The establishment of the Johor-Singapore Special Economic Zone (JS-SEZ) in the Malacca Strait has drawn parallels to Indonesia's successes in developing its own Special Economic Zones (SEZs). Coordinating Minister for Economic Affairs Airlangga Hartarto acknowledged the influence of Indonesia’s approach while emphasizing the need for competitive innovation.

“We cannot bar other countries from copying us. What we can do is compete against them,” Hartarto remarked during the 2025 IBC Business Competitiveness Outlook event.

A Regional Response to Indonesia’s SEZ Success
The JS-SEZ, formalized through an agreement between Malaysian Prime Minister Anwar Ibrahim and Singaporean Prime Minister Lawrence Wong, aims to drive regional economic development and attract global investment. Hartarto highlighted that Indonesia’s SEZ model—especially in critical mineral processing and digital innovation—has become a benchmark for neighboring nations.

Indonesia’s SEZs, established across 24 areas, have facilitated investments of Rp256.7 trillion (US$15.78 billion) since 2012, creating over 156,000 jobs. In 2024 alone, SEZs secured investments worth Rp82.6 trillion (US$5.08 billion) and generated employment for nearly 43,000 people.

Driving Innovation in Critical Minerals and Technology
According to Hartarto, Indonesia’s ability to derive value from critical mineral commodities has set a precedent that Malaysia and Singapore aim to replicate. “They want to imitate this in digital innovation, including AI (artificial intelligence) or cloud computing,” Hartarto noted, adding that Indonesia’s diversified SEZs cover sectors like manufacturing, health, education, and aircraft maintenance.

Opportunities and Challenges
While Indonesia’s SEZs are paving the way for regional development, the rise of the JS-SEZ presents an opportunity for healthy competition. Experts suggest this rivalry could spur further innovation and investment in Southeast Asia.

However, maintaining Indonesia’s competitive edge will require continued focus on policy reforms, technology adoption, and expanding SEZs to accommodate emerging industries.

Indonesia’s Vision for SEZ Leadership
By leveraging its established infrastructure and expertise, Indonesia is positioning itself as a leader in SEZ development within the region. Hartarto’s comments underscore the nation’s commitment to staying ahead through innovation and adaptability.

“Their imitation is a testament to our success, but we must ensure our SEZs remain dynamic and forward-thinking,” he concluded.

As regional cooperation and competition grow, the role of SEZs in shaping Southeast Asia’s economic landscape is set to become even more pivotal.