Institutional Governance and Investment Licensing Reform in Indonesia’s Free Trade Zones: A Case Study of Tanjungpinang

Ade Masniary, Rumzi Samin, Edy Akhyari

Abstract


The Free Trade Zone (FTZ) policy was established to stimulate regional economic growth through investment promotion, trade facilitation, fiscal incentives, and simplified licensing procedures. Despite possessing strategic geographical advantages, the implementation of the FTZ policy in Tanjungpinang has not yet achieved its intended objectives. This study examines institutional fragmentation in investment licensing governance within the Tanjungpinang FTZ and analyzes its implications for investment service effectiveness. A qualitative case study approach was employed, utilizing in-depth interviews, document analysis, and literature review. Data were analyzed using the interactive model of Miles, Huberman, and Saldaña, consisting of data reduction, data display, and conclusion drawing. The findings reveal that overlapping authority among the Tanjungpinang FTZ Management Agency, local government institutions, and national licensing authorities has created institutional fragmentation. Weak inter-agency coordination, inconsistent implementation of the Online Single Submission (OSS) system, and regulatory ambiguities contribute to procedural complexity and uncertainty for investors. These challenges have reduced administrative efficiency, delayed investment realization, and weakened the competitiveness of the Tanjungpinang FTZ compared to other special economic zones. The study emphasizes the need for regulatory harmonization, clearer institutional authority, strengthened coordination mechanisms, and integrated licensing services to improve investment governance and enhance regional competitiveness.


Keywords


Free Trade Zone, Institutional Fragmentation, Investment Licensing, Governance, Tanjungpinang

Full Text:

PDF

References


Ansell, C., & Gash, A. (2008). Collaborative governance in theory and practice. Journal of Public Administration Research and Theory, 18(4), 543–571. https://doi.org/10.1093/jopart/mum032

Badan Pusat Statistik Kota Tanjungpinang. (2024). Kota Tanjungpinang dalam angka 2024. Badan Pusat Statistik Kota Tanjungpinang.

Benz, A., & Papadopoulos, Y. (Eds.). (2017). Governance and democracy: Comparing national, European and international experiences. Routledge.

Christensen, T., Lægreid, P., & Rykkja, L. H. (2016). Organizing for crisis management: Building governance capacity and legitimacy. Public Administration Review, 76(6), 887– 897. https://doi.org/10.1111/puar.12558

Djelic, M. L., & Quack, S. (2018). Governance, regulation, and institutional change. Edward Elgar Publishing.

Hill, M., & Hupe, P. (2022). Implementing public policy: An introduction to the study of operational governance (4th ed.). SAGE Publications.

Kementerian Investasi/Badan Koordinasi Penanaman Modal. (2025). Laporan realisasi investasi triwulan IV dan Januari–Desember 2025. Kementerian Investasi Republik Indonesia.

Klijn, E. H., & Koppenjan, J. (2016). Governance networks in the public sector. Routledge.

Lægreid, P., & Rykkja, L. H. (2015). Organizing for “wicked problems”: Analyzing coordination arrangements in two policy areas. International Journal of Public Sector Management, 28(6), 475–493. https://doi.org/10.1108/IJPSM-01-2015-0009

Miles, M. B., Huberman, A. M., & Saldaña, J. (2014). Qualitative data analysis: A methods sourcebook (3rd ed.). SAGE Publications.

North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press. https://doi.org/10.1017/CBO9780511808678

Organisation for Economic Co-operation and Development (OECD). (2023). Global investment trends and policy developments. OECD Publishing.

Pemerintah Provinsi Kepulauan Riau. (2025). Evaluasi penguatan kelembagaan kawasan Free Trade Zone di Provinsi Kepulauan Riau. Pemerintah Provinsi Kepulauan Riau.

Peters, B. G. (2018). The politics of bureaucracy: An introduction to comparative public administration (7th ed.). Routledge.

Peters, B. G. (2019). Institutional theory in political science: The new institutionalism (4th ed.). Edward Elgar Publishing.

Pierre, J., & Peters, B. G. (2020). Governance, politics and the state (2nd ed.). Red Globe Press.

Pollitt, C., & Bouckaert, G. (2017). Public management reform: A comparative analysis into the age of austerity (4th ed.). Oxford University Press.

Republik Indonesia. (2000). Undang-Undang Republik Indonesia Nomor 36 Tahun 2000 tentang Penetapan Peraturan Pemerintah Pengganti Undang-Undang Nomor 1 Tahun 2000 tentang Kawasan Perdagangan Bebas dan Pelabuhan Bebas menjadi Undang-Undang. Sekretariat Negara Republik Indonesia.

Republik Indonesia. (2007). Peraturan Pemerintah Republik Indonesia Nomor 47 Tahun 2007 tentang Kawasan Perdagangan Bebas dan Pelabuhan Bebas Tanjungpinang. Sekretariat Negara Republik Indonesia.

Republik Indonesia. (2021). Peraturan Pemerintah Republik Indonesia Nomor 5 Tahun 2021 tentang Penyelenggaraan Perizinan Berusaha Berbasis Risiko. Sekretariat Negara Republik Indonesia.

Torfing, J., Peters, B. G., Pierre, J., & Sørensen, E. (2012). Interactive governance: Advancing the paradigm. Oxford University Press.

United Nations Conference on Trade and Development (UNCTAD). (2024). World investment report 2024: Investment facilitation and sustainable development. United Nations.

Verhoest, K., Van Thiel, S., Bouckaert, G., & Lægreid, P. (2012). Government agencies: Practices and lessons from 30 countries. Palgrave Macmillan.

Weiss, T. G. (2019). Global governance: Why? What? Whither? (2nd ed.). Polity Press.

World Bank. (2020). Doing business 2020: Comparing business regulation in 190 economies. World Bank. https://doi.org/10.1596/978-1-4648-1440-2

World Bank. (2024). Global economic prospects 2024. World Bank Group.

Wu, X., Ramesh, M., Howlett, M., & Fritzen, S. (2018). The public policy primer: Managing the policy process (3rd ed.). Routledge




DOI: https://doi.org/10.31293/pd.v25i2.9530

Refbacks

  • There are currently no refbacks.


Copyright (c) 2026 Prediksi : Jurnal Administrasi dan Kebijakan

 

Department Public Administration
Faculty of Social and Political Siences
Jl. Ir Juanda No. 80 Samarinda (75124)
Telp. 0541-744490,7030598; Fax 0541-761244
E-Mail: sospol@untag-smd.ac.id