Minister encourages development of industrial zones to drive growth

Minister encourages development of industrial zones to drive growth

Industry Minister Agus Gumiwang Kartasasmita delivers an opening speech at the Dialogue Meeting for Priority Industrial Estate Development in Jakarta on Tuesday (December 10, 2019).

Of the 103 industrial zones already operational, 58 are located in Java
Jakarta (ANTARA) - Industry Minister Agus Gumiwang Kartasasmita is encouraging the development of industrial zones in a bid to facilitate and accommodate higher investment to boost national economic growth.

"This strategic move is in accordance with the mandate of Law Number 3 of 2014 on Industry, since the industry must be inside the industrial area," the minister stated at the Dialogue Meeting for Priority Industrial Estate Development in Jakarta on Tuesday.

Kartasasmita remarked that 103 industrial zones were currently in operation, with a total area of 55 thousand hectares. Meanwhile, 15 industrial zones are yet under construction and 10 industrial zones are in the planning stage.

"Of the 103 industrial zones already operational, 58 are located in Java," he revealed.

The rest 33 industrial zones are located on the island of Sumatra, eight industrial zones in Kalimantan, and four in Sulawesi. There has been an increase of up to 20 industrial zones since 2014.

Kartasasmita highlighted that in a bid to encourage inclusive economic equality, the government has planned to develop industrial zones outside Java Island.

Going forward, the industrial zones on Java will prioritize the development of high-tech industries, labor-intensive industries, and industries with low water consumption.

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In the meantime, industrial zones outside Java are more focused on natural resource-based industries, boosting the efficiency of logistics systems, and driving the development of industrial zones as new economic centers.

"The development of these new economic centers needs to be integrated with regional development, including in infrastructure development, so that it can have a maximum positive effect on regional economic development," he remarked.

Industrialization has, so far, had a broad multiplier effect on the national economy, ranging from an increase in the added value of domestic raw materials and absorption of local labor, to foreign exchange earnings from exports.

According to the Industry Ministry, investment in the industrial sector in the first semester of 2019 had reached Rp104.4 trillion. The metal, machinery and electronics industries emerged as the biggest contributor to investment, reaching Rp266.13 trillion, followed by the food industry, at Rp257.47 trillion.

Moreover, the chemical and pharmaceutical industries contributed Rp217 trillion to investment; the non-metallic mineral industry, Rp98.75 trillion; and the motorized vehicle industry and other transportation equipment, Rp96.70 trillion.

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