Public policy is about legitimacy, not about right or wrong. However, in democracy, legitimacy is built from a consensus of various interests that can negate each other.
By
A PRASETYANTOKO
·6 minutes read
Kompas/Priyombodo
A Prasetyantoko
Public policy is about legitimacy, not about right or wrong. However, in democracy, legitimacy is built from a consensus of various interests that can negate each other. That is the main dilemma of policy-making in the democratic era. The speed with which the bureaucracy should respond to the changing situation is crucial in order to get out of this complex dilemma.
Such is the situation that has led to the intense controversy over the omnibus bill on job creation (job creation bill), which was passed by the House of Representatives (DPR) on 5 Oct. 2020. Two things are the focus of the public debate: the drafting process of the bill and its substance. From the process side, the criticism has been focused on the dynamic of its deliberation that is considered closed (secretive) and too quick for such a broad and complex regulatory framework. In terms of substance, there are a number of issues being debated, such as those related to reduced protection of workers and the environment and the return of public policy authority to the central government (recentralization).
Apart from these two things, the criticism is also related to its urgency. If the goal is to increase investment, the problem of corruption is more crucial to be resolved than to discuss the job creation bill. In addition, Indonesia has, so far, remained one of the main recipients of foreign investment. We are not short on investment, and why should we make extra efforts to increase it?
As explained in Articles 1 and 3, the aim of the job creation bill is to create jobs (first of all) through empowering cooperatives and micro, small and medium enterprises (MSMEs). Of course, many articles are also related to strategic investments that are of great value and involve large (foreign) investors as well. Even so, the assumption that the job creation bill is only oriented toward bringing in large-scale (foreign) investment is not completely valid. If it is read in more detail, it seems that this bill intends to promote transformation through an improvement of productivity and competitiveness of the domestic economy.
Perhaps the next debate is why it is necessary to change so many regulations, which results in the creation of articles that tend to harm a number of parties. This is another dilemma that calls for a proper response.
Relaxation and transformation
The spirit of the job creation bill is actually about a comprehensive and fast relaxing of rules in various fields. The common belief is that the fastest way to improve productivity and competitiveness is through deregulation or liberalization. Deregulation is believed to help attract more investment, creating more job opportunities. Supporters of the job creation bill believe that, if the protection of workers is reduced, the protection of workplaces will increase.
From the workers\' point of view, this argument is somewhat strange, because they have to bear its negative effects. It is understandable that the workers are not willing to decrease their quality of life, even for the sake of wider employment opportunities (for others) in the future. It is necessary to find a compromise in this dilemma. However, many other dilemmas can also appear in other aspects of this broad rule.
Kompas
Indonesia\'s Economic Growth per Quarter 2001-2020 (in percent)
How do we get out of these dilemmas? First, a comprehensive assessment is needed that involves the participation of numerous parties in order to formulate more optimal derivative rules. Second, it is necessary to accelerate the work of the bureaucracy, so that it will be more responsive, both in accommodating input and designing further policies.
Even if the job creation bill has been passed without rejection and there is a judicial review through the Constitutional Court, the problems cannot be immediately resolved. In fact, the real problems have just begun to appear, because the key is in the implementation phase. Various relaxation efforts are only relevant if the road map for the transformation is described well and the stages of the implementation are executed well. The implementation of this phase relies heavily on the competence and speed of the bureaucracy.
The issue of one-stop investment permits through electronic integrated licensing (online single submission / OSS) is one example. Even though it has been stipulated in Government Regulation Number 24 of 2018, there are still many obstacles in its implementation, which is why the results are not optimal.
Such a mechanism, which is expected to increase investment interest in Indonesia, does not automatically generate good results. Investment is not only influenced by the ease of administration, but also other fundamental factors. However, this reality should be used as a lesson, so that the omnibus law does not have the same fate, where the relaxation is not followed by transformation.
Apart from the fact that a consensus has not been achieved in many articles of the bill, there are many more articles that are valid and need to be followed up immediately. For example, the relaxation of the primary cooperative establishment, which only requires nine people as compared to 20 people previously. Also, there is the relaxation of permit requirements for the establishment of limited liability companies (PT) and micro and small enterprises (MSEs), which practically do not require any permits, just notification.
SUMBER: BANK DUNIA
Projected economic growth in Indonesia. Source: World Bank
The job creation bill contains quite detailed regulations for strengthening MSMEs, from data pooling and fiscal incentives to mandatory assistance from the government and the business world.
The articles on increasing the capacity and empowerment of MSMEs are one of the main parts of the job creation bill in the context of economic transformation. So, even if many articles are considered controversial, it seems that there is no need to cancel all legal constructs.
Although legal options are still widely open, a consensus is needed, so that economic transformation through increased productivity and competitiveness can be accelerated.
On the other hand, consistency is needed, so that the job creation bill will not be biased and only favor big investors. Concrete steps are needed in the transformation of the domestic economy through empowering MSMEs. The relaxation should be followed up with purposeful transformation efforts. Otherwise, the liberalization will only benefit the big actors. If that happens, the main objections raised by a number of parties so far are valid.
The bureaucracy plays an important role in ensuring that a consensus can be reached immediately, so that economic transformation as the main objective of the job creation bill can be implemented. Do not let the performance of the bureaucracy undermine the legitimacy of the regulatory framework, which is normatively hard to defend.
A Prasetyantoko,Rector of Atma Jaya Catholic University (Unika Atma Jaya).
