Officially, Kendal Becomes a New SEZ in Central Java

December 22, 2019

Rahma Tri - December 22, 2019 - 19:28 WIB

TEMPO.CO, Jakarta - The government has officially made Kendal, Central Java a new Special Economic Zone (SEZ). The establishment of the Kendal SEZ was previously proposed by PT Kawasan Industri Kendal and was approved by the Regent of Kendal. Subsequently, the proposal was submitted to the Governor of Central Java and forwarded to the SEZ National Council.

As a result, the government has now issued Government Regulation (PP) No. 85/2019 concerning Kendal SEZ which was promulgated since 18 December. In the PP, the government argues that Kendal needs to be developed as a KEK in order to support the acceleration and expansion of national economic development.

Kendal is considered to have geoeconomic advantages because the area is located adjacent to Ahmad Yani Airport, Tanjung Emas Harbor, and is passed by the Trans Java Toll Road, the Pantura Line, and the Jakarta-Semarang-Surabaya Dual Railroad Track.

In article 2, it is also explained that the Kendal SEZ will be located on 1,000 hectares of land located in Kaliwungu District and Brangsong District, Kendal Regency.

The Kendal SEZ will be divided into 3 zones which carry out 3 functions. The zones in question include export processing zones, logistic zones, and industrial zones.

In the PP, it is stated that Kendal's geostrategic advantage is that there are export-oriented industries, import substitutions, high-tech products, and application-based supporting industry 4.0.

The government itself is targeting that 17 SEZs in Indonesia will be realized this year. The government will add two new special economic zones, namely for the digital sector. The two new SEZs are Nongsa Digital Park in Batam, Riau Islands, and Kendal Industrial Park, in Kendal, Central Java.

The Coordinating Minister for Economic Affairs for the 2014-2019 period, Darmin Nasution had said he would add facilities at Nongsa Digital Park as the area turned into SEZ. "As a Digital Park of course he is very focused on activities that are digital in nature, including education," Darmin said in Singapore, Wednesday 9 October 2019.

According to Darmin, Singapore considers the Kendal Industrial Estate to be less attractive despite a lot of investment in it. Therefore, when President Joko Widodo met with Singapore Prime Minister Lee Hsien Long in Bali in 2018, Lee proposed that the area be converted to SEZ.