In looking at Batam FTZ, Singaporeplays an important role in gaining the economic and political power over the region. The rapid development of the electronics industry and booming economic growth in late 1980s encouraged Singaporeto aggressively open up new production spaces and seek new supplies of cheap labour, land and water from its neighbour, Indonesia. The concept of the logic of territorial power applies here. Singaporeis an exemplary case of a political state that can actually set out to build an effective and dynamic regional economy within itself by systematically capturing the molecular processes of capital accumulation in space and time within its borders (Harvey 2003).
The establishment of Batam FTZ as a Singapore “backyard “ for its manufacturing industries involves political negotiations between Indonesia and Singapore in compliance with the standard of global exchange. Included in this, is the hinterlandization, the zoning of neigbouring countries to secure access to land and cheap labour. Institutional arrangements to accommodate the interests of Singapore were made, along with the establishment of infrastructure and land clearing within Indonesia. In this context, citing Glassman (2010), regionalization can be differentiated from regionalism. Regionalism is driven by formal government-to-government arrangements such as economic unions and trade agreements, while regionalization is “less ‘constructed’ and (more) market driven form of integration” (Evans, Kaplinsky, and Robinson 2006, 16). The chapter further elaborates on the concept of the growth triangle of Indonesia-Malaysia-Singapore in the context of regionalization.