INTRODUCTION

Batam's economic growth has been nothing short of spectacular. In the 1990s, it experienced an investment boom fuelled by investments from Singapore. This lasted for two decades and transformed the economy and landscape of what was an outpost into a place with a major industrial city of over 1 million inhabitants.

This impressive pace of development has often been accompanied by a marked degradation of the natural environment. Mangrove areas have rapidly disappeared, floods have occurred around the city because of erosion caused by land clearing; illegal squatter settlements have intruded into protected forests, and toxic substances from the offshore cleaning of ships have affected the quality of Batam's coastal waters.

But all is not lost. Economic and environmental imperatives can be reconciled if Batam's development trajectory takes into account the impact of economic growth on the environment. Sustainable development is not impossible (Hezri and Dovers 2012, p. 277).

Negative environmental impacts have to be controlled by regulations and by proper enforcement. The institutional framework (regulations and property rights) plays a central role to ensure that negative environmental impacts are accounted for and minimized. Problems generally arise from either an absence of regulations or property rights to regulate the environment or from the absence or lack of enforcement by the relevant authorities.

The Riau Islands Province (PRI) is made up of five rural regencies (kabupaten) and two cities or urban municipalities (kota). Batam and Tanjungpinang are the two cities within PRI, while Bintan, Karimun, Lingga, Anambas and Natuna form the five regencies (Amri 2016, p. 155). Batam Island's land area totals 415 km2 (41,500 hectares).

This chapter will examine the various manifestations and causes of environmental degradation against the backdrop of economic transformation, population growth and enforcement (or lack thereof). It also provides a comprehensive update where possible of the present state of environmental affairs in the municipality, and the challenges involved in maintaining the carrying capacity of the environment to cope with development.

Following a discussion of the methodology used in this study, the next section will examine the impact of government policies on economic transformation, and of migration on population growth.

INTRODUCTION

The general election of 9 May 2018 was a watershed in Malaysian history. The Star newspaper described the outcome as a night when the “earth moved as one Barisan parliamentary seat after another tumbled …” (Star Online, 10 May 2018). Driven by rising dissatisfaction with the Barisan Nasional (BN) rule, a deteriorating economy, anger with corruption and the 1MDB scandal, and unhappiness with the goods and services tax (GST), different segments of Malaysians voted across racial lines “sweeping away what many people in the country have for long regarded as an invincible political behemoth” (Lim, Thayaparan, and Netto 2018, p. 3).

The shockwaves were not confined to states in Peninsular Malaysia, but also spilled over to East Malaysia. In Sarawak, the ruling coalition Sarawak Barisan Nasional (Sarawak BN) lost an unprecedented twelve out of thirty-one parliamentary constituencies. This was the first time that opposition parties secured more than onethird of the state's parliamentary seats, leading Pakatan Harapan (PH) to conclude that a Sarawak tsunami had occurred (Borneo Post Online, 10 May 2018).

Just as most observers were taken aback by Pakatan Harapan's stellar performance at the national level, the outcomes of the 2018 General Elections in Sarawak were unexpected. The Sarawak state election, held in 2016, had indicated strong backing for Sarawak BN, who won that election resoundingly. In subsequent months, the state government also made progress on a number of hot-button local issues, including negotiations of the Malaysia Agreement to restore Sarawak's rights, recognition of English as a state language, and recognition of the Unified Examination Certificate (UEC) (Star Online, 1 February 2018). Consequently, the sitting Chief Minister, Abang Johari Tun Openg, expected Sarawak BN to retain at least twenty-five constituencies, and possibly acquire an additional parliamentary seat or two.

The eventual political realignment after the 14th General Elections (GE-14) was momentous, as the component parties of Sarawak BN departed from the national BN coalition. At present, this grouping—named Gabungan Parti Sarawak (GPS)—is still in power at the state level. Abang Johari has stated that GPS “will cooperate and collaborate with the federal government for national interest, and state rights and interests based on the Federal Constitution and the Federation of Malaysia” (Lee 2018b). Where interests do not coincide, GPS can choose to go their own way and protect Sarawak's interests.

