All agreed with the spirit of the Job Creation Law to increase Indonesia\'s competitiveness in attracting direct investment and creating jobs. Many parties were waiting for the implementing regulations of the law.
By
KOMPAS EDITOR
·3 minutes read
KOMPAS/TOTOK WIJAYANTO
Labor activists hold banners ahead of a protest on Wednesday (12/2/2020) at the House of Representatives in Senayan, Jakarta. The protesters objected to the omnibus bill on job creation, which they claimed would sacrifice workers’ welfare for the sake of investment. They say that the bill threatens workers’ rights and welfare by excluding detailed provisions on minimum wage and the hourly wage system, eliminating severance pay, reducing work hours and altering the labor system.
Many parties are waiting for the Job Creation Law (UUCK) to be implemented to restore the economy and increase Indonesia\'s competitiveness.
In the Kompas Collaboration Forum (KCF) online discussion on Friday (30/4/2021), which was attended by CEOs and leaders of KCF member companies, Cabinet Secretary Pramono Anung said that the Job Creation Law provided legal certainty for investors.
The Job Creation Law, which was passed on Oct. 5, 2020, covers around 75 legal areas and aims to improve ease of doing business in Indonesia. The law improves and simplifies several provisions, including those on licensing, job creation, micro, small and medium enterprise (MSME) development, bureaucratic reform, central-regional relations, and building an investment framework.
In a Kompas panel discussion on the economy (18/3/2021), Deputy Finance Minister Suahasil Nazara said that the Job Creation Law aimed to be one of three game changers for the Indonesian economy in 2021, in addition to policies on public health (especially vaccines) and the 2021 State Budget. Indonesia must not merely survive the negative impacts of the pandemic, but it must also come out better than it was before the pandemic.
The government has issued a number of implementing regulations on the Job Creation Law. President Joko “Jokowi” Widodo also felt it necessary to form an Investment Ministry, which was established last week.
Indonesia\'s economic growth target in the year of recovery 2021 is 4.5-5.5 percent. This means that the economy must grow more than 7 percent from last year. A number of obstacles must be overcome in its implementation.
The KCF discussion noted that spatial planning permits had become problematic in the relationship between the central and local governments.
The Job Creation Law has also led to the issuance of a government regulation on manpower, intended to accommodate the interests of both employers and employees. Severance pay has been reduced and the government has provided a job loss guarantee. However, the Job Creation Law allows a system of contract work without a time limit, which workers have perceived as detrimental to guaranteeing a future in an asymmetrical labor market.
Imports of food and agricultural products have been made easier. In practice, this led to protests when the government intended to import rice and sugar amid the local rice harvest and while the domestic sugar supply had not been absorbed by the market.
All agreed with the spirit of the Job Creation Law to increase Indonesia\'s competitiveness in attracting direct investment and creating jobs. Many parties were waiting for the implementing regulations of the Job Creation Law, with hopes that they would run better than the 16 reform packages during Jokowi\'s first term.
On understanding the experiences of a number of employers, the labor unrest on International Labor Day 2021, and farmers’ concerns, the substance of the Job Creation Law needs to be communicated to the state bureaucracy at both the central and regional levels, including the legislature, as well as to employers and workers. In accordance with its objectives, the Job Creation Law must bring prosperity and justice for all.
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