T

he Industry Ministry says it will develop industrial areas according to its existing potential in the hope of enhancing competitiveness, boosting investment and fostering environmentally friendly industrial development.

The move will include revitalizing several industrial areas in Java and developing new ones outside the densely-populated island.

The ministry’s director general for industrial regions development Dedi Mulyadi said on Tuesday that developing specific industrial areas would be on the ministry’s agenda to support the government’s Masterplan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI) program.

The program was aimed at making the country one of the world’s top-10 economies, with a US$4.5 trillion gross domestic product by 2025.

“To achieve the target, we will make areas with various industries into zones with distinctive industries,” Dedi said at the ministry’s National Coordinating Meeting in Jakarta on Tuesday.

According to him, the ministry had also targeted that by 2025, 60 percent of industrial areas would be found in Java and 40 percent in other regions, considering how unevenly distributed industrial areas were at present.

The industry bill currently being deliberated at the House of Representatives will act as a basis for the formation of the zones. The bill is expected to be finished by the end of this year, he said.

Dedi said the ministry would centralize machinery and high-technology industries in West Java, chemical and steel industries in Banten, labor-intensive textile and shoes in Central Java and petrochemical and oil and gas supporting industries in East Java.

Among prospective industrial areas outside Java, Dedi said the ministry would develop Landak in West Kalimantan for the rubber industry, Palu in Central Sulawesi for rattan, North Maluku for ferronickel, Tanggamus in Lampung for maritime affairs, Sei Mangkei in North Sumatra for crude palm oil and Sorong in West Papua for the timber and fishery industries.

The areas would need at least seven years to be fully operational; three years for planning, the issuance of permits and land acquisition, and the rest for construction and selling lots.

“Developing and expanding industrial areas will give us benefits, considering the areas have contributed 41 percent, or $47.4 billion, to our total non-oil and gas exports and have invited investments of around $20 billion to $25 billion a year,” Dedi explained. “Since 2010, demand for lots in industrial areas has risen by 1,000 hectares a year. The demand reached more than 8,000 hectares in 2012. But we still face challenges building the areas,” Dedi said.

Those challenges, according to Dedi, were a shortage of land and inadequate natural resources in Java, and a lack of supporting infrastructure and human resources outside Java.

To address the latter, the government had allocated Rp 38.8 trillion on building 281.4 kilometers of national roads and 7,164 meters of new bridges outside Java this year. (aml)