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UGM Academics Say Job Creation Perppu Can Save Indonesia from Crisis


Gadjah Mada University business law expert, Nindyo Pramono, said that the president has full authority to enact the Job Creation Law in conjunction with Perppu Number 2 of 2022 for reasons of urgency.

According to him, this is an effort to prevent Indonesia from falling into a prolonged crisis.

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“Regarding the urgency of forcing, of course it is discretion (full authority) which is within the scope of the President’s authority. The issuance of the Perppu was decided by the President, so that Indonesia would not enter into a crisis situation,” explained Nindyo

Nindyo believes that the presence of Perppu Number 2 of 2022 concerning Job Creation is very important and beneficial for the continuity of the interests of the investment climate for Indonesia, which has so far lagged behind other ASEAN countries such as Singapore, Thailand, Vietnam and Malaysia.

According to Nindyo, this is due to the complicated licensing procedures in Indonesia which have become a problem that does not attract investment interest in the country.

“Objectively, bureaucratic licensing is one of the obstacles to increasing investment through ease of doing business,” said Nindyo.
Investors today often demand several facilities before investing in a country. Nindyo detailed that these facilities include consistent laws and regulations that guarantee long-term legal certainty, such as the Job Creation Perppu. Second, ease of licensing procedures is ensured so that the economic costs are lower and investors are interested in investing.

“Third, guarantees for investment and legal protection for intellectual property rights (IPR) and finally supporting facilities and infrastructure, including communication, transportation, banking and insurance,” said Nindyo

Nindyo also agreed that the president’s action in issuing Work Creation Perppu Number 2 of 2022 was the right step. He considered that the urgency of enacting the Perppu did not have to wait for a crisis first.

“Not to mention if the chaotic situation like 1997-1998 is repeated. Because I am sure that if we think wisely and wisely, of course none of the nation’s children would want the events of 1997-1998 to happen again,” said Nindyo.

Nindyo also alluded to the fact that several Perppu previously issued did not explain the crisis of coercion at all.

The Perppu in question includes Perppu No. 1 of 1998 concerning Amendments to the Bankruptcy Law. It is known that this Perppu was born when the country was experiencing a crisis in 1997 and 1998. Which, the context of ‘forced crises’ at that time had an urgency of economic considerations. It is known that at that time the country was never in an emergency status even though the government spent a bailout fund worth IDR 600 trillion.

The second Perppu that does not contain a compelling crisis is Perppu No. 1 of 2000 concerning Free Trade Areas. The third Perppu namely Perppu No. 1 of 2004 concerning Amendments to Law No. 41 of 1999.

“There is not a single sentence which states that there is a pressing crisis forcing this Perppu to be issued,” he said.

The fourth Perppu, namely Perppu No. 1 of 2014, which annulled Law No. 22 of 2014 concerning Pilkada, which did not at all explain the existence of a compelling crisis.

The reason used at that time, added Nindyo, was Law no. 22/2014 concerning the Election of Governors, Regents and Mayors which regulates the election mechanism indirectly through the DPRD has received widespread rejection from the people.

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