Impressive Development of Special Economic Zones: Signs of Economic Recovery in Indonesia

Kura-Kura Bali Special Economic Zone Will Provide Luxury Tourism

The post-pandemic economic growth in Indonesia has been remarkably positive, particularly evident in the rapid progress of Special Economic Zones or Kawasan Ekonomi Khusus (KEK) until 2023. The latest update reveals that a total of 20 KEK have been established, consisting of 10 Industrial KEK and 10 Tourism KEK.

Among these 20 KEK, there are 269 operating businesses, employing approximately 66,740 workers. Moreover, the realization of investment in KEK in 2022 reached an impressive 51.8 percent, equivalent to around Rp113.3 trillion.

Susiwijono Moegiarso, the Acting Secretary-General of the National Council for Special Economic Zones (KEK), reported that in the first quarter of 2023, investments totaling Rp8.5 trillion have been realized, creating job opportunities for 10,918 individuals.

The total investment comprises contributions from business entities amounting to Rp87.6 trillion (79 percent) and from public entities reaching Rp25.7 trillion (23 percent).

“In the first quarter of 2023, the investment realization in KEK amounted to Rp8.5 trillion, with the addition of 54 operating businesses in KEK and an increase of 10,918 job positions,” said Susiwijono in an official statement on Wednesday (June 21, 2023).

As of April 2023, the cumulative realization of investments has reached Rp117.8 trillion, providing employment opportunities for 61,416 individuals, as reported by Susiwijono.

Regarding the investment commitment for 2023, it amounts to Rp61.9 trillion. To encourage investors to inject their capital, Susiwijono emphasized the importance of an efficient administrative system that ensures smooth business licensing procedures.

Consequently, on June 16, 2023, the appointment of six senior officials as KEK Administrators took place, in line with the implementation of the Omnibus Law on Job Creation and Presidential Regulation No. 8/2022.

Susiwijono expressed his hope that these administrators would provide comprehensive licensing services, including fiscal facilities such as tax holidays/tax allowances, exemption from VAT and luxury goods tax, exemption from import duties, and non-collection of land and building tax.

Furthermore, the administrators are expected to facilitate non-fiscal aspects such as logistics, land acquisition, immigration, labor, and environmental matters.

As the Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono reiterated the primary objective of promoting KEK development, which, in the macroeconomic context, aims to create new economic resources.

“Not all KEK are progressing according to the predetermined targets. Therefore, with such developments, we will evaluate the performance of administrators to ensure the achievement of targets, as per the President’s expectation for KEK to continue thriving with significant investment realizations,” he added.