Jakarta. Indonesia’s special economic zones (SEZs) attracted Rp 90.1 trillion ($5.5 billion) in new investment and created 47,747 jobs last year, an official announced on Wednesday.

The government has established 24 SEZs across the country since 2012 and plans to add five more this year. These zones offer significant benefits, including generous tax incentives, expedited licensing procedures, and land concessions for up to 80 years.

The five new zones will focus on sectors like renewable energy, logistics, and digital technology.

Since their inception nearly 13 years ago, SEZs have secured Rp 263.4 trillion ($16.2 billion) in domestic and foreign investments and generated 160,874 jobs, involving over 400 businesses, according to Susiwijono Moegiarso, Chair of the National Council for SEZs.

He said the SEZ program has become a cornerstone of the country’s economic agenda for its ability to spur regional growth, attract investment, and create employment opportunities.

“To achieve the economic growth target of 8 percent, we need Rp 13,032 trillion in investment over the next five years. SEZs play a pivotal role in our efforts to meet this goal,” Susiwijono said in a statement.

SEZs differ from standard industrial areas due to the special treatments they receive, such as exemptions from value-added tax on specific goods, duty-free facilities, and customs and excise benefits. These advantages are designed to attract both domestic and international investors, boosting regional development and job creation.

Sei Mangkei in North Sumatra, established in 2012, was the first SEZ and initially focused on the palm oil and rubber industries.

Several SEZs also prioritize the hospitality sector, including Mandalika in West Nusa Tenggara, which features the country’s largest and most modern motor racing circuit, a regular host of the MotoGP race.

Prominent SEZs in Indonesia

• Mandalika SEZ (West Nusa Tenggara): Focused on tourism, this SEZ boasts premium resorts, beaches, and the Mandalika International Street Circuit, which hosts international events like MotoGP.
• Sei Mangkei SEZ (North Sumatra): Specializes in palm oil and rubber processing, as well as downstream industries to add value to raw materials.
• Batam Aero Technic SEZ (Riau Islands): Serves as a hub for aircraft maintenance, repair, and overhaul (MRO), attracting investments in aviation.
• Gresik SEZ (East Java): Focused on industries such as petrochemicals and steel, catering to Indonesia's industrial growth.
• Bitung SEZ (North Sulawesi): Positioned as a logistics hub for Eastern Indonesia, emphasizing fisheries and exports.

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