In an increasingly competitive era of globalization, Indonesia is working hard to increase its competitiveness in the international arena. One of the significant steps taken to achieve this goal is through the ratification of the Job Creation Law (UU) which was officially passed in 2020, aimed at improving the investment climate and simplifying various administrative processes which are considered obstacles to business development and job creation. With the various reforms presented by the Job Creation Law, it is hoped that Indonesia can be more competitive in the global market and attract more foreign investment.
One of the main objectives of the Job Creation Law is to create more and better quality jobs. By eliminating various bureaucracies that are considered to be obstacles, the Job Creation Law makes it easier for business actors, both large and small, to start and develop their businesses. This is expected to reduce the unemployment rate and improve community welfare. This reform also aims to create a more conducive business environment, which in turn will attract more investors to invest in Indonesia.
Head of the Pancasila Study Center (PSP) at Gadjah Mada University, Agus Wahyudi, stated that the Job Creation Law has values that are in line with Pancasila, namely creating flexible and dynamic employment opportunities by upholding the principles of social justice. In the entrepreneurship sector, the Job Creation Law also provides convenience in business licensing and incentives for MSMEs, making it easier for young people to be more enthusiastic about business.
The Job Creation Law also covers various important aspects in the business world, such as simplifying licensing, reforming labor regulations, and cutting taxes. It is hoped that simplifying business licensing can reduce the time and costs incurred by business actors in the licensing process. With a simpler and more efficient licensing system, business actors can focus more on developing products and services, as well as increasing their competitiveness in the global market.
Reforms in labor regulations are another aspect of the Job Creation Law that has received great attention. This law introduces various changes in provisions regarding employment contracts, wages and workers’ rights. The aim is to create flexibility in industrial relations that will make it easier for companies to adapt their workforce to business needs. This flexibility is expected to increase productivity and efficiency, as well as make it easier for companies to face dynamic global market challenges.
Secretary of the Task Force for the Acceleration of Socialization of the Job Creation Law, Arif Budimanta, said that the initial considerations when proposing the Job Creation Law were in order for Indonesian citizens to have a decent life. So far, the Indonesian economy has been supported by MSMEs, so that all government policies are made by paying attention to the convenience and welfare of micro and small businesses. By reducing the tax burden on business actors, the government hopes to provide incentives that encourage companies to make larger investments. This tax reduction is expected to stimulate economic growth, increase Indonesia’s competitiveness in the global market, and create more jobs. Foreign investors also tend to be more interested in investing in countries with more competitive tax systems.
Director of Investment Deregulation, Dendy Apriandi, said that since the Job Creation Law came into force, the issuance of NIBs via the OSS (Online Single Submission) website has almost reached 10 million NIBs with 98% of those issued being MSME master numbers. With OSS, it can encourage business actors to dare to try and achieve legality. There are several adjustments related to business scale in business criteria. This is done in order to encourage MSMEs to move up in class, as well as in an effort to empower and facilitate.
The implementation of the Job Creation Law is expected to improve Indonesia’s image in the eyes of the international world. With the reforms carried out, Indonesia is expected to be able to demonstrate its commitment to creating a better business climate and competing in the global market. The successful implementation of this law will be an important indicator for the international community about how Indonesia adapts to global demands and takes advantage of existing opportunities.
Overall, the Job Creation Law is a strategic step to increase Indonesia’s competitiveness on the global stage. With the various reforms carried out, it is hoped that the investment climate in Indonesia will become more conducive, create more jobs and improve people’s welfare. Success in implementing this law will be a key factor in realizing Indonesia’s vision as a competitive and attractive country for international investors. With hard work and commitment from all parties, Indonesia can utilize the Job Creation Law as a tool to strengthen its position in the global market and achieve sustainable economic growth.
)* The author is a contributor to the Persada Institute
