Omnibus Law Job Creation, Solution to Face the Recession in the Impact of Covid-19
By: Edi Jatmiko )*
The Covid-19 pandemic seems to have had an impact on the ongoing financial turnover in various industries. Not a few entrepreneurs have pushed for the Job Creation Bill to be discussed immediately. The Job Creation Bill is seen as a concrete solution when a pandemic and economic recession is in sight.
The Omnibus Law Ciptaker Bill is a breakthrough by the Government to accelerate licensing and improve worker welfare. Shinta Kamdani as Deputy Chairperson of the Chamber of Commerce and Industry (KADIN) said, the Job Creation Bill must be passed immediately if it wants to bring in a lot of investment and create jobs in Indonesia.
Shinta also said that the omnibus law is really needed as soon as possible if we want investment to continue to enter and create more jobs in Indonesia in the near future.
He added that the difficulty in managing licensing and overlapping regulations and bureaucracy are obstacles that can be overcome by the Job Creation Law. Meanwhile, at the same time, Indonesia generally needs jobs to cope with the increasing number of unemployed due to the pandemic.
He also added that almost all of the existing investment constraints can be minimized or resolved through the omnibus law.
Judging by the current economic conditions, the Covid-19 pandemic is still hitting, he said, many domestic entrepreneurs are having difficulty finding funds to continue to exist and be productive.
We need to know that a number of countries in the world have entered the brink of recession due to the Covid-19 pandemic. After previously Singapore, now it is South Korea’s turn to experience negative economic growth for two consecutive quarters.
South Korea has entered the brink of recession for the first time in 17 years. It was recorded that South Korea’s gross domestic product (GDP) was at a minimum of 1.3 percent in the first quarter of 2020, then fell again by 3.3 percent in the second quarter.
Similar to the ginseng country, Singapore’s economic growth contracted by 0.7 percent in the first quarter of 2020. Then, the economic growth of the lion country fell by 41.2 percent in the second quarter of 2020.
Economist at the University of Indonesia Fithra Faisal Hastiadi said Singapore and South Korea have almost the same economic growth characteristics, which are supported by international trade.
As a consequence, when global trade weakened due to the Covid-19 pandemic, both economic growth was sluggish.
Faisal said the contribution of Singapore and South Korea’s international trade was high and South Korea had always relied on global production networks so that when world trade weakened, it had an impact on the two countries.
This condition is different from the supporting variable of Indonesia’s GDP, which is mostly supported by household consumption. As an illustration, household consumption contributed 58.14 percent to GDP in the 2020 quarter.
This fact seems to be of benefit to Indonesia amidst global trade shocks due to the corona virus. The Indonesian economy is predicted to be better off than other countries that depend on international trade.
Therefore, he said that the main key so that Indonesia does not enter the abyss of recession is to encourage domestic consumption. Especially in the third quarter of 2020, because economic growth in the second quarter of 2020 is predicted to experience minus.
Of course, one of the concrete solutions to the threat of a recession is to pass the Job Creation Bill so that it is a solution for investors to invest amid fears of an economic slowdown due to Covid-19.
Moody’s investor service states that the risk of a global recession is increasing, along with the spread of the corona virus outbreak. Moody’s assesses, the longer this outbreak lasts, the more it will affect economic activity and lead to a recession.
Moody’s Investor Service predicts that Indonesia’s economic growth this year will decline from 4.9% to 4.8%. Moody’s projection is based on the presence of the Covid-19 pandemic which has caused a slowdown in economic activity globally.
Meanwhile, for the G20 economies, their respective economic growth forecast is only 2.1%, down 0.3% from the previous estimate. The main decline in consumption and production will be felt by China, where the virus outbreak began.
Chairman of the Chamber of Commerce and Industry (KADIN) Rosan P. Roeslani said that the ratification of the Omnibus Law Bill could be a solution for investors to invest amid the threat of an economic slowdown due to the pandemic.
We certainly have to be optimistic that Indonesia can survive the threat of a recession, however, one of the efforts to save the nation’s economy is by making regulations that facilitate the entry of investment, namely the ratification of the Omnibus Law on Job Creation.
)* The author is active in the Cikini Press and Student Circle