Tanjung Lesung Special Economic Zone: Expectation and Reality 50

Many countries have developed Special Economic Zones (SEZ) to spur economic growth. In Indonesia, SEZs have been around for more than a decade. However, the existing SEZs have not yielded the expected results. Likewise with the Tanjung Lesung Tourism SEZ, which is still facing major obstacles in its development. Studies related to the dimensions of the SEZ policy have not been fully carried out, specifically those related to local government involvement. This study aimed to analyze government policy in supporting the development of SEZ, particularly in Tanjung Lesung. This study used a descriptive method with a qualitative approach. This study showed the many obstacles faced for the development of the Tanjung Kelayang SEZ, both of which stem from the weak commitment of the parties involved. Their attitude of blaming each other needs to be changed with the teamwork spirit of working together and creating synergy. Each party seems to wait for each other to make the first move. The limited resources and capabilities caused the policy implementation to come to a halt. The role of the Area Council (Dewan Kawasan) needs to be further optimized to solve problems at the local level. With better information, the central government, through the Directorate General of Territorial Administration Development, Ministry of Home Affairs, can play a more pivotal role in providing strategic considerations in driving the progress of SEZ.

(United Nations Conference on Trade, 2019). The latest data also states that the average area of SEZs in the world is 905 hectares. The largest SEZ is in Vietnam, reaching 58 thousand hectares (Ishida, 2015, p. 27). The problems faced by the SEZs are quite diverse, ranging from difficulties in land acquisition, the influence of the global economy, to having to compete with other SEZs. In Asia, China has the highest number of SEZs, with a total of 2,543 SEZs (Dodwell, 2019). At the time of this study, Indonesia has 15 SEZs. Sei Mangkei and Tanjung Lesung are the earliest SEZs established and have been operating since 2015 (Olivia, 2020). The number of Indonesia's SEZs are relatively low compared to other ASEAN countries, such as the Philippines, which has 532 SEZs, and Cambodia, which has 35 SEZs. (Ishida, 2015). However, no matter how supportive the regulations are, none of the Indonesian SEZs perform well; they even tend to perform quite the opposite (Uli, 2019 Kartini et al. (2017), as well as Meliana and Buchori (2016). The three studies concluded that the Tanjung Lesung SEZ did not show significant development, and some problems were identified.
For example, Kartini (2019) mapped conflicts that occurred between the developer and the local residents. Likewise, Kartini et al. (2017) stated that the regional government policies were pragmatic and have not provided a solution for the development of SEZs. These problems are reinforced by the results of a study by Meliana and Buchori (2016), which mentions that regional government institutions in the development of Another study on SEZ was conducted by Rustidja, Purnamawati, and Setiawati (2017), which provided an analysis of the Mandalika and Bitung SEZ strategies. The Mandalika SEZ emphasizes the strategy of promoting its competitiveness and its tourism networks. While Bitung is more focused on promotional strategies to increase its logistics-value-added, benefit, and industrial supply chains, a study by Darmastuti, Afrimadona, and Kurniawan (2018) compared the management of SEZs in China and Indonesia.
According to the study, the success story of China's SEZs were due to the high commitment from both the central and regional governments to develop the regions that are already designated as SEZs.
The study also concluded that the government's coordinative ability was very important for the success of SEZs. Furthermore, SEZs in China succeed because they were under centralized control, a government system that tends to be authoritarian. Thus, compliance in advancing the SEZ is higher.
Studies on SEZs are also the focus of researchers throughout the world. Saeed (2019) discussed Oman's strategy in the development of SEZs in Duqm. Duqm is the largest SEZ in the Middle East and North Africa, which combines eight business areas, such as the heavy-medium and light industrial complex, port, dry dock, oil refinery, tourism area, logistics service area, regional airport, and commercial housing area.
The study concluded that many incentives were provided for investors, such as income tax exemption for up to 30 years, extendable for similar periods. Other incentives were 100% of land owned by foreign investors, easy labor recruitment, and the import of raw materials into the tax-free zone Duqm SEZ was an ideal example of an integrated SEZ. Another study related to SEZ in the world was conducted by Moberg (2015), which concluded that a strong political economy in SEZ policy depends on the strong institutional capacity, which was responsible for controlling fair incentives for the government and private sector involved, and the transfer of knowledge to stakeholders in a balanced and accurate manner to limit the possibility of corrupt behavior. Wong and Buba (2017)

