Article Per Year (5 Year)
p-Index From 2021 - 2026
0.23
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All Journal PPSDP International Journal of Education
Sungkono Bayu Aji
Universitas Pertahanan, West Java, Indonesia
Education Languange, Linguistic, Communication & Media Mathematics Social Sciences Other

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Balancing Foreign Direct Investment and Minimum Wage Policy in Indonesia’s Batam Free Trade Zone: A SWOT Analysis Sungkono Bayu Aji; Guntur Eko Saputro; Suwito Suwito
PPSDP International Journal of Education Vol. 5 No. 1 (2026): PPSDP International Journal of Education
Publisher : Perkumpulan Program Studi Doktor Pendidikan (PPSDP)

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.59175/pijed.v5i1.905

Abstract

This study examines the complex relationship between foreign direct investment (FDI) and minimum wage policy as strategic factors in Batam, Indonesia’s largest Free Trade Zone (FTZ). Using a qualitative approach, we conducted a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis based on government regulations, secondary economic data (2015–2025), and industry reports. The findings reveal that while Batam’s strategic location, fiscal incentives, and labor abundance attract FDI, rising minimum wage demands driven by high living costs threaten its cost competitiveness relative to Vietnam and Thailand. Institutional dualism (local government vs. Batam Investment Agency) further complicates policy coordination. We conclude that Batam is shifting from a low-wage to a productivity-driven competitiveness model. Policy implications include the need for integrated governance, skill upgrading, and infrastructure investment to sustain FDI without suppressing workers’ welfare.
Co-Authors Guntur Eko Saputro Suwito Suwito