East Java Tourism News

Gresik to be developed as a special economic zone

October 7th, 2008

East Java is to develop the Gresik regency as an economic zone with special regulations and tax and import concessions, to attract investors and boost provincial economic growth.

The province is one of 17 areas nationwide proposed for inclusion under the special economic zone bill, which the House of Representatives began deliberating in September.

Assistant to the East Java governor on economic and development affairs Chairul Djaelani said here over the weekend that the proposed improvement of the status of Gresik to a special economic zone was aimed at boosting provincial exports.

“With the special economic zone, East Java is expected to expand exports by 100 percent to US$22 billion per year, a realistic target for the province, considering the current level of exports,” he told The Jakarta Post here on Saturday.

The province’s export volume rose markedly to $11 billion in 2007 from $9 billion in 2006.

Other provinces proposed to become special economic zones include North Sumatra, Riau, South Sumatra, Banten, West Java, Central Java, South Sulawesi, Central Sulawesi, West Kalimantan, East Kalimantan, North Sulawesi, Papua, Bengkulu, Jakarta, Maluku and Bangka-Belitung.

Asked for the logic behind the proposal, Chairul said Gresik was located in a strategic position on Java’s crowded North Coast and had its own port to facilitate exports and imports.

“The port can be diversified to cover the northern coast of Madura and developed to international standards,” he said, adding that the incentives and facilities to be offered would be greater than those given under the free trade zone, as previously developed on Batam Island in the Riau Islands province.

The bill offers various facilities and incentives, including some tax exemptions as well as reductions in taxes and import tariffs for certain periods. “Tax reductions or exemptions will given to companies providing training programs to improve workers’ competence, housing and transportation,” said Chaerul.

Regarding customs and excise concessions, special economic area authorities will propose reduced duties and tariffs on imported goods and immigration authorities will give prospective investors short visa facilities or visa on arrival for investors for 30 days, instead of the current seven days, as well as multiple re-entry facilities.

Secretary of the national team handling the special economic zones, Bambang Susantono, said recently that many provinces have submitted their draft laws for consideration by the House but none has yet been processed because the deliberation of the umbrella legislation has not been completed.

“The development of the special economic zones is aimed at improving Indonesia’s role in the world trade,” he said, mentioning that Indonesia has already played a feeder role for Singapore in terms of industry and trade. –JP/Wahyoe Boediwardhana

Source: The Jakarta Post

Entry Filed under: East Java News