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anyuwangi Regent Abdullah Azwar says that he will issue no more permits for new retail stores or shopping malls in the 1.6-million-person regency in East Java.

Malls and minimarkets threatened traditional markets and local entrepreneurs and would not raise the income of residents of Banyuwangi, which averaged about Rp 6.3 million (US$658) a year, Azwar said.

“Almost 50 percent of people’s economic activities in Banyuwangi is supported by the agriculture and fishery sectors. The hotel and restaurant sectors also play a big role in the people’s economy,” Azwar told The Jakarta Post on Tuesday.

Banyuwangi is located in the eastern part of East Java, about 300 kilometers from Surabaya, the provincial capital and the nation’s largest city after Jakarta.

Dozens of years ago, Banyuwangi existed principally as a transit point between Bali and East Java. Today, the regency has developed a new economic focus.

Several businesses have invested in Banyuwangi to take advantage of its gold deposits. The nation’s largest cement producer, PT Semen Gresik and Bosowa, another cement manufacturer, have established plants in the regency.

The State-Owned Enterprises Ministry also has plans to build the largest sugar mill in Indonesia in Banyuwangi, while a fish processing company has made a Rp 62 billion investment in the regency.

The Banyuwangi administration issued 1,650 business licenses for small- and medium-scale industries valued between Rp 100 million and Rp 5 billion in 2011.

Those valuations exclude domestic investments included in the government’s facilities scheme that amounted to Rp 803 billion last year.

The total value of foreign investment in the regency in 2011 stood at Rp 960 billion.

The economic growth in Banyuwangi can be noticed from local credit allocations which stood at Rp 5.3 trillion as of June, up about 33 percent from the same period of 2011.

The growth in credit allocations in the regency has exceeded the national average, which stands at 25.8 percent.

“I will further open opportunities for investors to invest in Banyuwangi,” Azwar said. “I will continue to improve infrastructure and services as well as human resource development in Banyuwangi.”

Azwar said that the administration would continue to build rural infrastructure to improve the welfare of local residents.

Officials have also prioritized the expansion of Blimbingsari Airport, which was funded by Rp 56.5 billion ($6.57 million) from the regency budget and Rp 11.6 billion from the provincial budget in 2009.

The airport currently serves Sky Aviation flights to Denpasar, Bali, and Wings Air and Merpati flights to Juanda International Airport in Surabaya.