INTRODUCTION

Batam's economic growth has been nothing short of spectacular. In the 1990s, it experienced an investment boom fuelled by investments from Singapore. This lasted for two decades and transformed the economy and landscape of what was an outpost into a place with a major industrial city of over 1 million inhabitants.

This impressive pace of development has often been accompanied by a marked degradation of the natural environment. Mangrove areas have rapidly disappeared, floods have occurred around the city because of erosion caused by land clearing; illegal squatter settlements have intruded into protected forests, and toxic substances from the offshore cleaning of ships have affected the quality of Batam's coastal waters.

But all is not lost. Economic and environmental imperatives can be reconciled if Batam's development trajectory takes into account the impact of economic growth on the environment. Sustainable development is not impossible.

Negative environmental impacts have to be controlled by regulations and by proper enforcement. The institutional framework (regulations and property rights) plays a central role to ensure that negative environmental impacts are accounted for and minimized. Problems generally arise from either an absence of regulations or property rights to regulate the environment or from the absence or lack of enforcement by the relevant authorities.

The Riau Islands Province (PRI) is made up of five rural regencies (kabupaten) and two cities or urban municipalities (kota). Batam and Tanjung Pinang are the two cities within PRI, while Bintan, Karimun, Lingga, Anambas and Natuna form the five regencies. Batam Island's land area totals 415 km2 (41,500 hectares).

This paper will examine the various manifestations and causes of environmental degradation against the backdrop of economic transformation, population growth and enforcement (or lack thereof). It also provides a comprehensive update where possible of the present state of environmental affairs in the municipality, and the challenges involved in maintaining the carrying capacity of the environment to cope with development.

Following a discussion of the methodology used in this study, the next section will examine the impact of government policies on economic transformation, and of migration on population growth. Regulations and enforcement measures are then discussed in general, followed by an examination of Batam's environmental management challenges across many fronts.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

TheTrends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

EXECUTIVE SUMMARY

Introduction

The economic development of Malaysia since 1957, by all accounts, has been a spectacular trajectory of restructuring and of rapid economic growth, punctuated only by the Asian Financial Crisis in 1997, and by the economic crisis in 2008. Malaysia has also been able to graduate from a predominantly agricultural base to that of a manufacturing and services base through prudent economic management, balancing economic efficiency considerations with that of the redistribution of the economic pie. In recent years, however, the government has come to realize that the traditional approach of restructuring and diversifying the economy may not be sufficient to propel Malaysia to the level of other high-income nations. Furthermore, the historical engines of agriculture and manufecturing that have been driving Malaysia's economic growth has been losing its momentum over the past decade. Part of the slowing momentum is largely due to the fall in private investments: from 25 per cent of GDP throughout the 1990s to about 10 per cent in the past decade.

The Tenth Malaysian Plan (2011–15) succinctly outlines what needs to be undertaken for Malaysia:

Can Malaysia transform its economy up to the level of other high income countries? How has Malaysia landed in its present dilemma of the middle income trap? What are some of the challenges that need to be overcome that will move the country to join the ranks of a high-income and developed country? What are some of the suggested policies that can bring Malaysia to the next stage of development?

A number of recent works have been undertaken on the Malaysian economy.

The Malaysian economy has seen many notable developments since its independence in 1957 from the British rule. Initially a commodity exporter of rubber and tin, it has undergone several structural changes and is now a diversified economy with 75 per cent of its gross domestic product (GDP) coming from the manufacturing and services sectors. The economy has emerged as a modern, high middle income nation with strong economic fundamentals. Indeed, these economic achievements have been well supported by visionary leadership and proper policies. The developmental journey has spanned 2 Malaya Plans, 9 Malaysia Plans, 3 Outline Perspective Plans as well as a National Mission before coming to this juncture today.

