Antara News·Indonesia·Wednesday, October 21, 2026 at 10:05 AM UTC

Indonesia pushes special economic zones to reach 8 pct growth target

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Bayu, Kenzu

..improving efficiency in special economic zones and industrial estates was one way to lower ICOR and accelerate economic growth.

Jakarta (ANTARA) - Coordinating Minister for Economic Affairs Airlangga Hartarto said the development of special economic zones (SEZs) needed to be accelerated to help Indonesia achieve its 8 percent economic growth target.

“(SEZs) are among the areas that must continue to be developed. If we invest with an ICOR (Incremental Capital Output Ratio) of 4, the 8 percent growth target can be achieved,” he said at a coordination meeting on ministry and institutional support for special economic zone development in the third quarter of 2026 on Wednesday.

According to Hartarto, the zones have higher investment efficiency than the national average. This is reflected in the national ICOR of 6.1, compared with an average of below 4 in the zones.

He explained that a lower ICOR indicates greater investment efficiency, which is an important factor in achieving the economic growth target. With a lower ICOR, investment can generate stronger economic growth than under current conditions.

Hartarto added that improving investment efficiency was essential to maximizing investment’s contribution to the economy.

“Going forward, the SEZs are expected to drive economic growth. Nationally, our ICOR is around 6, while in the zones it averages below 4,” he said.

He also said that improving efficiency in special economic zones and industrial estates was one way to lower ICOR and accelerate economic growth.

Furthermore, Hartarto said Indonesia still had considerable room to expand its special economic zones compared with several regional countries, including Vietnam and Malaysia. He said the zones in those countries covered around 1.8 million to 2 million hectares.

In Indonesia, by contrast, special economic zones cover only about 24,000 hectares.

The government recorded cumulative investment realization in the SEZs at Rp382.1 trillion from 2012 through September 2026, generating employment for 302,262 workers and involving 509 business entities. Investment in the SEZs from January to September 2026 reached Rp46 trillion, equivalent to 67 percent of the target of Rp69.1 trillion set for the full year.

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