Jakarta. President Joko “Jokowi” Widodo’s decade-long leadership has spurred the massive development of Indonesia's special economic zones which have given the country a major economic boost.

Indonesia today has dozens of SEZs -- namely areas that the government wishes to turn into new centers of economic growth -- spread across the archipelago. The government also grants incentives such as corporate income tax deductions and easier permits for companies who plan on investing in these SEZs. These SEZs are also not only open to manufacturing companies, but some of these zones are focused on tourism.

North Sumatra’s Sei Mangkei SEZ -- home to palm oil and rubber processing industries -- was among the first ones to gain SEZ status in 2012. It became the first SEZ that Jokowi launched in January 2015. 

Earlier this month, Jokowi launched two new SEZs, including the Banten International Education, Technology, and Health SEZ, just a few weeks before his retirement. This economic zone is expected to post around Rp 18.8 trillion ($1.2 billion) worth of investments once it is fully operational.

The second newly appointed SEZ is the Batam International Health Tourism SEZ, which is eyeing to attract investments worth Rp 6.91 trillion. The Batam International Health Tourism SEZ will fully operate in 2026 and can prevent Indonesia from losing Rp 500 billion in foreign exchange as it would stop people from needing to travel abroad for medical treatment.

The addition of the two aforementioned zones brought the latest tally to 24 SEZs. Since its inception, 22 of Indonesian SEZs had attracted Rp 205.2 trillion from domestic and foreign investors as of mid-2024. These SEZs have also generated jobs for 132,227 people. These job opportunities came from 368 businesses, government data showed.

Of all SEZs, the Kendal SEZ is among the most popular ones. Jokowi first granted the SEZ status to Kendal in 2019, just a few months after his second term as president began. Jokowi, however, first launched the Kendal SEZ back in 2016 alongside Singapore’s then-Prime Minister Lee Hsien Loong. It was popularly known as Kawasan Industri Kendal (KIK) back then.

Located in Central Java, the Kendal SEZ hosts high-tech and export-oriented industries, including the manufacturing plant of the Chinese anode battery material giant BTR. 

Earlier this month, investment czar Luhut Binsar Pandjaitan also inaugurated the operations of a facility that will produce lithium ferro phosphate (LFP) -- a mainstay electric vehicle (EV) battery ingredient. This $350 million facility belongs to LBM Energi Baru Indonesia. This project is also a strategic investment partnership between the sovereign wealth fund Indonesia Investment Authority (INA) and China's Changzhou Liyuan New Energy Technology. This production plant is expected to be the supplier for EV producers in China, Japan, and the US.

"Domestically processing [our minerals] is not just talk, but it is a grand strategy to advance Indonesia, particularly in sectors that will dominate in the future, including the electric vehicle [EV] ecosystem," Luhut said at the time.

According to Kawasan Industri Kendal’s marketing head Juliani Sari Kusumaningrum, the industries at the said SEZ had absorbed a workforce of 52,000 people. About 70 percent of the recruited workers are mainly Kendal locals. Others came from nearby cities, including Demak, Solo, and Surabaya. As many as 117 businesses are currently operating in Kendal SEZ, many of whom come from China. The various incentives have also wooed many investors to come to Kendal SEZ. Juliani revealed that Kendal SEZ had amassed up to Rp 87 trillion in investments.

“It is quite simple, really. We have recorded Rp 87 trillion [in investments]. Of course, we would be able to create more job opportunities if the realized investments grow,” Juliani said, not long ago.