Friday, August 11, 2006

Special Economic Zones: From KAPET to KEKI

We love abbreviations. During the last years of Soeharto regime, we knew KAPET (Kawasan Ekonomi Terpadu) or Integrated Economic Zone. Now, we have another name, Kawasan Ekonomi Khusus Indonesia (KEKI) or Special Economic Zones. Would it make any difference in attracting investment?

Soeharto administration had established 13 KAPETs with beautiful names. They are Bandar Aceh Darussalam (Aceh), Khatulistiwa (West Kalimantan), Sasamba (East Kalimantan), Batulicin (South Kalimantan), DAS Kakab (Central Kalimantan), Manado Bitung (North Sulawesi), Bukari (South East Sulawesi), Parepare (South Sulawesi), Bima (West Nusa Tenggara), Mbay (East Nusa Tenggara), Seram (Maluku), and Biak (Papua).
Government even established a website dedicated to promote KAPETs at As far as I remember, many times Soeharto regime and then followed by BJ Habibie administration, promised to give incentives to those who want to invest in KAPETs. I checked the organization's website on the incentive topic, unfortunately I found no information. Then I tried to click 'government support', similar results, big zero.
That's probably the reason why I never read news about major investment in these KAPETs in the last few years.
Early this year, government promised to revitalize KAPETs, and as usual, claimed to review the possibility to give fiscal incentives on top of custom and import duty incentives available at the moment. That's the latest until all of a sudden everybody switches the gear to KEKI with the same-old-promises.
The only difference is that KEKI could be everywhere, open for initiative from local or regional administrations as long as they could meet the 12 requirements (to be drafted, no details yet). That's why Jakarta Governor Sutiyoso entered the KEKI game today saying his administration is ready to have Jakarta as one of the KEKIs, following other areas like Batam, Bintan & Karium in Riau Island Province.
Well, I could only hope that this time government really deliver its promises. I can't stand to have another name a decade later with empty promises again. We really need investment to create more jobs and improve our people's quality of life.

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