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Revised Job Creation Law Increases Investment and Jobs

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By: Dian Ahadi )*

The government complied with the decision of the Constitutional Court (MK) to revise Law Number 11 of 2020 concerning Job Creation. It is believed that this regulatory improvement will be able to increase investment in Indonesia.
The Job Creation Law is the most famous law because it regulates many things, from the economy to investment. Since its birth at the end of 2020, this law has had its pros and cons. When there are parties who do not agree with it, the President invites that person or party to submit a claim to the Constitutional Court. Then the Constitutional Court ordered that this law be revised and given a maximum grace period of 2 years.

The revision of the Job Creation Law has not yet been formalized because it is still in the process of being drafted. However, the government guarantees that the revised version will be even better. Member of Commission IX DPR RI Rahmad Handoyo, stated that the re-discussion (revision) of the Job Creation Law is expected to make all parties happy.

Rahmad added that when the Job Creation Law was revised, the results would be satisfactory, both for workers and employers. In a sense, when this law is revised, it is the labor cluster that is most highlighted. It is hoped that after the official revision there will be an improvement in employee salaries and minimum wages.

Member of Commission IX of the DPR RI, Irma Suryani Chaniago, also hopes that there will be a win-win solution in the revision of the Job Creation Law. With the hope that there will be additional employment and investment. In a sense, it is impossible for the revised version of the Act to abolish investment clusters. It is precisely the cluster that is very important because it will increase investment in Indonesia.

With the employment creation law, investment in Indonesia has increased. In 2021, the realization of investment was 900 trillion rupiah and the target for 2022 is 1,200 trillion rupiah. This is very good because the more investment, the more foreign exchange that comes in.

Coordinating Minister for Economic Affairs Airlangga Hartanto stated that the Job Creation Law increased business and investment in Indonesia. The Job Creation Law is indeed a ‘weapon’ to increase the entry of foreign investors into Indonesia. The reason is because the requirements for investing are simplified and the permit processing can be done online, namely through online single submission.

If there is an online arrangement, it is highly preferred by foreign businessmen who want all matters to take place quickly, practically, and without being long-winded. So what if this law is still under revision? The revised version of the Job Creation Law has not yet come out, but the law is still in effect, so entrepreneurs need not be afraid. They are more free to create new businesses in Indonesia.

In addition to investment, the Job Creation Law will also create jobs, which is a positive domino effect from the ease of investment. When investment is rampant, more and more companies are established and automatically need more employees. People can apply for jobs there and become employees, and get a salary every month.

Job opportunities are really needed to reduce the number of unemployed in Indonesia. If there is a lot of unemployment, it is dangerous for the economy because there are fewer people who spend, because they really don’t have money. Whereas the wheels of the economy must roll and the way is to increase spending by the community.

We are currently waiting for the revised version of the Job Creation Act, which is certainly expected to be better than the original version. Later this law will be more perfect and become a win-win solution for entrepreneurs and their workers, especially in the labor cluster. In addition, the investment cluster is also improved in order to really facilitate the entry of foreign investors into Indonesia.

)* The author is a contributor to Pertiwi Institute

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