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Govt banks on Batang special economic zone to lure factories
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President Joko “Jokowi“ Widodo delivers a speech during the inauguration ceremony of the Batang integrated industrial park in Central Java on July 26, 2024. (Antara/Harviyan Perdana Putra )
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oordinating Maritime Affairs and Investment Minister Luhut Pandjaitan says the government has decided to designate the Batang Integrated Industrial Zone (KITB) as a special economic zone (SEZ).
That status means the KITB is set to benefit from certain incentives reserved for SEZs. “Thus, we will provide the same incentives, tax holidays and various other benefits as those given to other SEZs,” he said on Friday at the inauguration ceremony for the new industrial area, as reported by Kumparan.
The industrial zone in Central Java is expected to create at least 250,000 jobs in the area and attract trillions of rupiah in investment.
President Joko “Jokowi” Widodo, who headlined the opening event, praised the KITB as an opportunity to attract overseas investors to build factories in Indonesia, noting that the country’s rank in a global competitiveness index had improved to 27th position.
The Institute for Management Development’s (IMD) World Competitiveness Ranking (WCR) 2024 published last month ranked Indonesia 27th out of 67 countries assessed, marking an improvement from the 34th place the archipelago achieved in 2023. In Southeast Asia, only Singapore and Thailand ranked higher than Indonesia.
The President said several factors had contributed to the improved ranking, including the country’s economic and political stability and a relatively low level of inflation.
“This is our strength, and I’m pleased that, with my decision to have an industrial zone located in Batang with an area of 400 hectares, which is fully occupied, we have now opened another 400 ha on the northern side of the toll road. The total planned area is 4,300 ha, which will eventually accommodate [more] industries,” Jokowi said.