Methods
This study focuses on regional government policy in encouraging the implementation of the Tanjung Lesung SEZ. This study used a descriptive method with a qualitative approach. This was a suitable approach since the policy on SEZ was multidimensional (Alwasilah, 2003). To describe this phenomenon, the perceptions of the various parties involved were examined and a review of various supporting documents on SEZ policies was conducted. The data collection consisted of using an in-depth interview technique and group discussions. Secondary data was obtained from electronic and physical documents as well as news in the mainstream mass media to enrich the analysis. Field research was conducted during February-March 2020.

Results and Discussion
Tanjung Lesung was designated a National The advantage of the Tanjung Lesung SEZ is its location close to the iconic Ujung Kulon National Park, the only park in the world that has a rare one-horned rhinoceros. This potential needs to be the main focus for the SEZ to attract tourists (Bagiryan et al., 2018).

Tanjung Lesung Special Economic Zone: Expectation and Reality 54
The Role of The Regional Government Thus, it can be concluded that Tanjung Lesung was not part of the regional development priorities.

Focus in the Buffer Area
In the development of the Tanjung Lesung area and its surroundings, the Provincial Government and the Regency Government mapped the Tanjung Lesung area into two zones: the core zone and the buffer zone. The development of the core zone Tanjung Lesung SEZ, covering an area of 1500 hectares, was carried out by PT. BWJ. The regional governments, both the district and provincial governments, consider that they have no authority to intervene in the development of the core zone area.

Issues in Developing the SEZ
The slow development of Tanjung Lesung SEZ was due to the low investment attractiveness Tanjung Lesung Special Economic Zone: Expectation and Reality 56 (Pebrianto, 2018). There were many factors involved, such as infrastructure and accessibility, incentive guarantees, land issues, and synergy between SEZ management.

Infrastructure and Accessibility
The main obstacle for the Tanjung Lesung SEZ was the access routes to the area, which takes about seven hours of travel time from Jakarta.
Ideally, the road to SEZ should be no more than two hours from the nearest airport. There was nothing much that the regional government and PT BWJ could do about this situation. They Toll road construction will be carried out in three sections. Section I of Serang-Rangkasbitung is 26.5 km, section II Rangkasbitung -Cileles is 21.17 km, and section III Cileles -Panimbang is 33 km (Indraini, 2020). In reality, the toll road construction progress was lagging from the target.
The Section I Toll Road Construction Section I was forced to be delayed, and the target was shifted to be completed by mid-2020 (Kinanti, 2019).
Section II started its construction phase and is expected to operate in 2021. Section III In addition to the toll road, the Pandeglang government also hoped that the construction of the South Banten Airport would be carried out soon. Airports and toll roads would bring in new growth centers and would increase financial viability in the region. The airport is one of the main requirements for the establishment of SEZ (Reddy & Reddy, 2007). Similar to the toll road, South Banten Airport was also constrained by land acquisition.

Waiting for incentives
Economic zones generally encounter the Their reason was that they could not keep up with the changes in regulation from the central government. Many rules changed before the region finished studying the old one. The discussion on incentives at the district level was also dragging on at the level of the Regional Representative Council (DPRD) of the district. According to the Pandeglang District government, at the time of the study, the regional incentives were in the Regional Legislation Program (Prolegda).
The regional incentive regulation will later be combined with the new authority in the new government regulation regarding SEZ. This was done because producing a regional regulation requires a significant amount of money.
Generally, the management of regional incentives was unevenly applied; sometimes applicants received different treatments. Regional incentives also had not been fully implemented, although through a regional regulation, the form, amount, and procedure for lessening, reducing, and exempting regional taxes and/or regional fees to business entities and/or business actors in SEZ could be regulated, as mandated by Government has not yet been conveyed to the regions.

