers, and the socio-political and economic environment. This research uses a descriptive qualitative method with primary data obtained through observations and interviews with informants from the Batam Authority, private sector, and local community. The data analysis technique uses descriptive analysis techniques, which include data reduction, data presentation, and drawing conclusions. The research findings conclude: 1) The implementation of the free trade zone and free port policies to increase investment in Batam City has not been optimally implemented, described from the following perspectives: a) the substance and objectives of the policy have been understood by all policy implementers, b) policy resources are not supported by sufficient human resources and budget resources, c) there are many fragmented authorities across several related institutions, d) communication between organizations has not been intensively carried out and the activities of policy implementation have not been intensively conducted, e) active community involvement is still low, f) implementers' attitudes show conflicts of interest; 2) The policy implementation is supported by clear regulations and policies, support from local and central governments, political stability and security, and support from the private sector. The inhibiting factors include fragmented authority and weak coordination, complicated and inefficient bureaucracy, lack of competent human resources, limited infrastructure, lack of community participation, and limited budget; 3) The researcher designed a policy implementation model for the free trade zone and free port to increase investment, developed from Meter and Horn (1975), which is believed to improve the optimization of the free trade zone and free port policy implementation. The innovation lies in the addition of leadership and collaboration dimensions to complement the existing model, making it relevant and contextual with the conditions in Batam City.