As part of a measure to redistribute economic activities across the archipelago, the government will propose turning Tanjung Api-Api in South Sumatra, Morotai in North Maluku and Mandalika in West Nusa Tenggara into special economic zones (KEKs).
“The KEK National Board meeting has conducted an evaluation of the existing KEKs and has deliberated on the inclusion of three new zones. Proposals for the new zones will be submitted to the President for approval,” said Hatta.
According to regulations on KEKs, businesses operating in the zones will receive various incentives such as tax reductions and exemptions, fulfillment of various basic infrastructure and, supposedly, hassle-free red tape.
As for Morotai, the government has plans for the zone to focus on developing the fishery industry, manufacturing and tourism.
Among the investors indicating their interest are the Taiwan International Cooperation and Development Fund (ICDF), Evergreen, Everspring Marine, Kinpo Elektronik, CTCI Corp and Advance Green Biotechnology.
“They have registered their interest in developing the zone, which is in close proximity to Taiwan and Japan,” said Hatta.
The proposed KEKs will also cover the tourism industry, which will be allotted to Mandalika. Hatta has estimated that the region will need around Rp 2.2 trillion for development.
PT Bali Tourism Development Corporation, PT MNC Land and PT Gobel International are among the interested investors.
The development of the KEK regions is part of the government’s policy under the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI) program.
The program is a set of plans and actions to build economic clusters and business centers on all of Indonesia’s major islands to support their unique local economies.
While businesses praise the policy, its implementation remains slack.
The construction of Sei Mangke KEK, for example, has revealed how investors are being hindered by severe and costly burdens, as well as time and legal uncertainties, in dealing with bureaucracy.
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