By: Agung Setia Budi, S.I.P, M.Sos) *
Many regulatory packages are local and national when implemented have not been effective in responding to the needs and speed of absorption of special investments in the real sector and capital intensive. The ineffectiveness is reflected in the realization of investment and economic growth is still stagnant. Observing this phenomenon, President Jokowi in the beginning of the second era of his government launched and invited the owners of both local and national policy authorities to simplify all forms of regulation.
The evaluation should be carried out because it has proven to be an obstacle to the non-optimal increase in economic growth. Why, BKPM data shows that investment realization continues to slow down and this is very apparent in investment realization data by 2018. Investment in Indonesia only grew 4.1 percent in 2018 compared to 2017. Furthermore, in 2018 it was also noted that PMA growth experienced negative growth of -8.8 percent. This trend continues with the realization of foreign direct investment per semester I / 2019 of Rp212.8 trillion or 44 percent of the target of Rp.483.7 trillion. PMA growth per semester I / 2019 compared to the same period the previous year was only 4 percent.
This condition indicates that there has been no significant change in terms of investment performance. In fact, many regulatory packages produced by the Regional Government and the National Government are aimed at encouraging increased investment, especially those which are always targeted by the Government, namely the labor-intensive sector to unravel the decline in the labor force. High labor-intensive industry growth is directly correlated to the elasticity of employment. Especially if what happens is that there is an increase in investment in the textile, footwear, leather, and electronics industries that can easily be capitalized with two-figure industrial growth, then 1 percent of economic growth can absorb around 450,000 people.
This hope has received serious attention from the Government in synergy with the DPR to issue two major laws, namely the Employment Copyright Act and the UMKM Empowerment Act. That hope, as a form of answer to the harmonization of business actors. During this time, business actors have complained about the consistency of the regulatory package which they consider can facilitate and as a legal umbrella for comfort in doing business, but the meeting point for policy consistency that is likely to be an obstacle is to accelerate the achievement of targets. On the other hand, business operators assess that many regulations are not accompanied by national industrial development plans. Even the negative stigma is the existence of extortion practices by the flood of regulatory packages published by the Regional Government.
In the long run there is no other choice for the government, how to anticipate the global economic cycle is slowing but on the other hand, it can take the opportunity to create an expanded investment climate. Does not depend continuously from the commodity cycle. Transformation in the regulatory sector must be simplified so as to provide certainty for business actors to invest.
High economic growth is usually supported by high investment growth, the target of achieving economic growth of around 6 percent, investment growth must be around 10 percent so that every quarter the growth rate can be stable at 5.49 percent which will correspond to economic growth of around 4.92 percent. These investments can come from foreign and domestic investment (PMDN).
The target can be achieved by underlining the importance of simplifying the structural package of regulations that makes the economy more efficient and productive. The focus of this regulatory reform facilitates the transformation of the manufacturing, labor-intensive and capital industries. This simplification must also touch the micro level economy. Finally, the simplification of this regulation is integrated with the national interests and vision and mission of the government which has tried hard to adjust its national economic policies to market priorities without ignoring the mandate of the constitution, namely the opening and Article 33 of the 1945 Constitution.
) * The author is a Researcher in the Political Economy of Regional Development
