Prabowo Plans to Build Special Economic Zones (KEK) in Every Province

President-elect Prabowo Subianto has unveiled his ambitious plan to establish Special Economic Zones (SEZs) in every province of Indonesia. This initiative aims to strengthen the national economy, enhance global competitiveness, and create wider employment opportunities for Indonesians.

Why SEZs in Every Province?

Currently, Indonesia has 24 SEZs covering a total area of around 21,000 hectares. However, compared to neighboring countries like Vietnam and Malaysia, Indonesia has fewer and smaller SEZs. Vietnam, for instance, has successfully attracted massive foreign investments by developing SEZs that are integrated with industrial and high-tech sectors.

By targeting the development of 38 SEZs—one in each province—Prabowo aims to maximize local economic potential, reduce regional economic disparities, and create a more competitive investment climate. Additionally, SEZs are expected to accelerate industrialization and downstream processing of natural resources within the country.

The Role of SOEs and the Private Sector in SEZ Development

State-owned enterprise holding company Danareksa has expressed its readiness to contribute to SEZ development across various regions. Currently, Danareksa manages seven industrial areas with the potential to become SEZs, including the Batang Integrated Industrial Zone (KITB), which has officially become the Batang Industropolis SEZ.

Beyond Danareksa, many private sector players and foreign investors are interested in participating in SEZ development. The government is expected to provide fiscal incentives and more flexible regulations to make investments in SEZs more attractive for businesses.

Economic and Social Impact of SEZs

The government anticipates that SEZs in every province will bring significant economic and social benefits, including:

1. Job Creation – SEZs will serve as industrial and manufacturing hubs, creating new employment opportunities for local communities.
2. Enhanced Competitiveness – With better infrastructure, more supportive regulations, and attractive tax incentives, Indonesia can compete more effectively with neighboring countries in attracting foreign investment.
3. Economic Equity – SEZs can help reduce regional economic disparities by promoting more balanced economic growth across Indonesia.
4. Downstream Processing and Industrialization – SEZs can become key centers for processing commodities such as nickel, palm oil, and agricultural products, increasing the added value of domestic products before export.

Challenges in SEZ Implementation

Despite its potential, the development of SEZs in every province also faces several challenges, including:

• Regulations and Permits – Policy harmonization between the central and regional governments is needed to ensure that licensing processes are streamlined and do not hinder investment.
• Infrastructure and Connectivity – SEZs require adequate infrastructure, such as roads, ports, and stable electricity supply, to operate efficiently.
• Human Resource Competitiveness – SEZ development must be accompanied by workforce quality improvements through vocational training and education aligned with industry needs.

Conclusion

The plan to establish SEZs in every province is a strategic move that has the potential to elevate Indonesia’s global competitiveness. With support from SOEs, the private sector, and conducive government policies, SEZs can become the driving force for inclusive and sustainable economic growth.