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The Job Creation Law is the Solution to Overcoming Prolonged Bureaucracy in Indonesia


By : Arzan Malik Narendra )* 

The Job Creation Law that was recently passed by the DPR is a concrete solution capable of breaking down the bureaucracy in Indonesia which has been too convoluted and prolonged, and this has made it difficult for actors in the business world. Therefore the Government seeks to facilitate the business world and economic activities by cutting all bureaucracy.

The Government of the Republic of Indonesia (RI) has issued Government Regulation in Lieu of Law (Perppu) Number 2 of 2022 concerning Job Creation (Ciptaker), and finally passed by the DPR to become Law on March 21, 2023. 

Previously, the Coordinating Minister (Menko) for the Economy, Airlangga Hartarto, stated that the issuance of the Perppu was carried out taking into account an urgent need. This Perppu is considered capable of anticipating global conditions, both related to the economy and geopolitical conditions. 

According to him, the government must be able to quickly anticipate global conditions so that they can immediately face a global recession, rising inflation and the threat of stagflation. Moreover, until now the conflict between Russia and Ukraine has not yet shown an end, coupled with the threat of a food crisis, energy crisis, financial crisis to climate change.

Airlangga also said that the Constitutional Court (MK) Decision Number 91/PUU-XVIII/2020 regarding the Job Creation Law greatly influenced the behavior of the business world, both at home and abroad. On the other hand, the government continues to seek investment as one of the keys to economic growth. Therefore, the existence of this Perppu is expected to provide legal certainty, including for business actors.

Meanwhile, the Deputy Minister of Finance (Wamenkeu), Suahasil Nazara, revealed that the fundamentals of the Perppu on Job Creation are to be able to change how the bureaucracy works in Indonesia. According to him, the main thing that must change in the country is the bureaucracy. It is hoped that there will be a bureaucracy that is able to understand how the business world is, a bureaucracy that really understands the economy.

The Deputy Minister of Finance also emphasized that changes to the way the bureaucracy works are being made so that the business world can develop more, do business comfortably, operate well, and then absorb labor.

Of course, with the existence of a bureaucracy that is very supportive of the convenience of the business world and also understands the economy, this will affect the absorption of labor in the country because MSME actors and other businesses will be greatly assisted.

Not only is it able to increase the absorption of labor figures, with this convenience business actors can be assisted by fulfilling all existing conditions, so that they can be officially registered, can also recruit workers properly and have legal certainty. Also included, these business actors will be able to carry out all operations in the world of business in accordance with applicable regulations.

The Job Creation Law, which was passed from the Ciptaker Perppu, covers various fields, such as tourism, the creative economy, MSMEs, land, railways, hospitals, housing, to the environment. For this reason, the Deputy Minister of Finance advised all Ministries/Institutions (K/L) to review the  policies and regulations in each K/L to make the business world grow more rapidly.

In fact, Suahasil reiterated that indeed the most important thing that the government really needs to pay attention to is related to bureaucratic issues. According to him, there should be a lot of review on what can be done to make the business world in Indonesia develop more rapidly.

The Deputy Minister of Finance asked local governments to work together with technical Ministries/Institutions in the central government to be able to encourage the development of the business world in their respective regions. Furthermore, he revealed that if economic activities can run well and develop rapidly, then of course economic recovery and improvement in people’s welfare will also increase.

Not to be left behind, Suahasil also expressed his appreciation to business actors who have provided input to the government regarding the Job Creation Perppu to better accommodate the needs of the business world. For him, many of these inputs must be reviewed and used as material for consideration on how to make the business world grow.

Now it is believed that the Job Creation Law can change the way the bureaucracy works which will ultimately change the world’s perception of the business that will be run in Indonesia in a broad sense. Not just financial business or trading activities.

So far, in order to be able to apply for a business license or set up a certain PT, you have to go through licensing or bureaucracy, which can be said to be quite complicated and too long. Therefore, the Government is trying to provide convenience to actors in the business world by using the Job Creation Law to be a solution to overcome the prolonged bureaucracy in the country before.

)* The author is a contributor to the Siber Nusa Institute

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