ICOR in Indonesia’s Special Economic Zones Below National Target

JAKARTA, Dec 10 2025 – The government reports that the Incremental Capital Output Ratio (ICOR) in the 25 operating Special Economic Zones (KEK) ranges from 2 to 4, well below the national average of 6. Deputy for Energy and Mineral Coordination, Elen Setiadi, presented the figures at a briefing on Thursday (10/12/2025).

ICOR measures the output generated per additional unit of capital, so a lower ratio indicates higher output with less investment. President Prabowo Subianto’s target is an ICOR of 4 or lower, meaning the KEK performance meets or exceeds the goal. Vice Minister of Investment and Downstreaming, Todotua Pasaribu, noted that downstream investment in KEK has reached Rp431 trillion (13.1 % of total realization) and that licensing procedures have been streamlined using a positive fictitious mechanism and Service Level Agreements (SLA).

The reduced ICOR in KEKs signals efficient capital use and attractive returns for investors, which can bolster national economic growth. The government expects that regulatory reforms and integrated infrastructure will continue to draw downstream investment and expand production capacity over the long term.