Central Java, A New Idol for Business Development in Indonesia

September 21, 2020

Special Economic Zone In Indonesia - For the past five years, Indonesia government has been rapidly developing Central Java for new industrial park at Java. During his visit to Central Java region, President Joko Widodo pushes the regional government to build more infrastructure and offer more facilities to leverage Central Java as the new idol for Indonesia industrial park.

“We need to think of giving the investors more incentives for Central Java industrial park,” said Joko Widodo while visiting Central Java industrial estate on June 2020 (source: Wartakota).

The first development of Central Java industrial park started with Kendal Industrial Park, 2.200 hectares area, which was inaugurated by Indonesia President Joko Widodo and Singapore Prime Minister Lee Hsien Loong in 2016. Three years later, Indonesia government acknowledged Kendal Industrial Park as the new special economic zone in Indonesia. This status is very beneficial for the investors because they can get more tax incentives and additional facilities for their industries on this zone area. There have been 62 companies who set their manufacturer industries in Kendal Industrial Park. It is expected that Kendal Industrial Park will be able to provide up to 500.000 workers in the nearer future, by 2025.

The regent of Kendal, Mirna Annisa, said that the region put their hopes on Kendal Industrial Park to boost their economic growth. She believes that she can reach 12% economic growth in the future. For her, the area income will be improved from the tax incentives and investments coming to the special economic zone in Kendal. Next to it, the unemployment rate will be also decreasing as in the year of 2019, it is already diminished by 14% (source: Kontan).

The head of Indonesian Chamber of Commerce and Industry (KADIN) for Central Java region, Kunkrit Suryo Wicaksono, said that the development in Kendal Industrial Park is very promising. He continued, the ongoing process of developing Central Java industrial park will be set as a hope for economic improvement after COVID-19 crisis. It can boost local economy condition by keep operating the manufacturers (source: Suara Merdeka). Other than that, the development of two other Central Java industrial estate(s) in Brebes and Batang is also being seen as a good sign for Central Java to keep attracting new investors.

Beside the improvement from Central Java industrial park, Small and Medium Enterprises in Central Java is also rapidly growing. There have been around 3,5 million small and medium local industries which get supports from the government. Kunkrit hopes that government’s attention become a stimulus for the economic sector to keep developed and expanded the businesses. This is also the key of Central Java’s attractiveness on the eye of investors (source: Suara Merdeka).