The Job Creation Law Increases Competitiveness and Ease of Investment
By: Alvin Aldisasmita)*
The Job Creation Act is believed to be able to increase competitiveness in terms of ease of investment. Cutting a number of regulations is also expected to become a magnet for quality investment, so that it is hoped that it can encourage national economic recovery during the Covid-19 pandemic.
The Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Nathan Kacaribu, ensured that the enactment of the Job Creation Law will also increase Indonesia’s competitiveness in the international arena. This is because the law is able to realize structural reforms that can significantly affect the quality of human resources.
According to him, the job creation law is very influential on comprehensive structural reforms starting from the lowest education sector in the country. Because, in this law every education budget in the APBN will be directed to improve the quality of education outcomes. The success indicator can be measured when the Program for International Student Assessment (PISA) ranking of Indonesian HR increases significantly.
With the increase in the quality of domestic human resources, of course, foreign and domestic investors will be more interested in investing in Indonesia, considering that this factor is very important for a rapid transformation in the next few months. The Job Creation Act will also open the bottle neck. improvement of the quality of human resources which has been intensively carried out by the government.
The sustainability of structural reforms in the field of human resource development will have a positive impact on accelerating economic recovery. Thus, the domestic investment climate will be very good for investors from outside and within the country.
International institutions also predict that the enactment of the job creation law will sharply boost domestic economic growth in the next few years. Therefore, the government needs to immediately implement these laws in the world of work in Indonesia.
Based on projections from the International Monetary Fund (IMF), economic growth in Indonesia will reach 6.1 percent, Bloomberg predicts it will reach 5.6 percent, the World Bank predicts it will reach 4.4 percent, and the Organization for Economic Co-operation and Development (OECD) predicts it will reach 5.3 percent.
We need to know that the Job Creation Law also aims to encourage the business climate, accelerate economic transformation, harmonize central-regional policies, provide ease of doing business, overcome overlapping regulatory problems, and eliminate sectoral egos.
The President of the Republic of Indonesia, Joko Widodo, said that he would guarantee investment security for foreign investors. They can prove it for themselves, by looking at the achievement of investment in Indonesia, which is 9% per year in 2021. Thus, investors will believe that investment in this country is very profitable.
In addition, the revision of the Job Creation Law also supports the provision of full salaries and bonuses and allowances for local workers. If workers are forced to stay home, according to the Job Creation Law, workers will receive severance pay of 25 times their salary.
Moreover, issues related to severance pay are often discussed, because more than 70% of companies are absent from their obligations. Even though they should have paid the rights of former employees.
Professor of IPB Prof. Dr.Ir. Yanto Santosa, DEA said, when investment increases, employment opportunities will also increase, this is the real purpose of the Job Creation Act, for the welfare of the community.
However, in order to implement the Job Creation Law in accordance with the government’s expectations, including simplifying licensing regulations, encouraging investment ease and increasing employment opportunities, of course there are a number of conditions that must be met.
According to him, the first prerequisite is that business actors must be made as equal partners, not as suspected or wary parties. With this status, the form of interaction or relationship between the government and entrepreneurs will be mutually helpful and needy.
Moreover, one of the substance of the job creation law is licensing for investment. So the Job Creation Law is a gateway to increase investment realization in 2022.
Indonesia is in a renaissance phase after being hit by the Covid-19 pandemic, strengthening the economic sector should indeed be pursued, such as increasing competitiveness and friendliness of the investment process in Indonesia, and this can be maximized by the implementation of the Job Creation Act.
) *The author is a contributor to the Press Circle and Cikini Students