Indonesia Approves New Special Economic Zones to Boost Economy and Job Creation

Jakarta, INTI – The Indonesian government, through the National Council for Special Economic Zones (KEK), has approved the establishment of three new KEKs: the International Health Tourism KEK in Batam, the KEK in Tangerang Regency, and the KEK in Morowali Regency. The decision was made during the National Council meeting held at the Coordinating Ministry for Economic Affairs office on Wednesday, May 29, 2024.

The National Council for KEK will now recommend these proposed KEKs to President Joko Widodo for formal approval through a Government Regulation (PP).

“Three new KEKs have been approved. First, the KEK in the BSD area (Tangerang Regency) focused on health, education, and technology, not property. Second, the Health KEK in Batam, in collaboration with Apollo Hospital from India, aiming to provide better healthcare services for the Riau Islands and surrounding areas. Third, the nickel development KEK in Morowali Regency involving PT Vale,” explained Coordinating Minister for Economic Affairs Airlangga Hartarto, who also chairs the National Council for KEK.

The approval of these new KEKs meets the requirements set forth in Government Regulation No. 40 of 2021 on the Implementation of Special Economic Zones. These zones are expected to stimulate regional economies and create new jobs.

“With the approval of these KEKs, we hope to enhance Indonesia's competitiveness, benefiting from the various facilities and incentives provided. Furthermore, we expect these KEKs to support the business ecosystem in their respective areas,” added Minister Airlangga.

To ensure the sustainability and development of the KEKs, Minister Airlangga emphasized the importance of monitoring, “I urge both central and local governments to monitor the realization of these investments,” he stated.

The government aims to transform KEK policies to focus on creating added value through technological and human resource advancements. The development of KEKs in the services sector is expected to retain foreign exchange earnings and increase national income.

Acting Secretary General of the National Council for KEK, Edwin Manansang, expressed hope that the new KEKs would boost investment in Indonesia. “I hope that with the approval of these three new KEKs, we can attract more investments into Indonesia,” he said.

Details of the New KEKs:

1. KEK in Tangerang Regency, Banten Province:
   • Area: 59.68 hectares
   • Investment Target: Rp 18.8 trillion
   • Job Creation: 13,446 jobs
   • Focus Areas: Education, international healthcare, and digital technology. Notably, it will host Monash University, ranked 42nd in the world, alongside digital economy and technology development with a target of 100 startups, integrated health services, and creative industries.
2. International Health Tourism KEK in Batam:
   • Investment Commitment: Rp 6.91 trillion
   • Job Creation: 105,406 jobs
   • Investor: Apollo Hospital India
   • Focus: High-standard healthcare services and medical tourism, expected to be operational by 2026, saving Indonesia approximately Rp 500 billion in foreign exchange.
3. KEK in Morowali Regency, Central Sulawesi:
   • Investment Target: Rp 135.38 trillion
   • Job Creation: 136,000 jobs
   • Focus: Nickel production and processing with green industry advantages, including gas-fired power plants, advanced smelting technology, waste recycling processes, battery precursor production, and water supply infrastructure.

The National Council meeting was attended by the Minister of Agrarian Affairs and Spatial Planning/National Land Agency Head, the Deputy Minister of Health, the Deputy for Institutional and Community Relations at the State Secretariat, the Secretary General of the Ministry of Transportation, the Deputy for Business Development at the Ministry of State-Owned Enterprises, the Acting Deputy for Regional Development and Spatial Planning, the Acting Regent of Tangerang, the Deputy Head of the Batam Free Trade Zone Authority, and representatives from other relevant ministries and agencies.