East Java is the second largestcontributor to Indonesia's economy with a growth ratesimilar to national level and other major provinces in Java.Nevertheless, for a province that is expected to be a majoreconomic center in the country, there has been very littlechange in the region's economic structure in the past10 years. Since 1995, the share of industry and agriculturein the economy is almost unchanged. Furthermore, the growthin both of these two sectors has been low, despite the factthat industry was once the main driver of the East Javaeconomy. This report analyzing the economic conditions ofEast Java shows that the province offer many economicadvantages for investors, such as its geographical location,adequate credit facilities, an abundant and competitivelypriced workforce, conducive security conditions, and anoverall robust macroeconomic condition. The report alsofinds a number of constraints that, if prioritized andeffectively addressed, could boost East java's growthrate to higher level. The main binding constraints to growthin East Java are infrastructure, particularly related tobusiness operations, and the business climate.