LIST OF SPECIAL ECONOMIC ZONES IN INDONESIA

Special Economic Zones are areas within certain boundaries that have geo-economic and geo-strategic advantages which located inside of a country. Special Economic Zone first appeared in the late 1950s in Shannon Airport in Claire, Ireland. One of the main purposes of Special Economic Zone is to attract investors by giving tax incentives and lower tariffs for conducting business in Special Economic Zone. China is the perfect example of successful country in using Special Economic Zones to attract investors of foreign capital. China has even declared an entire province, Hainan, to be a Special Economic Zone.

The first four Chinese Special Economic Zones were all based in south-eastern coastal China and included Shenzhen, Zhuhai, Shantou, and Xiamen. China allowed, and continues to allow, these areas to offer tax incentives for foreign investors and develop their infrastructure without approval. The Special Economic Zones essentially act as liberal economic environment that promotes innovation and advancement within China’s borders. The Special Economic Zones continue to exist with great success. The success of Shenzhen and the other Special Economic Zones prompted the Chinese government to add 14 cities plus Hainan Island to the list of Special Economic Zones in 1984. The 14 cities include Beihai, Dalian, Fuzhou, Guangzhou, Lianyungang, Nantong, Ningbo, Qinhuangdao, Qingdao, Shanghai, Tianjin, Wenzhou, Yantai, and Zhanjiang. New Special Economic Zones are continually being declared and include border cities, provincial capital cities, and autonomous regions. Currently, most of the countries in the world including Indonesia are trying to develop their Special Economic Zones in order to support their economy.

15 Special Economic Zones in Indonesia are:

Operating Special Economic Zones :

1. KEK Sei Mangkei
2. KEK Tanjung Lesung
3. KEK Palu
4. KEK Mandalika
5. KEK Galang Batang
6. KEK Arun Lhokseumawe
7. KEK Tanjung Kelayang
8. KEK Bitung
9. KEK Morotai
10. KEK Maloy Batuta Trans Kalimantan (MBTK)
11. KEK Sorong

Under Construction Special Economic Zones :

1. KEK Tanjung Api-Api
2. KEK Singhasari
3. KEK Kendal
4. KEK Likupang

Special Economic Zones are specified in Law of the Republic of Indonesia No. 39 Year 2009 regarding Special Economic Zones. Areas that might be proposed to become a Special Economic Zone has to be made up either one or several zones dedicated for export processing, logistics, manufacturing, technology development, tourism, energy and/or other economic activities as stated in Article 3 paragraph 1 of Law of the Republic of Indonesia No. 39 Year 2009 regarding Special Economic Zones.

Several criterias have to be fulfilled in order to propose an area to become Special Economic Zones which are stated in article 4 of Law of The Republic of Indonesia No. 39 Year 2009 regarding Special Economic Zones.

Article 4

The sites which may be proposed to become SEZ must meet the following criteria:

1. they correspond with the Regional Spatial Plan and will unlikely disturb the conservation areas;
2. the said provincial/district/city administration supports the SEZ;
3. situated close to international trading hub or near international ship channel in Indonesia, or situated in an area with prime resource potentials, and
4. have clear boundaries.