By: Fabian Aditya Pratama )*
The government has just passed the Job Creation Law (UU) in early 2021. This law will help Indonesia’s economic growth. This law makes it easier for entrepreneurs to run their business, so that it is easier to penetrate the international market. MSME entrepreneurs also receive assistance from the government.
To deal with the impact of the pandemic on the economy and stabilize Indonesia’s finances, one of the government’s steps is to pass the Job Creation Law. With the existence of a new law, economic stability will improve. Especially after the pandemic, when the country’s financial condition was unstable.
The ratification of the Job Creation Law is seen as capable of creating a quality business and investment climate for the business world, including micro, small and medium enterprises (MSMEs) and foreign investors. University of Indonesia (UI) Economic Observer, Fithra Faisal, stated that the Job Creation Law is to create jobs profusely. In terms of magnitude, the goal of the Job Creation Law is to increase economic growth at least six percent.
From this target, Indonesia can escape the middle class income trap and if economic growth increases there will be new jobs.
Fithra continued, implementation on the ground can be a reflection of the implementation of the Job Creation Law. During the Covid-19 pandemic, people stopped carrying out economic activities, the government made a Perppu which was later passed into the Job Creation Law.
In 2020, the economy will grow by minus 2.27 percent, but based on the results of an evaluation of the simulations carried out, if there are no laws that produce fiscal stimulus, we could be minus 4 percent. If no law is made then economic growth will only increase slightly.
The application of the Job Creation Law is an economic savior because there are simplified permits. So that investors will be interested because the investment regulations are not confusing.
If in the past they wanted to invest in Indonesia but canceled because the licensing process took too long, now they don’t. Because there is already a cluster for ease of doing business in the Job Creation Bill. When dealing with permits, it is not certain that the permit will be issued quickly because of the long bureaucracy.
But now the steps to formalize a Limited Liability Company will be faster, because it can be done through online channels . Investors are excited because the official permits are issued quickly so they can do business safely in Indonesia. This country is considered suitable for investment because it has potential natural resources and intelligent human resources.
In the investment cluster will be able to change economic conditions in Indonesia. Because in addition to increasing the incoming investors, those who will make projects from investment are prioritized to create labor-intensive industries, such as textile factories. So that it can absorb a lot of labor and reduce the number of unemployed in Indonesia.
In addition, investors also get business priority in digital-based companies. Currently, many young people are smart and creative and create start-up companies companies but lack the capital to expand their business. When investors come in and pour money in, their business can run smoother and automatically need more employees.
This will create a positive domino effect because employees will become prosperous and purchasing power will increase again. When purchasing power increases, the market will become more sophisticated and sellers sell well. The wheels of the economy turned again and economic growth in Indonesia increased again. This country can survive the threat of a terrible recession.
Meanwhile, the Coordinating Minister for the Economy, Airlangga Hartarto claims the Job Creation Law (UU) which was passed at the DPR Plenary Meeting provides many benefits for the Indonesian economy. Apart from providing legal certainty, the presence of the law will also encourage investment to enter the country, as well as to move MSMEs which were previously in the informal sector to become the formal sector.
Airlangga added that in the Job Creation Law, the government also made it easier for MSMEs to obtain halal certification. In addition, various policies are made flexibly, especially in the employment cluster. With the enactment of the Perppu on Job Creation to become a Law, the PP rules will soon be revised and of course become timely with the passage of the Job Creation Law. During these two years there was an opportunity to evaluate the PP.
In the Job Creation Law there are MSME clusters and ease of doing business clusters that will make it easier for small and medium-level businesses. They must be assisted because 90% of traders in Indonesia are MSMEs, so saving them also helps the country’s economy.
In the Job Creation Law there are several rules that facilitate the performance of MSMEs in Indonesia. First, there is the acceleration of digitalization of MSMEs. The digitalization acceleration is carried out by the Ministry of Trade and cooperates with the private sector. MSMEs will learn how to do business online and take advantage of networks in the digital era.
The acceleration of digitalization is very important because now is the era of information technology and online shops are very widespread. But unfortunately there are still MSME actors who do not use the internet as a promotional medium. Even if someone has social media, it is only used for status updates . Though it can also be used to market its products.
The implementation of the Job Creation Law helps economic growth in Indonesia. First, Indonesian citizens who have small and medium-level businesses (MSMEs) benefit because business management is made easier and their business runs smoother. Second, investment will be facilitated so that investment-produced factories will be built, and reduce the number of unemployed people in Indonesia.
)* The author is a contributor to Nawasena Institute
