Indonesia attracts $18.63 bln investment in special economic zones

Indonesia has drawn a total of $18.63 billion in investment into its special economic zones (SEZs) over the past five years, creating more than 187,000 jobs, according to the Coordinating Ministry for Economic Affairs.

Investment realization in the first half of 2025 alone reached $2.56 billion, equivalent to 48.2% of the annual target. This growth generated 28,094 new jobs and attracted 65 businesses to operate in SEZs, Susiwijono Moegiarso, Secretary of the Ministry, said at a press briefing on Tuesday.

Indonesia currently has 25 SEZs, including 18 located outside Java. Of these, 13 focus on industry while 12 are service-based. Kendal, Gresik and Galang Batang are among the zones attracting the highest investment flows.

Susiwijono noted that most of the capital has been channelled into the processing and manufacturing sectors. Smaller investments have gone into education, healthcare and the digital economy, which are nevertheless expected to expand strongly in the years ahead.

SEZs are also making a growing contribution to Indonesia’s exports. Between 2021 and mid-2025, exports from SEZs reached IDR82 trillion ($5.19 billion), led by Galang Batang (alumina), Kendal (battery anodes), and Gresik (copper).

Rizal Edwin, Secretary-General of the National Council for Special Economic Zones, said the country’s 25 SEZs are still modest compared with those of other ASEAN countries such as Malaysia and Vietnam. He underlined the need for additional incentives to diversify sectors and attract more investors.

The Indonesian government has pledged to further develop SEZs, particularly in healthcare and digital education. These zones are expected not only to draw investment and generate employment, but also to contribute more significantly to GDP and Indonesia’s long-term goal of sustainable economic growth.

Rizal also highlighted the potential for stronger cooperation between Indonesia and Vietnam, noting that the two countries share many similar export products but are not in direct competition.

Instead, he said, both sides can complement each other in developing markets, particularly through collaboration in SEZs, which could bring mutual benefits and support economic growth in both nations.