ABSTRACT
Special Economic Zones (SEZ) and the Free Trade Zone (FTZ) in Batam face governance and investment challenges that hinder progress toward development goals. This study investigates governance inefficiencies in accelerating investment, aligning with Sustainable Development Goals (SDGs) No. 9 (Industry, Innovation, and Infrastructure) and No. 16 (Peace, Justice, and Strong Institutions). Using a systematic literature review, in-depth interviews (IDI), and focus group discussions (FGD), the study identifies key issues such as overlapping regional development policies, weak leadership competence, governance limitations, insufficient local ownership, and unclear land pricing regulations. The study draws insights from the successful SEZ model in Shenzhen to address these challenges. Recommendations include reforming land and lease regulations, providing competitive tax incentives, investing in infrastructure, and developing integrated policies. Establishing a joint planning committee and implementing a comprehensive infrastructure plan can resolve policy overlaps. Additionally, granting greater autonomy to the SEZ, revising leadership policies, and strengthening local ownership through joint ventures and public-private partnerships are essential strategies for accelerating investment and fostering sustainable economic growth in Batam.
