Fadli, Batam – Unemployment has risen significantly on Batam, Bintan and Karimun islands, following the departure of several major foreign companies from the area and the government's prohibition on the lucrative sand export business.
"The relocation of those companies and the official prohibition on sand exports have resulted in a significant number of local workers suddenly losing their jobs, thus contributing greatly to the swelling unemployment rate in the area," said the chairman of the Riau Islands provincial chapter of the Association of Indonesian Entrepreneurs (Apindo), Abidin.
On Bintan alone, he said, at least six major foreign companies had closed down their operations. "Similar things have taken place on Batam, while on Karimun a large number of granite factories have closed down," he said.
The government's prohibition on sand exports has forced many Karimun-based sand exporters to close up shop and fire employees. "The problem is further aggravated by the fact that many medium-sized companies – those with fewer than 100 workers – have left the three islands," he said.
According to data from Apindo, unemployment on Batam from January to September this year reached 180,000 people, or 30,000 more than the whole of 2006. On Bintan and Karimun unemployment has doubled since 2006. On Bintan the unemployment figures stands at 75,000 and on Karimun it is 8,000.
"In total we have over 263,000 unemployed individuals in these three regencies," said Abidin.
These three island-regencies have been designated by the government as a Free Trade Zone, and are expected to be the driving force for Riau Islands province.
"It's ironic that this designation did not automatically resolve the prevailing problems of lack of employment opportunities. On the contrary, the unemployment rate has increased in this special (economic) area," said Abidin.
He worried the unemployment problems in the area could trigger social problems, including a rising crime rate.
The governor of Riau Islands province, Ismeth Abdullah, does not share Abidin's concerns. Abdullah said companies in the special economic area would begin to provide more job opportunities not only for residents of the three islands but the province as a whole.
"We are quite optimistic that in the next five years Riau will receive up to US$15 billion in business investment. Such a huge investment will provide employment opportunities to several hundred thousand people, which would resolve our current problem with unemployment," he said.