Development zones to be reviewed

The Jakarta Post, Jakarta

President Megawati Soekarnoputri has instructed the Minister for the Acceleration of Eastern Indonesian Development, Manuel Kaisiepo, to review the Integrated Economic Development Zone (Kapet) program due to slow progress in attracting investments.

Coordinating Minister for the Economy Dorodjatun Kuntjoro- Jakti said, following a limited Cabinet meeting on the economy on Thursday, that the President had given a month for the review to be completed.

The Kapet program was first launched by former authoritarian president Soeharto six years ago amid growing resentment at the time that development, particularly in eastern Indonesia, had been lagging behind other regions.

Currently there are 13 economic development zones, including 12 in the eastern part of Indonesia. These economic development zones had been expected to attract private sector investments, including foreign investors, to drive growth in region.

But Dorodjatun said that progress had not been as expected and that was why it must be reviewed.

He said that one of the problems was the lack of support from the banking sector.

Dorodjatun said that there were only six development zones which had been effective in attracting private sector investment. These were development zones in Sanggau in West Kalimantan, Sasamba in Central Kalimantan, Batulicin in South Kalimantan, Bitung in North Sulawesi, Pare-Pare in South Sulawesi, and Biak in Papua.

Dorodjatun said that he would promote the development zones at the upcoming ASEAN ministerial meeting in February in Manado, North Sulawesi, to attract more investment to the area.

Accelerating economic development in the eastern part of Indonesia is seen as a crucial measure to help ease the rising separatist demands in the region which had been relatively neglected during the government of the Soeharto regime.