By: Muhammad Yasin)*
The government through the relevant ministries continues to carry out internal consolidation to accelerate the revision of the Job Creation Law (UU Ciptaker). These efforts need broad public support so that investors will immediately receive official legal certainty in order to accelerate the national economic recovery during the Covid-19 pandemic.
The Constitutional Court (MK) has decided that the Copyright Act is conditionally unconstitutional, this makes the government have a maximum time limit of two years from the date the decision was read on November 25, 2021. If within that time the government and the DPR do not make improvements, the Job Creation Law will be declared unconstitutional permanently.
On that basis, Research Director of the Center of Reform on Economics (Core), Piter Abdullah said, if the Job Creation Act was canceled, of course this would have an impact on investors and hampered investment in Indonesia. This will also create uncertainty and damage the investment climate. The drastic decline in investment will of course disrupt economic growth.
The Constitutional Court’s decision did not actually annul the Job Creation Act, but was conditionally unconstitutional. So that the government has the opportunity to improve the job creation law. The revision of the Job Creation Law is related to the substance of the sweeping universe policy. Piter considered that in addition to substance, the drafting procedure also needed improvement in relation to public involvement to improve the Job Creation Law. The reason is that when it was passed into law, many parties felt that the job creation law did not involve public participation.
Improvements in all aspects are indeed needed in the revision of the Job Creation Law. However, Piter thinks that it does not mean that the discussion or preparation is carried out from the beginning. Apart from the pros and cons, he added, the Job Creation Law is highly expected to improve the investment climate, so that it can increase investment which in turn can encourage economic growth.
Therefore, in order to increase the effectiveness of the Job Creation Law, the government should improve the Job Creation Law as a whole and involve as many components of society as possible in the improvement process.
Until now, the government has issued 45 Government Regulations (PP) which technically regulate the ease of business licensing, empowerment of cooperatives and MSMEs, taxation, Bumdes, implementation of housing and residential areas and flats, etc. All of these regulations are in the interest of the business world and remain in effect so that the business and investment climate will remain conducive.
The Job Creation Act is a regulation that the government has been waiting for. This is because the revision of the Job Creation Law is expected to accelerate the recovery of the national economy, which is currently facing many challenges from global developments. Through the Job Creation Law, the government also continues to encourage increased investment and economic growth through regulatory reforms in the field of business licensing. These reforms are aimed at solving investment barriers, namely long bureaucratic chains, overlapping regulations and convoluted regulations.
One of the positive sides of the Job Creation Law is that it’s easy to build a company, if in the past to build a company you needed a minimum of IDR 50 million, then with the Job Creation Act, this regulation is abolished. This application is of course a concrete effort by the government to accelerate economic recovery in Indonesia.
Meanwhile, in its survey, BPS said, by 2030, there will be at least an additional 52 million people of productive age who need jobs. Ironically, Indonesia is currently still faced with regulatory problems that hinder the provision of large numbers of job opportunities.
Therefore, the government through the Job Creation Law, as early as possible seeks to simplify regulations related to business licensing in Indonesia. This is very positive for creating a conducive investment climate, so as to be able to attract more investors both from within and outside the country. The goal is that the economy recovers and the demographic bonus does not cause problems.
Previously, an economist from Wijaya Kusuma University Surabaya, Professor Ruswiyati Suryasaputra, stated that the Job Creation Law would invite foreign investors to come to Indonesia to invest in the digital system. For example, the electric car company Tesla and the online store Amazon.
Even though the Job Creation Law has been revised, it does not mean that investment will stop. However, revisions to the Job Creation Law also need to be carried out so that in the future the Law on Sweeping the Universe can become a law that is friendly to all parties.
)* The author is a contributor to Pertiwi Institute