Supporting the Strengthening of MSMEs and Downstreaming of Industry Through the Job Creation Law
By: Dhita Karuniawati )*
The Job Creation Law (UU), better known as the Job Creation Omnibus Law, has been officially approved as Law (UU) by the Indonesian House of Representatives (DPR), at the Republic of Indonesia DPR Building, Jakarta on October 5 2020, then ratified and promulgated on November 2 2020 became Law Number 11 of 2020 concerning Job Creation. The presence of the Job Creation Law supports development and progress in various sectors. This is one of the government’s efforts to support the strengthening of MSMEs and downstream industry.
Head of the NTB Province Manpower and Transmigration Department, I Gede Putu Aryadi, S.Sos, MH said that the Job Creation Law is an essential policy instrument even though it is controversial. The main aim of this law is to increase investment attractiveness, revive MSMEs and create wider employment opportunities, while encouraging increased welfare and protection for workers/workers. Much of the workforce in NTB is absorbed in the informal sector, where the formal sector only includes around 500-600 medium to large companies and the rest are MSMEs.
Aryadi said that the impact of the Job Creation Law in NTB cannot yet be evaluated thoroughly. Moreover, not all of the implementing regulations for this Law have been published. The process of drafting implementing regulations needs to be supervised together. However, the facts in NTB show that industrialization is increasing and this is creating job opportunities for our people.
Based on BPS data, the number of labor force in February 2024 was 3.03 million people, an increase of 163.34 thousand people compared to February 2023. In line with the increase in the number of labor force, the Labor Force Participation Rate (TPAK) also increased by 2.80 percent points. The 2024 Open Unemployment Rate (TPT) is 3.30 percent, down 0.42 percentage points compared to February 2023. That means there is an increase in labor absorption.
Aryadi invites all parties, such as the government, companies, trade unions, academics and society, to work together to create a better and fairer work environment. Apart from that, protection for Indonesian migrant workers (PMI) is also a main focus, considering that NTB is the fourth largest province sending PMI abroad.
Aryadi also invited all parties to ensure that incoming investment truly provides benefits to local communities and protection for all workers, both formal and informal. By involving various stakeholders, it is hoped that NTB can become an example of a region that has successfully integrated labor protection with economic growth through investment.
The benefits of the Job Creation Law continue to reach various regions directly and indirectly. Plt. Head of the Regional Office of the National Land Agency (BPN) of East Java Province, Mujahidin Maruf, said that in Law Number 6 of 2023 concerning the Stipulation of Government Regulations in Lieu of Law No. 2 of 2022 concerning Job Creation into Law, it is one of the government regulations in an effort to supporting ease of doing business for the community and business actors in order to facilitate investment, especially in East Java Province.
The East Java Provincial BPN Regional Office makes it easier for micro, small and medium businesses to obtain business capital through the Suitability of Space Utilization Activities (KKPR) in the local province. Mujahidin Maruf explained that the KKPR is closely related to the business location and is an important element in the process of issuing Business Identification Numbers (NIB) for MSME players. In order to improve the investment ecosystem and business activities in East Java Province, the government has regulated the simplification of the basic requirements for business licensing in the form of Suitability for Space Utilization Activities (KKPR).
Mujahidin reminded that the implementation of the KKPR publication also requires coordination between ministries or institutions so that the KKPR publication is in accordance with what is expected. We all have an important role in KKPR services in East Java Province.
Meanwhile, Assistant III to the Sorong City Regional Secretary Hanock J. Talla said there were things that needed attention that would certainly have a positive impact on the community. One of them is related to the enactment of Law Number 11 of 2020 concerning Job Creation. This implementation is an effort to create business through convenience and empowerment for MSMEs, cooperatives and business actors.
Following up on this, regulations were then issued in the form of Government Regulation Number 5 of 2021 concerning Risk-Based Licensing and Government Regulation Number 6 of 2021 concerning the Implementation of Business Licensing in the Regions. This PP provides an understanding of the authority for business licensing and then regulates its implementation. Apart from that, there are also regulations regarding reporting, funding and also sanctions for implementing Government Regulation Number 6 of 2021.
The Job Creation Law has proven to be a solution to overlapping regulations so that licensing can be carried out quickly, especially in the MSME sector. The Job Creation Law also attracts investors to invest their capital and downstream industry. In order to optimize the benefits of the Job Creation Law, the entire community should support this policy for the progress of the nation, especially in strengthening MSMEs and downstream industry. This also needs to be strengthened through inter-regional policies.
)* The author is a contributor to the Indonesian Institute for Strategic Information Studies
