"The number of KEKs is still below expectations," Nasution said here Thursday.
One of the hindrances to the development of KEKs is the preference of people to invest their funds in Java, according to Nasution.
Regulatory uncertainty, as well as ambiguous regulations on the special economic zones, have also stopped investments in the development of KEKs.
The government has worked on improving the investment climate by allowing the development of KEKs based on the natural resource development in Java, Nasution said.
"It should focus on the export-oriented industry or import substitution which exists in Indonesia. Another criterion is high-tech based," he added.
The government has proposed to revise the regulations regarding the relaxation of KEK development as well as its incentive scheme that would need the president's approval.
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The government has worked closely with the Indonesian Chamber of Commerce and Industry (KADIN) to accelerate the development of KEKs as centers for economic growth, Nasution said.
"The cooperation with KADIN is crucial, because the more KEKs we have, the more important it would be for us to convince investors," he elaborated.
The government has targeted the establishment of 17 KEKs by the end of 2019, according to the medium term development planning for 2015-2019.
However, of the total KEKs, only 10 of them have been fully operational while three are still under construction.
Up to October, the commitment of investment in KEKs across the country has reached Rp85.3 trillion that would absorb 8,686 workers.
However, the realization of investment in KEKs has been recorded at only Rp21 trillion. (INE)
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