Hyper-regulation is one of the reasons for Indonesia’s economic stagnation, so a breakthrough is needed through the Omnibus Law Ciptaker Bill. With this regulation simplification, investment in Indonesia will be easy and will automatically increase economic growth. Many people also consider that the Omnibus Ciptaker Bill is a solution to the economic recovery after Covid-19.
On Monday (27/4), the Legislative Body of the Republic of Indonesia House of Representatives held an initial Public Hearing Meeting (RDPU) in a series of discussions on the Draft Employment Bill (Ciptaker Bill). In the meeting held online, Jakarta Indigenous Entrepreneurs Association (HPPI) Board Chairperson Sarman Simanjorang expressed his hope that with the existence of the Omnimbus Law, regulations would be organized and simple. Thus, economic development and investment can develop rapidly, especially after the co-19 crisis which weakened the world economy.
Sarman also proposed a change of name in this bill. The naming of Cipta Karya made this bill as if it only contained policies focused on labor. This is something that seems to only talk about the fate of workers. That is what causes conflict.
In fact, in the draft Ciptaker Bill there are 11 clusters and one overall cluster that discusses employment. The cluster was finally postponed because it was quite complicated due to opposition from the workers. On that occasion, Sarman proposed that the name of the Ciptaker Bill be changed to the Business and Investment Ease Bill.
Another guest speaker at the meeting, Prasetya Mulya University Chancellor Djisman Simanjuntak also said that the Ciptaker Bill was needed. Because, in the future Indonesia is in dire need of employment growth, especially after this co-19 crisis. For that, a large investment is needed. At the same time Indonesia’s international trade must be superior.
One member of the Legislative Body, Taufik Basari said the DPR understood that the Ciptaker Bill received a lot of public attention. This bill is often considered only in favor of the authorities and investors. Input from experts is openly expected to make the public understand the importance of this Ciptaker Bill.
In addition, an Economist at the University of Indonesia (UI), Fithra Faisal considered that the Omnimbus Law Draft Work Copyright Act (Ciptaker Bill) was part of the institutional approach that was needed by Indonesia after the 19th co-epidemic. Because it is predicted that shock will emerge after the Covid-19 pandemic due to rising unemployment.
The government has predicted that the number of unemployed people due to the Covid-19 Pandemic in a severe scenario could increase to more than 5.23 million people. The Wave of Employment Termination (PHK) has the potential to reduce national economic growth, which dropped from 5.3% to 2.3% in a severe impact scenario. It can even reach minus 0.4% for very heavy scenarios. This problem cannot be dealt with only by fiscal and monetary approaches but also institutional.
An institutional approach was needed from the start because the Indonesian economy experienced a de-industrialization trend. Before the covid-19 outbreak, Indonesia had experienced problems on the productivity side of the industry. One of the things that affects is the productivity of its workers. The outbreak of the co-19 pandemic made this even worse.
Improvements to this regulation are needed so that Indonesia can take advantage of demographic bonuses and escape the entanglement of middle-income countries. The post-epidemic momentum of Covid-19 should also be used because many major producing countries, are likely to relocate industry from China. One of the regions with the most potential in utilizing this is Southeast Asia.
Fithra reminded that this Omnimbus Law required huge political costs. The results may not be felt instantly and will face many large demands from the public. However, if you look at Germany that has done labor regulations. Germany is patient enough and institutional deregulation can bring glory in the future.
Reflecting on this reality, the Omnibus Law Ciptaker Bill is believed to be one of the main solutions for the post-19th Coand 19 economic recovery and to develop Indonesia’s economy going forward. For this reason, cooperation between the workers and the government is needed so that there are no more conflicts which will hamper the process of the bill.
Zakaria
