The government is currently facing land expansion proposals for three Special Economic Zones (SEZs), namely Kendal SEZ, Gresik SEZ, and Galang Batang SEZ. This expansion step comes following high investor interest, which has driven utilization rates in several of these areas to maximum capacity, particularly in Kendal SEZ, which currently hosts around 140 industrial players.
Responding to these plans, Yusuf Rendy Manilet, an economist at the Center of Reform on Economics (Core) Indonesia, assessed that developing zones already proven to be in market demand is an efficient policy. This strategy is considered more rational than opening new land from scratch, considering that development costs are entirely borne by the Development and Management Business Entities (BUPP) and investors, thus not burdening the State Revenue and Expenditure Budget (APBN).
However, Yusuf emphasized the importance of evaluating fiscal incentive policies, such as *tax holiday*. According to him, the government must consider whether these tax exemptions are still crucial or have instead become a subsidy for investments that would actually enter without such fiscal support. This evaluation is essential for maintaining the effectiveness of state revenue.
Furthermore, he highlighted that the economic impact of each SEZ will vary. Kendal SEZ, which focuses on manufacturing, is projected to absorb a large local workforce. Conversely, Galang Batang SEZ, operating in capital-intensive sectors such as smelters, may record high investment values but with more limited job absorption capacity.
Beyond economic issues, the risk of development inequality is also a concern. Yusuf warned the government against falling into a 'Java-centric' pattern. Overly concentrated development on Java Island is feared to obscure the main goal of establishing SEZs as instruments for national economic equalization, meaning infrastructure development outside Java must remain a top government priority.
