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Academics Value the Job Creation Law Helping Economic Growth


As the social restriction policy was abolished, economic activity in Indonesia must continue to thrive considering the economic conditions in Indonesia which have been in a slump since the Covid-19 Pandemic hit. The passing of the Job Creation Law is the hope that there will be a stimulus for industrial movements and national investment.

Macroeconomic economist Teuku Riefky said that this policy would certainly have a significant impact on the economy if you look at the points there.

According to Riefky, various On condition that the implementation of the Job Creation Law can be carried out properly and consistently.

​The economist from the University of Indonesia’s Economic and Social Investigator (LPEM) said that this regulation will depend heavily on how it will be implemented in the field. This is not only a matter of rules, but also solid implementation.

​As previously reported, the People’s Representative Council of the Republic of Indonesia (DPR RI) through a plenary session on Tuesday (21/3) passed Perppu 2/2022 to become a law. The ratification was agreed upon by the majority of party factions in parliament.

​On this occasion, the Coordinating Minister for the Economy Airlangga Hartarto said the law would encourage investment and stimulate the Micro, Small and Medium Enterprises (MSMEs) sector. The legal product is also said to regulate flexibly regarding employment in the country.

​This will provide legal certainty, encourage investment and also move MSMEs that were previously in the informal sector to become the formal sector.

​On a different occasion, Legal Observer from Gadjah Mada University, Prof. Nindyo Pramono said that the ratification of Perppu Number 2 of 2022 which was carried out by the DPR showed that the DPR and the Government both agreed on the substance contained in this Perppu .

The government itself seems to have accommodated the aspirations of the community regarding various issues regulated in the law, such as labor wages and halal certification. After being accommodated and corrected, the Work Creation Perppu entered into and was ratified by the DPR. This means that the DPR agrees with the substance of the Perppu to become a law as proposed by the government.

​Continued , Prof. Nindyo explained that there are important benefits from the ratification of Perppu No. 2 of 2022 as a law specifically related to the ease of doing business in Indonesia. According to him, before there were regulations such as the Job Creation Law, investment facilities in Indonesia were still less competitive than ASEAN countries. This Job Creation Law has accommodated the need for economic growth and investment climate flows that are coming into Indonesia.

​He views that the use of the omnibus Law method in the Job Creation Law is what is considered appropriate. By using the omnibus method, of course, the government does not need to revise every related law so that it can accelerate the process of drafting regulations.

In several sub-sectors related to the investment climate, such as the mining, fisheries and licensing and other sectors, this has been accommodated by the Job Creation Law. If each related law is corrected one by one, of course it will take a long time.

In addition, the government must immediately carry out socialization after it is passed into law by the DPR. Even though the socialization seems to only be visiting giving lectures and announcements. However, when it comes to education for the public to obey the law, things like socialization must be carried out.

Prof. Nindyo also invited various parties to be able to study and read the legal product. This is very important so that the public can understand the positive impact that the Job Creation Law has had on the economic sector and the workforce.

Please note that the Job Creation Law is a long journey. The government’s reason for issuing laws is a combination of the urgent need to face the threat of global uncertainty, both related to the economy and geopolitics, then there is a legal vacuum, so there is a need for legal certainty.

​The background to the birth of the law is the need for the state to strive for citizens’ rights to work and a decent living for humanity through work creation. There is a need for efforts to absorb the widest possible Indonesian workforce in the midst of today’s tough competition.

Interestingly, the positive domino effect of the Job Creation Law is that this regulation is able to attract investors and stimulate new businesses, so that employment opportunities will also increase. So that the business world becomes more dynamic. The community can also work again and get a monthly salary which can be used for shopping so that the wheels of the economy will run.

​Indonesia’s economic growth

The Job Creation Law The community will also benefit because the Job Creation Law provides convenience for permits to open a business.

)* The author is a contributor to the Nusantara Reading Room

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