By: Gita Oktaviani )*
Indonesia’s competitiveness ranking continues to soar thanks to the existence of the Job Creation Law (UU Ciptaker). This is the sweet fruit of the government’s efforts so far to increase the ease of doing business and also create a conducive investment climate.One of the most effective efforts by the Government of the Republic of Indonesia (RI) to continue to improve the country’s competitiveness ranking is the ratification of the Job Creation Law (UU Ciptaker). Thanks to the Job Creation Law, it has become easier for entrepreneurs when they want to open a new business compared to before, especially before the ratification of this set of regulations. In addition, the investment climate is now becoming more conducive, thereby increasing Indonesia’s competitiveness ranking.The Coordinating Minister (Menko) for Economic Affairs, Airlangga Hartarto, revealed that the increase in Indonesia’s competitiveness ranking was based on the Institute for Management Development (IMD) World Competitiveness Ranking (WCR) 2024 research which recorded that this nation was in 27th position out of 67 countries.With this ranking, it means that Indonesia’s position has increased by seven places from 2023, when it was ranked 34th. When this country experiences an increase in its competitiveness ranking, it is clear that this has a significant effect, especially on how attractive it is to investors.This is not without reason, because a high competitiveness ranking will also be able to improve the reputation and positive image of this nation, especially in the eyes of global investors who often consider this ranking in their decision to invest capital or not. Now, Indonesia’s competitiveness ranking has indeed increased, so in other words, the country now has good economic stability, and also has the potential for promising growth.
The government continues to strive for all of these things so that the creation of a much better investment climate can be realized in real terms. To increase the ease of doing business, the government has made all kinds of improvements to regulations in Indonesia.One concrete form of improving regulations by the government, which is related to efforts to create a conducive investment climate, is the Job Creation Law (UU Ciptaker) along with its derivative regulations, namely Government Regulation (PP) Number 5 of 2021 concerning the Implementation of Business-Based Licensing. Risk.Meanwhile, Secretary of the Task Force (Task Force) for the Acceleration of Socialization of the Job Creation Law, Arif Budimanta, stated that this policy, including all the regulations that form its legal umbrella, can facilitate business permits so that it becomes an instrument in spurring national economic growth in 2024.One of the government’s efforts to spur economic growth is by accelerating the implementation of the Job Creation Law with all its derivative regulations. Not half-hearted, even the government, through the Task Force for the Acceleration of Socialization of the Job Creation Law, also regularly holds discussions and integration of a good basic licensing system in various regions.Since the existence of the Job Creation Law, there have been efforts to structurally reform Indonesia’s economic conditions because this legislative product provides convenience, empowerment and protection to the business world. With the push for structural reform taking place, the government has a target for economic growth in 2024 to reach 5 percent. Because in the Job Creation Law, all permits are risk-based, this is a new, more systematic breakthrough.On the other hand, Professor of Business Law at Gadjah Mada University (UGM), Prof. Nindyo Pramono believes that the Job Creation Law has had a significant positive impact on increasing investment, including foreign investment (PMA) in Indonesia.Investors responded very positively to the structural reform efforts that the government implemented through the Ciptaker Law. The evidence, as per analysis from the World Bank, is that a very positive impact occurred in increasing FDI, with total realization increasing by an average of 29.4 percent in the 5 quarters after the policy took effect.The structural reforms taking place in Indonesia through the Job Creation Law have also been proven to be significantly successful in reducing trade and investment barriers in the country. Implementation of this series of policies and all their derivatives was able to reduce barriers to direct foreign investment by around 10 percent.It doesn’t stop there, but other positive impacts from the implementation of the Job Creation Law can also be felt by Micro, Small and Medium Enterprises (MSMEs), namely related to the economic foundations in Indonesia. It is proven that the Job Creation Law has succeeded in reforming the licensing process and making it easier to do business, thereby overcoming existing bureaucratic obstacles.Starting from the ease of opening or setting up a business, then the investment climate becoming much more conducive, all of which can have an impact on increasing Indonesia’s competitiveness ranking, all of which stems from the ratification of the Job Creation Law.)* The author is a Contributor to the Reading Window Institute