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The Job Creation Law carries the mission of becoming Indonesia’s investment magnet

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By : Kyara Savitri )*

The existence of the Job Creation Law is considered quite strategic in advancing the Indonesian economy. The Job Creation Law will be one of the regulations aimed at maintaining economic stability and increasing industrial acceleration in various fields. The implementation of the Job Creation Law will also encourage increased competitiveness of Indonesian products in the eyes of the world, which will have an impact on the potential for increased domestic investment.

Vice President Ma’ruf Amin asked ministries and institutions together with regional governments to continue to be committed to unraveling the complications or complications of investment in Indonesia, in order to create a sense of security and certainty for potential investors in investing. Apart from that, continue to carry out bureaucratic reform, transform governance and implement clear, precise and simple regulations.

He also reminded that eradicating corruption must continue to be an effort for the entire nation, because the issue of corruption is seen by investors as an illustration of investing. Issues and challenges in the digital economy sector must also not be ignored so that the potential of the digital economy brings the greatest prosperity to the Indonesian people.

The Vice President reminded again that global dynamics still present a number of challenges for the Indonesian economy. Several things that need attention include the still high level of inflation, interest rates, war and geo-economic fragmentation which require anticipatory strategies in the future.

The Indonesian economy must always be maintained and continue to grow well, one of which is by supporting it with investment. Investment is vital for us to support sustainable development, provide added value to the natural resources that this country has, increase the nation’s competitiveness and create economic and social justice for all Indonesian people.

Indonesia is currently recognized as a country that has an investment magnet. By carrying the status of the largest economy in Asia which has a large number of young workers. High levels of domestic consumption and abundant human resources make Indonesia a promising destination.

But of course this positive assessment is not without correction. Efforts must be made to continuously improve the investment climate so that investment and economic growth do not stop. 

The Ministry of Investment/Investment Coordinating Board (BKPM) revealed a number of reasons why Indonesia is a favorite investment destination country. Director of Regional and Multilateral Cooperation at the Ministry of Investment, Fajar Usman, said that the Ministry of Investment is optimistic that Indonesia’s investment performance will also be relatively good compared to other countries. 

Indonesia is considered to have advantages, one of which is that it is a  global foreign direct investment (FDI) destination country, and is included in the top 20 countries. Apart from that, Indonesia is also listed as a country with a good investment framework. Based on data from the United Nations Conference on Trade and Development (Unctad), Indonesia’s investment facility framework score reached 18.

According to Fajar, Indonesia’s economy has prospects because of its large population and is supported by a qualified workforce. He added that Indonesia is also one of the G20 member countries that has stable economic growth. When Indonesia held the Chair of the G20 Presidency last year, not a few countries expressed their appreciation for the success of the event.

Fajar said that Indonesia is also often a destination country for investment because it has abundant resources, especially for the manufacturing industry. Apart from that, Indonesia has also committed to fighting the climate crisis and implementing ESG principles.

On top of that, the government has also improved the investment climate by rolling out a number of policies and incentives. According to him, the Job Creation Law includes providing convenience (investment) and providing greater investment opportunities.

The government also offers a number of incentives for investors who are interested in investing their capital in Indonesia. Among the stimuli are tax holidays, tax allowances, import facilities and super tax deduction

On this occasion, the Ministry of Investment stated its commitment to continue to facilitate the investment process so that it becomes more conducive for investors. Implementing the Online Single Submission Risk Based Approach (OSS-RBA) system, for example, helps to classify business permits based on risk. In addition, the system is said to have integrated licensing in 16 Ministries/Institutions.

Fajar added that the government is also trying to be a partner for investors, both through investment promotion, assistance in the licensing process up to the commercial production stage, business matching with micro, small and medium enterprises (MSMEs), to end-to-end services  .

The government created the Job Creation Law to overhaul labor and investment regulations in Indonesia with the aim of increasing economic competitiveness, creating jobs and facilitating foreign investment.

This law aims to eliminate bureaucratic obstacles, improve the investment climate, and increase efficiency in business licensing, so that it is hoped that it can support economic growth and community welfare. The Job Creation Law also aims to strengthen cooperation between the government and the private sector in an effort to stimulate the country’s economy.

The existence of the Job Creation Law which has been passed by the Government together with the DPR is believed to have been a breath of fresh air for the investment climate and national economy which had slumped due to Covid-19. Therefore, support from all parties is needed so that the implementation of these regulations can run according to mutual expectations.

)* The author is a student at the Faculty of Economics

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