The secretary to the coordinating economic minister, Susiwijono Moegiarso, said on Monday that Rp 70 trillion in investment was expected to go to a range of industries such as automotive and food and beverage within the Kendal SEZ in Central Java.

Up to Rp 12.5 trillion is expected to be invested in Singhasari, East Java, in the digital and tourism sectors, among other sectors. The remaining Rp 7.1 trillion will go to tourism development in the Likupang SEZ in North Sulawesi, one of the government’s five super priority tourism destinations.

“This [the three SEZs] is part of the government’s efforts to encourage investment and to grow the economy, especially in the regions [outside Jakarta],” Susiwijono said at the handover ceremony of the presidential decrees on the establishment of the three SEZs.

The projects are expected to begin in 2021 and complete by 2024 or 2025. The SEZ status of Kendal, Singhasari and Likupang could be revoked if they fail to meet the investment targets, he added. This is the first time the government has set an investment target for SEZs, driven by the lack of investment realization in some of Indonesia’s 11 existing special zones.

"We are also discussing targets for existing SEZs, as we did not set any when they were established," Susiwijono said.

SEZ development has been progressing at snail’s pace with a little more than a quarter of investment commitment being realized in 2019. Only 8,686 jobs were created by the end of 2019 with investment worth Rp 22.2 trillion, versus the government’s Rp 85.3 trillion target. Of the 15 SEZs in Indonesia, nine are industrial zones and six are tourism zones.

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