The seven targeted Special Economic Zones (KEK) will operate next year i.e. KEK Arun Lhokseumawe (Aceh), KEK Galang Batang, KEK Maloy Batuta Trans Kalimantan (MBTK), KEK Morotai, Bitung, Tanjung Api KEK Tanjung Api-api and Tanjung Kelayang. Other KEK, the KEK Sorong targeted operation in 2019
The Government ensured, seven Special Economic Zones (KEK) will operate next year. Operation these seven KEK following four that have operated this year. In the years 2018-2019, the Government will establish some zones as KEK.
Based on the design of the setting of the KEK 2015-2019 year, the Government current has set 12 KEK. As many as 4 KEK has been operating, i.e. the KEK Sei Mangkei (North Sumatra), KEK Tanjung Lesung (Banten), KEK Mandalika (Central Lombok, NTB) and KEK Palu (Central Sulawesi), while 7 other will operate next year.
The main activities in the KEK Tanjung Lesung and Mandalika highlights to the tourism sector. While the KEK Sei Mangkei specified as processing industry for oil palm and rubber. While the main activities in KEK Palu is the processing industry for nickel and iron ore, cocoa processing industry, industry of seaweed and rattan processing industry.
As for the seven targeted KEK operate next year i.e. KEK Arun Lhokseumawe (Aceh), KEK Galang Batang, MBTK, KEK Morotai, KEK Bitung, KEK Tanjung Api-Api and KEK Siambul. One of the other i.e. KEK Sorong the targeted operation in 2019.
"The total investment target in 12 KEK it was Rp 698,4 trillion. For the year 2018, For the year 2018, zones assigned into KEK was increased to 15 and 17 in year 2019. There are nine potential KEK assigned in year 2018-2019, "said Suharto Enoh Pranoto, Secretary of National Council Special Economic Zone in his speech he held a seminar at the Coordinating Ministry for Economic Affairs, Thursday (14/12).
Ninth KEK are KEK Merauke, KEK Melolo, KEK Tanjung Gunung, KEK Singhasari, KEK Kertajati, KEK Pulau Asam, KEK Kuala Tanjung, and KEK Kijing. One other area is Batam and will be transformed into KEK.
Foreign Investment
The idea behind that because so little foreign investment in the form of Foreign Direct Investment (FDI) or direct investment go to Indonesia, prompting the Government set some regions become Special Economic Zones (KEK). Investors who invest in the region will get some incentives to increase the competitiveness of the territory from surrounding countries.
Based on data from the World Investment Report and BKPM 2017 from the Secretariat of the National Council Special Economic Zones, the average flow of foreign investment globally in 2012 to 2016 with its value reaching US $1.417,58 billion. While coming into Indonesia only US $27.99 billion or just 1.97% of the total flow of global investment.
In addition, the low level of realization of investment compared to filing (investment commitment) from 2010 up to 2016 is also becoming a problem that is being faced by Indonesia.
"The ratio of the average realization comparison and investment plans in 2010 to 2016 is 27.5% for PMA and PMDN amounted to 31.8%. In addition, the investment area between Java and outside Java are also unbalanced, "said Enoh.
Mere information, based on data from BKPM investment realization PMDN 2012 to 2016 in Java is as big as 57.81%, while outside Java are 42.19%. With regard to the realization of the investment PMA 2012 to 2016 in Java is as big as 54.75% and outside Java 45.25%.
The Government itself in the National medium term development plan 2015-2019 has set up goals for national development in the areas of investment include increasing foreign investment (PMA) and domestic investment (PMDN) to Rp 933 trillion in 2019. To encourage the expansion of investment especially outside Java, the Government has set several regions as a Special Economic Zone (KEK).
"Simply put the investors who invest in the region will have facilities such as various incentives from regional and centre government. The basic concept of the KEK is the grant of facilities on completion of the location has the accessibility to global markets (access to ports and or airport), "said Enoh explained.
The expectation by providing specific incentives, it can increase the competitiveness of the region by region in the surrounding countries. With increased competitiveness, are expected to attract investors to invest in the region.
Some incentives in the form of facilities and ease in Special Economic Zreas among other facilities such as fiscal tax holiday 20 - 100% during 5-25 year (for investment according to the main activity of which is set in the KEK) and the investment allowance of up to 10 years ( for non investment activities). Investors were also given import duty exemption and PDRI (tax in order to import) are free for capital goods such as machinery, equipment and spare parts. In addition the Negative Investment List (DNI) is also not enforced in the KEK areas.
Other facilities are the acceleration of implementation of trying such Ease Licensing, Ease of Direct Investment Construction (KLIK) and the acceleration of the implementation in the form of eligibility checklist.
Previously, on separate occasions, from the University of Indonesia Economist Faisal Basri said determination method of KEK in fact already antiquated and less effective in encouraging the growth of the industry.
"The concept of KEK was already ancient because import duties in Indonesia actually already almost 0%. For what there was KEK again, later will only be the entrance of contraband such as Batam, "said Faisal.
According to Faisal, the determination of an area into KEK should consider the availability of energy infrastructure like pipelines and gas wells. This is necessary to support the needs of industries in the region.
