Government Ready To Revoke Unoptimal SEZ Status

Illustration - Photos of air from the Arun Special Economic Zone (SEZ) in the border area of Lhokseumawe and North Aceh, Aceh, Friday (13/9/2019). BETWEEN PHOTOS/Rahmad/aww/pri.

JAKARTA - Secretary of the Coordinating Ministry for Economic Affairs Susiwijono Moegiarso said the government is currently evaluating the areas designated as Special Economic Zones (SEZs) and is ready to revoke the SEZ status for areas that are not optimal in achieving investment targets.

"According to the President's direction, we will evaluate if there is a significant investment growth until next year, we have to withdraw. Revoke from the SEZ status," said Susiwijono, who also serves as Plt. Secretary General of the National Council for Special Economic Zones (KEK) at the FGD event. Public Communication Strategy for SEZ Development in Jakarta reported by ANTARA, Friday, November 10.

Currently, there are 20 areas that have been designated as SEZs consisting of 10 Industrial SEZs and 10 Tourism SEZs, namely SEZ Arun Lhokseumawe, SEZ Sei Mangkei, SEZ Batam Aero Technic, SEZ Galang Batang, KEK Kendal, SEZ Gresik, SEZ Sorong, SEZ Bitung, SEZ Palu, SEZ MBTK, SEZ Nongsa, KEK Tanjung Kelayang, SEZ Tanjung Lesung, SEZ Lido, SEZ Morotai, SEZ Likupang, SEZ Mandalika, SEZ Kura-Kura Bali, SEZ Sanur, and KEK Singhasari.

"Revolving from the SEZ does not mean that the industry will be closed, later it can become an ordinary PSN (National Strategic Project). SEZs get everything. If they are revoked, they are still PSN or other areas or something. We are currently evaluating, by the end of this year there may be evaluation results," said Susiwijono.

Susiwijono said that the development of SEZs continues. Of the 20 SEZs, it has succeeded in achieving investment realization in the third quarter of 2023 alone of IDR 35.71 trillion or 25 percent of the cumulative investment and has been able to open up employment opportunities as many as 31,557 people or 36 percent of the cumulative workforce. Meanwhile, additional exports also reached IDR 8.15 trillion in the third quarter of 2023.

The cumulative achievement until the third quarter of 2023 is the realization of SEZ investment of Rp140 trillion and employment as many as 86,273 people.

Meanwhile, for 2023, the SEZ investment realization target is IDR 62.2 trillion and the target for opening new jobs is 69,763 people.

According to Susiwijono, his party together with the Institute for Economic and Community Research (LPEM) of the Faculty of Economics and Business, University of Indonesia is reviewing the indicators of SEZ performance achievements.

"So far, it's only investment and labor, each sector is different. If manufacturing is definitely big, SEZ Gresik is an investment of IDR 45 trillion, that's big. As soon as Singhasari is educated, now King's College comes to build a campus, the campus is already there. So it can't be shared with each SEZ," said Susiwijono.

Currently, the government is recalculating all SEZ targets with more complete indicators. In addition to investment and labor, an indicator can also be seen in the form of the impact of the SEZ on the economy and the effect of its multipliers.

"Now there are only two indicators, so now with LPEM UI we are developing the indicators. Because it is not fair to talk about the education sector, it is not as much investment manufacturing as the workforce," said Susiwijono.

Susiwijono added that there are indeed several SEZs in Eastern Indonesia that are being reviewed and evaluated by the government. He also hopes that new investments will enter the SEZ.

"They continue to increase their investment, we just have to give a target. If the target is not met, we will review it. Only if we can, if we withdraw it, because it is not easy to make a SEZ. Because one SEZ is a special government regulation to determine SEZs and one Presidential Decree to determine the KEK regional council. So it's not easy to make a SEZ," said Susiwijono.