Competitiveness of Free Trade Zone Area: Comparison between Indonesia & ASEAN Countries

The objective of the Indonesian economic policy is to alleviate poverty and increase employment. The existence of Free trade zone area or special zones (SEZ) have been proven to help countries in fostering economic growth. Some of the key characteristics of successful zones are that they offer immediate access to high quality infrastructure, clearly titled land, facilities, and support services. In addition streamlined regulatory enforcement, simpler business establishment rules, expedited customs administration and other special administrative and approval procedures are also offered in such zones.This paper is trying to help the government to improve FTZ policies in Indonesia by providing a benchmark to other FTZ countries such as China, India, Malaysia, Thailand, and Vietnam. While China has the most established SEZ program, Malaysia and Thailand also have highly-regarded SEZs and investment incentives. Vietnam and India have gotten into the SEZ competition more recently and are still working out kinks in their policies. Those neighboring countries have developed SEZs in significant quantities but the greatest returns have come from a subsection of large-scale zones with favorable locations, good planning and access to resources. Thailand has a smaller number of Zones, but a higher rate of successful zones. How the position of Indonesia compare to nine Asean countries is becoming the main question of this study.