Land Issues
The slow development of the Tanjung Lesung SEZ was also due to land acquisition issues. According to some information, from the required 1500 hectares of land, only 1430 hectares successfully acquired. Approximately 70 hectares were having issues in land acquisition.

Tanjung Lesung Special Economic Zone: Expectation and Reality 58
The delay in land acquisition was supposedly due to the conflict between PT. BWJ as a manager of the SEZ and the local community. Meanwhile, the government was considered too neutral and unable to push for conflict resolution (Kartini, 2019). Tensions related to a land acquisition between the community and PT BWJ often occurred (Faktabanten.co.id, 2018). To encourage the Tanjung Lesung SEZ, the central government targeted to develop regional infrastructures, such as the Serang-Tanjung Lesung national road, the Serang-Panimbang toll road (planned for completion in 2018), the South Banten Airport, and reactivation of the Rangkas Bitung-Labuan railroad (Siregar, 2019).
Considering the country's financial condition is in a deficit position, the target would certainly be constrained. For example, the construction of the Serang-Panimbang toll road, which originally targeted for completion in 2018, will be delayed to be fully operational in 2022, and at the time of the study was only at the auction stage. This target was a three years delay from what was previously expected to be completed at the end of 2019 (Indraini, 2020).

Poor Coordination
The slow development of the Tanjung Lesung SEZ is also inseparable from the lack of coordination between the Regional Council under the province, and the SEZ Administrator under the district. The Secretariat of the SEZ National Council admitted that the Zone Council has not been able to assist the National Council. The Zone Council has not been able to take inventory of the issues and resolve strategic issues in the field.
Many problems in the field should be able to be resolved by the Zone Council. Instead, several issues within the Administrator or in the regions were immediately escalated to the National Council.

The Banten Provincial Tourism Office as the
Zone Council did not conduct coaching or assisted SEZ administrators. Coordination with the Regional Council was also rarely conducted, only once a year during the financial and development supervision reviews.
Coordination problems also occurred related to licensing (Wahyuni et al., 2013). In The Banten Bappeda considered the problem was not due to the provincial government, but it was the PT BWJ problem that has the difficulty of attracting visitors. According to the Bappeda, the development of national and provincial roads to locations was also not matched by developments within the zone. That was also apparent when we visited the location. From the entrance gate, the road in the SEZ area was not in good condition and was flooded despite some not-so-heavy rainfall.
On the right and left of the road, the weeds grew wild. Some faded investment invitation banners were seen in some corners (Pakdeenurit et al., 2014). This was similar to what was stated by (Alexianu et al., 2019) that no government body was specifically formed to support the implementation of SEZ policies. The SEZ policy interventions in the regions were varied, not only emphasizing regional aspects, but also the regional financial aspects, the implementation of programs and activities, and the organization of regional apparatuses. For these three aspects, the Tanjung Lesung Special Economic Zone: Expectation and Reality 60 Ministry of Home Affairs has various Directorate Generals, including the Directorate General of Regional Financial Development to oversee the implementation of regional taxes and levies, the Directorate General of Regional Development for evaluating programs and activities in regional development planning, and the Directorate General of Regional Autonomy to oversee organizing regional apparatus.

