Tell the Beginning of the Establishment of KIP Batang, Bahlil Says Because It Failed to Relocate Investments

Minister of Energy and Mineral Resources Bahlil Lahadalia (photo: dok. Antara)

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia revealed the story behind the establishment of the Integrated Industrial Area (KIT) Batang, Central Java.

Bahlil said that the industrial area inaugurated by President Joko Widodo on July 26, 2024 was born after Indonesia failed to take advantage of the wave of investment relocation from China during the trade war between the United States and China in 2016-2017.

"There are 32 companies that have left China for Vietnam. Indonesia cannot get a share. Again, I was called by the President at that time with Opung (Luhut B. Pandjaitan)," said Bahlil at the Launch and Book Surgery of Bahlil Lahadalia, Friday, August 7.

The Golkar Party Chairman then received an assignment from President Jokowi to investigate the causes of Indonesia not getting a 'fresh wind' from the relocation.

From the results of the evaluation, he continued, it was found that one of the main obstacles was the high price of industrial land in Indonesia. At that time, the price of industrial land in Vietnam was only Rp600,000 per meter, while in Indonesia it reached around Rp2 million per meter.

"Then the Batang Industrial Estate was born as a form of the state's presence," he explained.

Furthermore, Bahlil explained that the preparation of the concept and master plan of the industrial area was carried out by a team at the Investment Ministry. He emphasized that the success was not the result of individual work.

On the same occasion, Bahlil also recalled the initial condition of the Investment Ministry which he said at that time only functioned as a "front office" without adequate authority.

"It's just a stamp like a tiger but it doesn't have teeth. This is honest. The money at that time was not more than Rp800 billion," added Bahlil.

However, he claimed that the team managed to complete the stalled investment worth Rp708 trillion. He also said that the realization of national investment increased significantly, from around Rp780 trillion in 2020 to Rp1,700 trillion when he ended his term as Minister of Investment.

"In 2020, our investment was IDR 780 trillion and I left the Investment Ministry, the realization of investment reached IDR 1,700 trillion," said Bahlil.