During the Sixth Malaysia Plan in 1991, Vision 2020 or Wawasan 2020 was introduced by the then Malaysian Prime Minister, Dr Mahathir bin Mohamad. The vision called for a self-sufficient, democratic, economically just, mature, liberal and tolerant society, and united Malaysian nation which would achieve US$6,000 per capita income in 1980 prices by 2020. The essence of this transformation has been again outlined in the Tenth Malaysia Plan (2011–15) which was unveiled by Prime Minister Mr Najib Razak in June 2010. In this plan, a clearer perspective has been laid out on how Malaysia can transform itself from a developing country status to a developed country status.

But there remain many pressing challenges which need to be addressed if the country were to implement the Plan and to achieve a high-income status, transforming itself into a developed economy by 2020. In the past decade, the economic landscape, with increasing globalization and emergence of China, India and Brazil, has changed significantly. Hence, Malaysia can no longer depend on a low-cost structure economy to remain competitive internationally. In addition, Malaysia also faces internal challenges to drive economic growth to a higher level, while having to implement a prudent fiscal policy. The nation is confronted with the challenge of providing a conducive investment environment as well as developing high quality human capital, which is critical to enable the shift to a higher level of value added and productivity.

In light of this, a “stock-take” by academics, policy-makers, and the private sector to capture the past, and more importantly, apply lessons from the past to deal with challenges remaining before 2020 would be timely.

EXECUTIVE SUMMARY

1. • The APEC Model of originates from APEC 2010 Japan year, when sustainable growth was given due recognition as one of the five growth attributes important for member economies to develop.

2. • The green growth initiative assumes that increases in production (agricultural and industrial) as well as rising levels of consumption exert great pressure on the environment.

3. • The key deliverables in the APEC model of green growth are an improvement in energy efficiency; a reduction in tariff barriers for environmental goods and services; and the promotion of the low-carbon sector in member economies.

4. • While the lack of a legally binding structure has often been perceived to have weakened APEC's ability to carry out reforms, in another sense, it has provided strength from its inclusiveness, and this has helped to cultivate a spirit of cooperation among member economies

5. • Potentially, the “APEC way” may ultimately prove to be an effective approach to control greenhouse gas emissions, given how internationally binding talks have so far failed (for example, the Doha Development Agenda), and given the uncertainty of the present climate change talks.

INTRODUCTION

Indonesia assumes the chairmanship of the Asia Pacific Economic Communities (APEC) in 2013, adopting the theme of “Resilient Asia-Pacific: The Engine of Global Growth” in the process. Its three proposed priorities — pressing forward on the Bogor Goals, promoting sustainable growth with equity, and improving connectivity — clearly embrace some ongoing long-term goals propounded by the organisation, such as capital market development, food security, and cutting supply chain costs.

The APEC model of green growth fits into the second priority. This model originates from APEC 2010 Japan year, when sustainable growth was given due recognition as one of the five growth attributes important for member economies to develop.143 The organization also realised that it should help establish low-carbon societies, for which some measures for green growth were proposed. Subsequently in 2011 and 2012, the US and Russia continued where Japan had left off, further adding ‘meat’ to the model.

The availability of freshwater resources will be one of the most pressing environmental challenges in the years ahead. International dialogues in water have gone through several stages. From 1970 to the early 1980s (first stage), human health issues were the catalyst which ignited the international discussion of water. Then it was the Mar del Plata Action Plan in 1979 which called countries to develop national plans and programmes regarding the provision of water supplies and sanitation at a community level.

From the 1980s to the early 1990s (second stage), there was a growing recognition of water as an element of sustainable development. The Dublin Principles in 1992 referred to the economic value of water, and the importance of “integrated water resource management”.