The Banten Provincial Tourism Office
At the time of the study, SEZ management was under the coordination of the Directorate General of Regional Administration However, the limitations of the structure and substance of the policy need to be addressed. Furthermore, the Directorate General of Regional Development Supervision and the Directorate General of Regional Financial Development Supervision oversee the substance of the policies related to SEZ to ensure that it would be carried out properly, with or without the role of the Directorate General of Regional Administration.
Overseeing the financial policies and regional incentives would be quite difficult to be conducted optimally by the Directorate General of Regional Financial Development Supervision due to the high load of work in that Directorate (Gudkov et al., 2017). The Ministry of Home Affairs never received a progress report from the Tanjung Lesung SEZ. As a result, the Ministry of Home Affairs did not have the necessary information to provide policy improvements. The difficulty in getting data was due to bureaucracy. The Ministry of Home Affairs must ask permission from the Coordinating Ministry for the Economy as the KEK National Council to request the data. Thus, it can be concluded that the function of supervision and guidance carried out by the Ministry of Home Affairs on the region is not effective (Damuri et al., 2019).
As a member of the SEZ National Council, the Ministry of Home Affairs also briefly supervised the Banten provincial government. To accelerate development, the Directorate General of Regional Administration (Ditjen Adwil) of the Banten Provincial Government was responsible for completing the construction of the 33-kilometer Section III toll road (Cileles-Panimbang). However, the Banten provincial government complained about that, because the regional fiscal capacity was lacking to build the Section III toll road.
The Ditjen Adwil considered that the Tanjung Lesung SEZ had no appeal because its management was unable to conduct the regional branding. Many ways could be conducted by the SEZ, such as established transit points in the Anyer area and developed sea transportation to the SEZ. These methods were carried out by several tourist destinations, such as from Lombok to Gili Trawangan. Transit points would automatically encourage tourism activities. There would be no need to wait for toll roads, that costs a lot of money and takes a long time to construct (Hutomo, 2018).
Tanjung Lesung SEZ issues were also related to authority. The regional government, where the SEZ located, was not actively involved.
They were only involved concerning the location and land acquisition, while the master plan and development planning were left entirely to the SEZ management. In reality, development within the zone was often different from the masterplan.
Tanjung Lesung SEZ, for example, shifted its focus from the original focus on the sea to land management (Banten, 2017). This shows the weak coordination between government and management. As a result, regional development commitments were not a shared responsibility.
Instead, it created a heightened conflict between the regional government where the SEZ located, and the SEZ business entities.
The weak coordination was not only between the regional government and the business entities but also between the regional government and the SEZ National Council. Pemerintah daerah menganggap pemerintah pusat ingin memegang kendali kawasan, tanpa melibatkan pemerintah daerah, although the regional government had to 61 Policy & Governance Review | January 2021 prepare other supporting facilities when the SEZ area was determined. The regional government also did not have a sense of ownership to the SEZ and did not have a comprehensive picture of the impact of investments made in the zone and outside the zone for the region's development progress (Aritenang, 2017). There are at least three important characteristics that require the government's attention in creating an SEZ. First, the SEZ must be able to provide relief in tariff and tax policies that are far more attractive than those outside the SEZ.

Conclusion
Ease of licensing will also be a determining factor in boosting the investment value in SEZs. Second, SEZs need to be supported with superior infrastructure or exclusive access. Third, SEZs need professional support from all lines of government.
This study shows that the provincial government as the Zone Council has not been managed effectively. Ideally, the provincial government should have a more optimal role in resolving constraints in terms of infrastructure and accessibility, incentive guarantees, land issues, and synergy management with its resources and capabilities. The Ministry of Home Affairs, as a member of the National Council, should also be able to have a more optimal role. Internally, under the coordination of the Directorate General of Territorial Administration Supervision, an SEZ Working Group can be formed to facilitate the regional and central interests in terms of financing and incentives, strengthening the human resources of the administration and institutions, as well as the SEZ organizations, as well as supervision and control.
Next, review PP No. 18 of 2016 concerning Regional Organizations, especially to support a professional SEZ institution. It means that there must be a mutual agreement to regulate the position of SEZ administrators to ensure that the administrator would be able to be more focused and professional. Finally, tourism SEZs need to maintain their local identity. The local identity is a unique characteristic of the SEZ that must be maintained. Do not set aside and forget the SEZ local characteristic and local wisdom of the area when the competition becomes fierce. The regional governments need to be at the forefront to bring local wisdom into the global arena.