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Job Creation Law Encourages Economic Growth

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By : Janu Farid Kesar )*

The government is working hard so that the economy does not collapse amid the threat of a global recession that is currently hitting. One of these efforts is to initiate the Job Creation Law which is able to summarize regulations while at the same time being able to encourage economic growth.

The pandemic has been going on for a long time. However, even though the corona has subsided, the effects of the pandemic are still being felt because the people’s economy is still faltering. There are employees who have lost their jobs. There are also entrepreneurs who have lost customers because they chose to buy groceries over other necessities. If it continues like this it will be dangerous, because the circulation of money is slow.

Therefore the government passed the Job Creation Law which will have a positive impact on the country’s economy. University of Indonesia (UI) economist Fithra Faisal stated that the Job Creation Law is the most important pillar to encourage exports and support economic growth in Indonesia. 

Fithra added, the Job Creation Law was able to create the widest possible job opportunities, besides that it was also able to increase the economic growth target at a minimum, so that Indonesia would be released from the middle-class economy. Then, there are aspects of equity and simplification in the Job Creation Law. 

So far, investors still do not have a clear legal umbrella when they invest in Indonesia. Therefore, it really needs a legal umbrella in a short time, one of which is through the ratification of the Job Creation Law.

The government made the Job Creation Law and its derivative regulations as a powerful solution, so that people don’t experience a financial crisis during a pandemic. This law, known as sweepjagat, regulates various matters to be in line with President Jokowi’s ideals, namely bureaucratic reform. Because if you want to make positive changes to the country, what needs to be improved is the regulations.

So far, people have always complained about the rigid and convoluted bureaucracy. However, with the Job Creation Law for the ease of doing business, there are permits that have the road widened. Entrepreneurs no longer have to wait long to get business legality, but it only takes 7 working days to get it. This permit can also be managed  online .

By managing permits via  online  , entrepreneurs will save time, because it is very practical and done quickly. Provided that the conditions are met, for example  a scan  of the KTP, KK, and other documents. Moreover, risk-based licensing, so that MSME entrepreneurs who are categorized as low risk, get legality quickly.

With a business license in hand, entrepreneurs will be more confident in running their business. When the business is official, then he can look for investors to work with. So that it will get an injection of capital from investors. The business can run smoothly again because there is additional money to produce goods.

When there is production, then there is also marketing, so that he will get another profit. The shop that was closed at the beginning of the pandemic will rise again. Entrepreneurs will try hard to increase their turnover, so that the trust of investors will increase. So they will both benefit.

If the business is going to grow, it will need new employees. So they can pay people and reduce the number of unemployed in Indonesia. Because during the pandemic, more and more unemployed people were worried because they were at home and never got a job. If entrepreneurs succeed, there will be new hope for them, so that their business will be even better.

Meanwhile, the Head of the Legal Bureau of the Ministry of Manpower, Reni Mursidayanti, stated that the Job Creation Law is a long journey. The government’s reasons for issuing laws include 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.

Reni continued, the background behind the birth of the law was that the state needed 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.

In a sense, the Job Creation Law was created because of the state of the Indonesian economy which was affected by the global economy. Where there is a threat of a recession in 2023. Apart from that, the world is also just recovering from the effects of the pandemic which has also had a bad impact on the economies of many countries.

For this reason, the government does not want to add to the burden on the people by continuously going into debt to nourish the Indonesian economy. However, the way to do this is by passing the Job Creation Law which is pro-investor and from the money obtained, it will be ‘played’ to support economic growth in this country.

When there are investors, there will be a positive domino effect. Where did they come and build various factories with various fields in Indonesia. The economy grew because the business world became more dynamic and new factories emerged. Investors are sure to invest their capital because there is a guarantee from President Jokowi and the Job Creation Law as a strong legal umbrella.

The Job Creation Law will boost Indonesia’s economic growth. Where this rule really supports business development. With so many businesses resulting from investment, the state’s financial condition will be healthier. The community also benefits because many factories have been established and they get jobs, so they can meet their needs.

)* The author is a contributor to Nusantara Reading Room

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