*) By: Sinta Aprillia
The Labour Creation Act has become a hot topic in a wide range of societies, ranging from workers, entrepreneurs, to economic observers. The bill was designed as one of the government’s efforts to drive more inclusive and sustainable economic growth.
By introducing sectoral reforms, the Labour Creation Act aims to create an ecosystem that is more conducive to the business world, which is ultimately expected to be able to open up more jobs and strengthen Indonesia’s competitiveness in the global arena.
However, the implementation of the Act also triggers challenges that must be addressed wisely in order to ensure that the expected positive impact is truly realized.
One of the most highlighted aspects of the Labour Creation Act is the effort to increase the flexibility of the labour market. Through the reforms presented, the government hopes to create a more conducive environment for the creation of new jobs.
For companies, this means easier recruitment processes and lower costs. Meanwhile, for the workforce, this can open up new opportunities in a range of sectors that were previously difficult to access.
However, these reforms also raise concerns among workers and trade unions. The flexibility offered by the law is considered to reduce the protection of labour rights, in terms of job guarantees and decent wages.
Arif Budimanta, member of the Accelerated Socialization Agreement on the Labour Creation Act, reaffirmed that the Act seeks to find a balance between the interests of workers and employers, whileining fair employment guarantees.
It is important to understand that these changes in the labour market are part of government efforts to respond to global challenges. The increased flexibility aims not only to attract foreign investment, but also to create an ecosystem of labour that is more adaptive to changing technology and industrial needs. The public must continue to be involved in this process so that the proposed reforms do not neglect the welfare of workers.
To keep this policy fair and inclusive, the Labour Creation Act has taken steps to facilitate dialogue between workers and employers. Discussions about wage formulae, for example, have become one of the most discussed topics.
It is an indication that the government is trying to ensure that the policies implemented are not only beneficial to one party, but also take into account the well-being of all parties involved.
Although this dialogue is seen as a positive step, the challenge to ensure that the voices of all groups are heard remains. Many workers’ unions feel that their views are often ignored in the policy making process. It suggests that governments should be more proactive in ensuring wider participation of all stakeholders. Thus, the resulting policies can better reflect mutual interests and reduce potential conflicts in the future.
In addition to employment reform, the Labour Creation Act also introduces significant changes in terms of business licensing. The licensing process, which has long been considered complicated and time-consuming, is now simplified through a risk-based system. This approach allows entrepreneurs, especially UMKM, to obtain business permits more quickly according to their level of risk.
With this system, permits for low-risk can be obtained more easily, while high-riske still require strict supervision. This simplification is expected to reduce the barriers for entrepreneurs and drive faster economic growth. However, there are concerns that the system could be abused by irresponsible parties, requiring strict supervision from the government.
For entrepreneurs, especially in the UMKM sector, this policy is a fresh wind that can accelerate their business growth and expansion. However, it should be remembered that this facility of licensing must be accompanied by a high level of responsibility in conducting business.
Without that, the expected growth potential could be hampered by problems arising from non-compliance with existing regulations.
The Labour Creation Act is aimed not only to improve domestic conditions, but also to improve Indonesia’s competitiveness in the international arena. According to the World Competitiveness Ranking (WCR) issued by the Institute for Management Development (IMD), Indonesia’s competitivency ranking has improved significantly.
President Joko Widodo reiterated that this progress is largely due to the implementation of the Labour Creation Act, which has strengthened the government sector, improved business performance, andined economic stability.
Despite the increase, there’s still a lot of homework to be done. Some sectors such as infrastructure, health, education, as well as science and technology still require special attention so that Indonesia can compete with other developed countries. This increase in competitiveness must be supported by sustained improvement in various sectors, so that the resulting economic growth can be felt by the entire society.
Amidst challenges and criticism, the Labour Creation Act remains an important step in the government’s efforts to drive more inclusive and sustainable economic growth. By involving various stakeholders in the policy-making process, the government demonstrates its commitment to creating a fair and participatory policy.
With strong support from all parties, including the public and regulatory agencies, the Labour Creation Act has great potential to take Indonesia towards a brighter future, where economic growth and social well-being can go hand in hand.* The author is a contributor to the Persada Institute