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Perppu on Job Creation Strengthens Indonesia’s Economic Competitiveness


By : Bagas Adrian Nathaniel )*

The presence of Government Regulation in Lieu of Law (Perppu) Number 2 of 2022 concerning Job Creation (Ciptaker) is one of the strategic steps taken by the Indonesian Government in order to continue to strengthen economic competitiveness in Indonesia in facing all the challenges of the global economy in 2023 which full of uncertainty.

The President of the Republic of Indonesia (RI), Joko Widodo has officially enacted the Perppu on Job Creation (Ciptaker) on December 30, 2022. The Perppu is an attempt to implement the Decision of the Constitutional Court (MK) Number 91/PUU-XVIII/2020 which ruled that the Ciptaker Law (UU) previously had conditional unconstitutional status because it was related to its formal formation.

Regarding the issuance of this regulation, BAPETEN Deputy for Nuclear Safety Studies, Dahlia C Sinaga hopes that stakeholders can fully support the implementation of the Job Creation Perppu so that a much more advanced society can be achieved.

Meanwhile, Plt. The Head of BAPETEN, Sugeng Sumbarjo explained that the Perppu on Job Creation has the same legal force as the Law because it is indeed a substitute for the Law. Therefore, with the Perppu on Job Creation, it will revoke the validity of Law Number 11 of 2020 concerning Ciptaker and it will soon be enacted into law after obtaining approval from the People’s Representative Council of the Republic of Indonesia (DPR RI).

On the same occasion, Assistant Deputy for Increasing Economic Competitiveness of the Coordinating Ministry for Economic Affairs, Ichsan Zulkarnaen revealed that the background to the issuance of the Job Creation Perppu was indeed an answer to all urgent needs and was also able to fill the legal vacuum to deal with all the uncertainties in global economic conditions which could have an impact on rising inflation. food prices which are now starting to be felt in Indonesia.

According to him, with the presence of the Job Creation Perppu it is able to further strengthen the domestic side to continue to encourage structural transformation that can help all people in Indonesia, including being able to help business actors.

On the other hand, the Director General for Industrial Relations and Social Security at the Ministry of Manpower (Kemenaker), Indah Anggoro Putri, said that the issuance of the Perppu on Job Creation was aimed at anticipating the impact of the global economic turmoil.

He added that the Government of the Republic of Indonesia continues to strive to provide a strong legal basis for the government and institutions so that they are able to take policies and steps as soon as possible. Furthermore, according to him, there are two urgencies in the issuance of the Job Creation Perppu, namely the first is because Indonesia itself still needs quality job creation.

Furthermore, according to Indah Anggoro Putri, the second urgency for the issuance of the Job Creation Perppu is because Indonesia itself really needs to strengthen the fundamentals of the national economy to continue to maintain its economic competitiveness. He added that currently there has been a weakening of economic growth and also an increase in price rates or stagflation, in which world economic conditions are also projected to worsen in 2023.

Indah revealed that the purpose of issuing the Perppu was to be able to create and increase jobs as an effort to continue to absorb the widest possible Indonesian workforce, including being able to guarantee that every citizen gets a job and receives fair and proper compensation and treatment in employment relations.

Based on data from the Central Statistics Agency (BPS), the total workforce in February 2022 was 144.01 million people, this figure has increased by 4.20 million people when compared to the same period, namely in February 2021. Then, the data BPS also shows that the working population in Indonesia is 135.61 million people, of which 81.33 million (59.97 percent) of whom work in informal activities.

The existence of the COVID-19 pandemic has affected as many as 11.53 million people (5.53 percent) of the working age population, namely they become unemployed with a total of 0.96 million people, 0.58 million people do not work and working residents who experience reduced working hours by 9.44 million people. Therefore, it is indeed necessary to increase wages whose growth is adjusted in line with economic growth and also an increase in worker productivity.

The Job Creation Perppu itself has also made adjustments to various regulatory aspects related to Cooperatives and MSMEs as well as the national industry, including making adjustments related to efforts to improve the investment ecosystem, facilitate and accelerate national strategic projects.

All the things that have attempted to be corrected and adjusted in the Job Creation Perppu to the enforcement of the previous Ciptaker Law are very strategic steps taken by the government to continue to strengthen the country’s economic competitiveness.

)* The author is a Kawiwara Pustaka Contributor

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