Indonesia, as the largest economy in Southeast Asia and one of the emerging market economies of the world, continuously improves its position to be one of the principals for cost-efficient and attractive investment location in the global economy. The Government of Indonesia (GoI) encourages the development of economic zones that aims to control the use of space, increase efforts of environmentally sound economic development, accelerate the growth and improve the competitiveness of investment, and provide certainty in the planning and construction of infrastructures in support of economic development and investment. Indonesia focuses on its programs to localize investments into economic zones spreading across Indonesia’s islands.
In this regard, following up the economic policy package II issued on 29 September 2015 regarding the acceleration and simplification of investment licensing services in Industrial Estate, Indonesia has applied Direct Construction facility, so-called KLIK, in 48 selected industrial estates, as follow:
The basic concept of Indonesia SEZ is the preparation of areas which have accessibility to the global market (access to the sea port and or airport). The areas are designed to maximize industrial activities, export, import and other related activities which has high economic value. Furthermore, the areas are given certain facilities and incentives in order to increase the competitiveness among the countries nearby. Both the increasing competitiveness and the incentives are expected to be the pull factors to attract investors to the region.
Indonesia Special Economic Zones are directed to fulfill the achievement of The National Priority Development Agenda:
• Instrument to improve people’s productivity and competitiveness in the international market places
• It is strenghtening the framework of a unitary state of Indonesia through alleviating uneven regional development
• The SEZs are expected to improve Indonesia’s value-added and value chain through down-streaming industrialization
• The SEZs development will increase outer island competitiveness as an investment destination, through regional infrastructure development
Development Objectives of Special Economic Zones:
• Increase investment through the provision of areas endowed with geo-economic and geo-strategic advantages
• Optimalization of industry activities, export, import and other economic activities which has high economic value
• Accelerate the regional development through the establishment of new economic growth centers to balance the development among regions
• Embodying a breakthrough in the regional development model for economic growth, namely industry, tourism and trade to create job opportunities
Until July 2020, there are 15 regions that are registered as SEZs, which are:
• SEZ Palu
• SEZ Kendal
The government has big plans for tourism in Indonesia. But for the tourism sector to be a major contributor to the economy, large investments are needed to accelerate the process. The government has listed 10 priority tourism destinations for development, which are Danau Toba (North Sumatera), Kepulauan Seribu (DKI Jakarta), Borobudur (Central Java), Bromo Tengger Semeru (East Java), Labuan Bajo (East Nusa Tenggara) and Wakatobi (South East Sulawesi), Tanjung Kelayang (Bangka Belitung), Tanjung Lesung (Banten), Mandalika (West Nusa Tenggara) and Morotoi (North Maluku).