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The Job Creation Law Provides Legal Certainty to Increase Investment


By: Maya Naura Lingga )*

The Job Creation Law is not just a law because it was deliberately designed for the advancement of Indonesia, one of which is in the field of investment. There are various facilities provided thanks to this law, thus providing convenience for foreign investors. Legal certainty will be given and they can do business in Indonesia safely.

Indonesia is a constitutional state and the government has the right to make laws, including the Job Creation Law. The law, which was inaugurated at the end of 2020, is called the sweepstakes law because it includes almost all fields, from the economy to investment. The Job Creation Law also functions to prevent hyper-regulation which results in overlapping bureaucracy.

One of the parties who benefit from the Job Creation Law are investors because they get legal certainty. So, they can invest safely because they have a clear legal umbrella. Legal certainty is important because the investment value is no joke, it can reach billions of rupiah. If there is legal certainty, investment in Indonesia will increase rapidly.

The Indonesian Chamber of Commerce and Industry (Kadin) welcomes the Job Creation Law. Chairman of Kadin, Arsjad Rasjid, stated that legal certainty for investors will have an impact on creating jobs and reducing poverty. The key is how to bring in even bigger investments, to create more jobs.

Legal certainty must be given because investment projects in Indonesia are no joke, aka big-class. Investors are willing to provide a lot of capital to build factories or start projects, because they believe that Indonesia is a country with potential. The proof is its abundant natural and human resources, as well as its strategic position.

Imagine if there was no Job Creation Law as a legal umbrella, it would not be certain that investors would want to enter Indonesia. The reason is, they are afraid that when they have built the factory, it turns out that there is a paragraph in the law that has been changed. This became very terrible because everything was so chaotic.

However, when there is a Job Creation Law with an investment cluster, it is a guarantee for foreign investors, that investing in Indonesia is very safe, comfortable, and the processing of permits is accelerated, because it is online based. In addition, permits were made easier and no longer as long-winded as in the New Order era.

Guarantees for foreign investors must be given, because they are willing to spend capital for Indonesia. The safety factor is number one, and legal protection is the main one. Do not let rubber articles or misuse by unscrupulous persons damage trust.

Trust is indeed expensive and luckily investors choose to trust the government, so they don’t hesitate anymore to enter Indonesia. They want to invest because President Jokowi himself has guaranteed security for investors.

If there is trust, projects will run smoothly and factories will be built. We will rise after being hit by the pandemic and survive the threat of recession. Development can be continued with the results of investment profits and incoming foreign exchange.

The government has indeed avoided the classic way of building, namely by way of debt, because it will burden the people in the future. Therefore investments are chosen to be safer and provide real results. If debt piles up, it can cause various negative consequences, ranging from the threat of inflation to the second economic crisis, even ending in bankruptcy.

Therefore, investment continues to be encouraged so that there is an even distribution of development, not only in Java but also in Kalimantan and other islands. Investors also want to invest outside Java. The reason is because there is already clear legal certainty and the infrastructure there is adequate, making it easier for mobility.

Meanwhile, an economic observer for Unika Atma Jaya, Rosdiana Sijib, said that Indonesia’s ease of doing business index was not very good. The existence of the Job Creation Law is for the creation of a good and more friendly ecosystem for foreign investors.

This legal protection is very important to show that Indonesia is a state of law. The government enforces the law with discipline so that foreign investors need not fear thuggery. There is no violence at all because everything is in the Job Creation Law.

If there is legal protection, then legal investors will want to enter Indonesia. We have a lot of potential natural resources and mines so that we can build an electric car battery factory and various other factories.  

The Job Creation Law was indeed created by the government to provide legal protection for investors, especially foreign entrepreneurs. If there is protection like this, they will want to do business in Indonesia because they are sure of its safety. That way, the business world in Indonesia will be more advanced.

)* The author is a contributor to Nusantara Reading Room

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