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The government has made the decision to allow for the development of new special economic zones for industry on Java Island, the nation’s most populous and most industrialized island, in a push to diversify industries and respond to demand from the private sector.
The decision was made after a meeting between Coordinating Economic Minister Darmin Nasution and Industry Minister Airlangga Hartarto on Monday. Darmin said special criteria would be in place to avoid redundancy with the existing industry in Java. “There will be criteria to ensure that [new special economic zones] do not affect other industries,” Darmin said, adding that the criteria included manufacturing in export-oriented or import-substitution industries.
He did provide details on the possible locations for the new zones, but mentioned that a proposal was made to name Kendal Industrial Park, a joint venture between Indonesian property giant PT Jababeka and Singaporean Sembawang Corporation, a special economic zone.
The government previously refrained from establishing economic zones for industry in Java in a bid to bring forward more equitable industrial development across the archipelago, consistent with President Joko “Jokowi” Widodo’s vision of “building Indonesia from its fringe regions”.
Airlangga separately said that locations in Central and East Java were touted as prime spots for special economic zones. He said one such zone in Central Java would be focused on the automotive, textile and electrical components industry, while another in East Java would be similar to Nongsa Digital Park in Batam, Riau Islands.