April 1, 2019 / 5:35 AM / 21 days ago

Indonesia launches three economic zones, eyes $7.7 bln investment

JAKARTA, April 1 (Reuters) - Indonesian President Joko Widodo on Monday launched three special economic zones (SEZs) across 2,200 hectares of land at the eastern part of the archipelago in a fresh bid to attract investment and spur economic growth in less developed areas.

The government aims to attract 110 trillion rupiah ($7.73 billion) investment in the SEZs - in East Kalimantan, North Sulawesi, and North Maluku - and create 120,000 jobs by 2025, according to a statement from the coordinating ministry for economic affairs.

Investors in the SEZs get preferential treatment such as removal of import duties for manufacturing of export goods, as well as easier land and employment rules, including allowing expatriates to own properties within the zone.

“We hope that the existence of SEZs will grow manufacturing and other industries so that we will no longer export raw materials, but products with higher added value,” the statement quoted Widodo, in Manado, North Sulawesi for a launch ceremony, as saying.

Widodo has had mixed success with his reform agenda since taking office in 2014, promising to transform Southeast Asia’s largest economy by reviving manufacturing and lifting growth to 7 percent.

Annual growth has remained around 5 percent in recent years, while foreign investment last year was weak despite the president’s efforts to improve investment climate

Widodo is running for re-election on April 17 against former military general Prabowo Subianto, who has criticized his economic track record. In 2014, Widodo defeated Prabowo, to win a five-year term

Monday’s government statement said the three new SEZs have attracted a combined 5.24 trillion rupiah of investment commitments. These include ones from PT Jababeka Morotai, a unit of industrial estate developer PT Jababeka and Kilang Kaltim Continental, a crude oil refinery operator, subsidiary of Canadian Continental Energy Corporation.

$1 = 14,225 rupiah Reporting by Tabita Diela; Writing by Gayatri Suroyo; Editing by Richard Borsuk

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