From 1992 onwards (third stage), water issues have jumped in importance to become a priority issue. Water was recognized to be in a short supply; and in the Millennium Development Goals, the goal was set to include reducing or halving the proportion of population without sustainable access to safe drinking water by 2015. The Johannesburg Plan of Implementation in 2002 also reaffirmed the water supply goals of the Millennium Development Goals and also set a sanitation goal. In 2003, the United Nationals World Water Development Report also recognized that there was a water crisis globally, identified the causes, and provided tools to assess progress towards building a better future. In 2006, the United Nations World Water Development Report 2 recognized water as a shared responsibility recognizing the diverse functions of water as a resource, and also the stewardship roles that could be played by governments, communities, and individuals.

Narrowing the focus, Southeast Asia's annual per capita freshwater resources increased at an average rate of 38 per cent from 1996 to 1999 but has started to decreased at an average rate of 17 per cent beginning from 2000 to 2004, partly as a result of increases in the region's population and also development activities.

The APEC and East Asia Summits of November 2011 signaled the return of Southeast Asia to a position of importance in international politics that it had not occupied since the time of the Cold War. But the economies and domestic politics of the region have changed enormously since that time. The consequences of these changes, many of which would have been impossible to foretell even half a decade ago, will shape developments in the region during 2012.

The case of Indonesia exemplifies this reality. It has defied critics sceptical of its prospects for a transition to enduring democratic and civilian rule and emerged as a society of remarkable dynamism. This success has in its turn given rise to a series of difficult near-term challenges for the country. Its stature on the global stage, demonstrated not least by its success in the chair of ASEAN during 2011, demands that its defence establishment commit itself to thinking strategically and transcending its historically inward focus. Indonesians' and foreigners' hopes for the country demand that Jakarta promptly address its deficient police and courts, the weak capacity of much of its state bureaucracy, and the spectre of religious intolerance expressed through violence.

The presidency of Benigno Aquino in the Philippines will face similar tests during the same period if Aquino is to achieve his goal of hastening the emergence of his country from its long-time status as the sick man of the region. Observers will be keen to see how the Philippine Government's case against former President Gloria Macapagal Arroyo proceeds and how Manila fares in its effort to advance the cause of peace in Mindanao. Progress, or its lack, in these areas may well serve as a litmus test for the Aquino administration's campaign to improve governance in the country.

In the case of Vietnam, the reform of governance in the economic realm will largely determine the country's path through the year ahead.

To forecast even the short-term future of a region as diverse and as subject to external influences as Southeast Asia is rash. But to fail to be aware of emerging trends and likely developments in the region is scarcely less foolhardy. Equally important is attentiveness to the interaction of developments at the national and regional levels in Southeast Asia. That interaction will determine the future of the region.

In the realm of regional politics and security, no trend or development looms as large to observers looking ahead towards 2011 and 2012 as the progress of the “great game” set in motion by the increasing power and assertiveness of the People's Republic of China (PRC). This game spans all of eastern Asia. It has implications for the Indian Ocean. But it is in Southeast Asia that the PRC's growing ambitions and increasing military capabilities have begun to have the greatest consequences. States both within and outside the region have adopted a range of postures in reaction to those ambitions and capabilities. The result has been a climate of deep uncertainty about the extant regional security order.

On one level, the PRC's ever more intense interest in the region challenges the viability of ASEAN's longstanding vision of Southeast Asian security. Beijing's expansive understanding of its national interests seems difficult to reconcile with that vision, which has consistently downplayed such assertiveness in the interest of the gradual construction of a regional community.

On another level, the policies of a range of other external actors have also long shaped the regional political and security environments. American, Japanese, Australian, and, increasingly, Indian and South Korean approaches to Southeast Asia bear as much examination as do Chinese undertakings.

Nowhere have challenges to ASEAN's approach to regional security proved more apparent than in the South China Sea. While ASEAN and the PRC agreed on a Declaration of Conduct in the South China Sea in 2002, the failure in the intervening years both to implement the terms of that declaration and to arrive at a more formal and effective Code of Conduct may symbolize the obsolescence of the Association's approach to regional security.