Airlangga Hartarto - Photo: Industry Ministry

JAKARTA (TheInsiderStories) – The Indonesian government continues to stimulate economic growth by promoting investment potential and local industries to investors, including investment potential in industrial zones.

In 2018, the government will continue to support the development of a number of integrated industrial areas by expediting investment of new business. Minister of Industry Airlangga Hartarto announced that the government has set a target of Rp250.7 trillion (US$18.6 billion) in investment for a total of 13 Industrial Zones.

The projects namely Sei Mangkei, Banten, Morowali, JIIPE Gresik, Kendal, Wilmar Serang, Dumai, Konawe, Palu, Bitung, Ketapang, Lhokseumawe (Aceh) and Tanjung Buton.

The Ministry of Industry plans to conduct road shows to placate investors, promoting the regulatory reforms carried out by the government in recent years to attract investors.

“The government has eased investment procedures for industrial areas through, among others, provision of both fiscal and non-fiscal incentives, and a task force specifically dedicated to the provision of gas, electricity, water, human resources, land and so on,” he explained in a statement on Sunday (7/1).

The Ministry will provide the manufacturing industry, a main contributor to gross domestic product, with three tax incentives in order to boost the country’s economy, which has suffered from slow growth in recent years.

The government will offer a 200-percent tax allowance for manufacturers who invest in vocational programs to improve training and upgrade skills of their workers.

The second incentive is for those who invest in innovative products, for which the government would offer 300 per cent in tax incentives against the value of the investment.

The third is incentives for labor-intensive industries that focus on exports, where the incentive will depend on the number of workers employed in the industry, the Minister said.

In full-year 2018, the government wants to see a 5.67 per cent year-on-year (y/y) growth pace for manufacturing, higher than the estimated 4.7 per cent (y/y) growth pace recorded in 2017. Investment in this sector is projected to reach Rp352 trillion ($26.2 billion).

The ministry noted that non-oil and gas industry exports until November of 2017 amounted to $114.67 billion, up 14.25 per cent compared to the same period in 2016, where they recorded about $100.36 billion. Non-oil & gas exports (processed products) contributed up to 74.51 per cent of total national exports until November 2017, marking $153.90 billion.

US$1: Rp13,400

Written by Elisa Valenta, Email, elisa.valenta@theinsiderstories.com

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