The Jakarta export processing zone : benefits and costs

In 1972 an export processing zone (EPZ) was set up in Jakarta under the control of a state company. This EPZ was conceived as a 'pilot project' under the Ministry of Trade with a view to assessing whether similar zones should be established elsewhere in Indonesia. Recently, plans were formulated to establish EPZs in at least eight other locations, possibly with World Bank financing. Although the Jakarta EPZ was and still is viewed as a pilot project, it is understood that a detailed assessment of its benefits and costs has not yet been undertaken by the government. This paper presents a framework for such an assessment and also provides a tentative evaluation of the economic benefits and costs experienced to date by the Indonesian population as a result of the existence of the zone. (DÜI-Sen)