By: Rahmat Soleh) *
The government is trying to cut regulations that have hindered investment by proposing the Omnibus Law for Employment Copyright. Simplification of the regulation is believed to be able to open investment faucets, so as to absorb local labor.
According to BPS data as of August 2019. There are a total of 7.05 million people in Indonesia who do not have jobs. BPS head Suhariyant said, the majority of unemployed were graduates of Vocational High Schools (SMK).
In the past 10 years, the actual unemployment percentage has shown a declining trend. The increase in the number of the workforce coupled with an increase in the number of employed people has been able to reduce unemployment to near the 5 percent level in February 2019.
This certainly needs special attention, because if not, it could potentially become a social bomb because unemployed people of productive age can become obstacles to the utilization of demographic bonuses.
It has also been realized by President Joko Widodo, that the creation of large jobs is very much needed to overcome the problem of demographic bonuses.
President Jokowi also aspires after a century of Indonesia standing, Indonesia will come out of the middle class income trap. Indonesia is considered to be a developed country.
In his inauguration speech at the DPR / MPR building, the former Surakarta Mayor said, the demographic bonus is a challenge as well as a great opportunity. How do we deal with big problems if we are not able to provide employment.
In the second period of his leadership, Jokowi will prepare two major laws to be put in order. The two laws relate to job creation and the development of micro small and medium enterprises (MSMEs).
Both will become omnibus law. Ie, one law that revised many laws which he considered inappropriate. He said there were dozens of laws that could hamper job creation. This is also the case with laws that hamper the development of MSMEs that reach tens of them.
Omnibus Law can be called as one of the solutions that would be offered by Indonesian President Joko Widodo, moreover the public already knows that Indonesia did not get any contribution from the trade war that occurred between the United States and China.
Certainly not dismiss if various regulations related to employment are often used as an excuse for business actors and regulators of investment stagnation in Indonesia.
Omnibus Law Cipta Karya Jobs will revise 79 Laws with 1,244 articles in it. There are 11 clusters that are expected to reform regulations so that the arrangement is carried out at the same time against the many regulations.
The 11 clusters contain simplification of licensing, investment requirements, employment, ease of empowerment and community protection, business ease, research and innovation support, government administration, imposition of sanctions, land acquisition, investment and government projects and government and economic areas.
Secretary of the Coordinating Ministry for Economic Affairs Susiwijono said, The Omnibus Law Copyright Discussion Employment must be comprehensive, and here discuss the interests of employers, workers even for people who cannot yet work.
Susiwijono explained, investment needs to be increased in line with the increase in Indonesia’s competitiveness in the eyes of the International. You do this by simplifying the licensing process which is complicated and must be made based on risk. Then, there must be certainty / standard in the process and licensing fees.
The government also set a priority list for the business sectors that are encouraged for investment. Priority list criteria, namely high-tech / high technology, large investments, digital based and labor intensive. Even for digital-based business activities (start-up) capital restrictions are not imposed at Rp 10 billion.
In this way the government hopes to open up employment opportunities. Because the number of unemployed is currently as many as 7.5 million people plus a workforce of around 2 million people. In addition, the government wants a better business climate, so that investor interest in investing in Indonesia can increase.
To realize the expansion of employment, the government certainly needs to spur economic growth, because one percent of economic growth will absorb around 300 to 350 thousand workers. Meanwhile, Indonesia’s average economic growth of 5 percent in the last 5 years.
The target, economic growth in Indonesia can reach 6 percent per year to be able to accommodate 2 million new workers. This certainly requires a new investment of IDR 4,800 trillion, because one percent of economic growth is estimated to require IDR 800 trillion.
Omnibus Law, is one of the government’s strategies to bring in investors by simplifying regulations / laws. So that the application of the omnibus law will be able to absorb the workforce of productive age in Indonesia.
) * Author of the contributors to the Jakarta Press and Student Association (IPMJ)