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Over the last decade, Indonesia’s economic clusters–special economic zones (SEZs) and industrial estates have grown multi-fold, both in terms of number and breadth. In 2014, there were approximately 74 industrial estates with an area of 36,300 hectares in the country. By 2017, the number of industrial estates expanded to 87 with an area of 59,700 hectares. Similarly, the number of SEZs in the country has increased to 12; out of these, four are currently operational, representing economic activities across various industrial sectors.
Given Indonesia’s locational advantages– rich natural resources and a climate conducive to many forms of agriculture -, these clusters offer growing opportunities for investment in manufacturing, agriculture, marine, infrastructure, and tourism industries. Moreover, Indonesia has large forests areas, deposits of coal, tin, bauxite, copper, nickel, and other minerals. The country also boasts a significant oil and gas sector and is one of the leading suppliers of natural rubber.
To facilitate investment in these zones, the government of Indonesia has instituted a number of incentives targeting investors setting up within SEZs and industrial parks.