The Mandalika Special Economic Zone (KEK Mandalika) Becomes Operational

The Mandalika Special Economic Zone (KEK Mandalika) began operations after being launched by President Joko Widodo (Jokowi) on Friday

The Mandalika Special Economic Zone (KEK Mandalika) began operations after being launched by President Joko Widodo (Jokowi) on Friday

The KEK Mandalika is developed for the tourism industry as well as for natural and cultural preservation. Having a total area of 1,250 hectares, the special economic zone is managed by Indonesia Tourism Development Corporation (ITDC) and offers natural beauty and other attractions.

Coordinating Minister for Economic Affairs Darmin Nasution, who accompanied President Jokowi to the launch ceremony, stated that the completion of the KEK Mandalika will support the local economy by combining the tourism and industry sectors.

“In order to improve the welfare of the community, this effort is necessary since our communities are in urgent need of infrastructure as the basis of their endeavor,” the minister noted.

KEK Mandalika is projected to have two thousand hotel rooms, world-class racing circuits, convention centers, and seven hotels by 2019.

The main concern for managing the zone is maximizing the KEK Mandalika to improve the day-to-day lives of the locals, so they are part of the regional development.

“Benefits to the community have actually been observed to rapidly transcend beyond the zone. Before the development was initiated, the local people had started building homestays, cafes, and other creative industries. It only needs a sound arrangement and certain standards to create an interesting environment around the KEK Mandalika,” Nasution said.

State equity worth Rp250 billion (US$18.48 million) was channelled to build the basic infrastructure of the KEK Mandalika. ITDC has recorded Rp13 trillion ($961 billion) worth of investment flows, with Rp4.1 trillion ($303 million) currently being used to cover the construction of five-star hotels: Pullman Hotel, CludMed Hotel, Royal Tulip Hotel, X2 Hotel, and Paramount Hotel.

The government has designated 12 special economic zones of which eight are focusing on the manufacturing sector and four are prioritizing tourism. Among the special economic zones that are already operational are the KEK Sei Mangke in North Sumatra, KEK Tanjung Lesung in Banten, KEK Palu in Central Sulawesi, and the KEK Mandalika.

By the end of this year, two additional zones — KEK Lhokseumawe in Aceh and KEK Galang Batan in Bintan — are expected to become operational, while the six other zones will start operations in the first half of 2018.

Until July 2017, investment commitments made to develop the 12 economic zones had reached Rp221 trillion ($16.34 billion).