By : Andika Kurniawan )*
The Job Creation Law (UU) which has been passed by the DPR RI is one of the policies that has positive implications for increasing investment. Not only that, the existence of the Job Creation Law is also believed to be able to keep the economy growing stably amidst global uncertainty.
One important aspect of the Job Creation Law is the simplification of business licensing. Previously, the licensing process in Indonesia was known to be very bureaucratic and took a long time. Through this law, the government is introducing a risk-based licensing system, where the type of licensing will be adjusted to the level of risk of the business. This aims to speed up the licensing process and reduce administrative obstacles.
The Job Creation Law also regulates significant changes in the employment sector. For example, there are changes in provisions regarding minimum wages, severance pay and working hours. The aim is to create greater labor flexibility, so that it can attract more investors who need large amounts of labor at more competitive costs.
Secretary of the Job Creation Law Task Force, Arif Budimanta, explained that the Job Creation Law exists to simplify regulations on investment activities for business actors, both from BUMN and from the community such as MSMEs. The government continues to provide outreach to the wider community regarding the policies in the Job Creation Law, especially regarding business licensing for business actors.
Through the Job Creation Law, the government is also trying to increase Indonesia’s attractiveness as an investment destination. One way is to provide fiscal incentives, such as tax reductions for companies that invest in certain sectors. Apart from that, the formation of new institutions such as the Indonesia Investment Authority (INA) also aims to manage investment funds more effectively and efficiently.
Drafter of the Legislative Regulations, Intermediate Expert for the Ministry of Tourism and Creative Economy, Merry Ruslina Ambarita, said that after the Job Creation Law came into force, tourism licensing had been integrated through OSS only.
The Job Creation Law pays special attention to sectors that are considered strategic and have great potential to encourage economic growth. Some priority sectors include the manufacturing industry, tourism and information technology. By providing various incentives and facilities, the government hopes to attract more investment in these sectors.
Intermediate Expert Investment Management Director of the Directorate of Investment Deregulation, Delfinur Rizky, said that after the Job Creation Law, the increase in investment experienced a fairly good upward trend.
In the last 5 years, the investment trend has increased and exceeded the target of up to US$ 14,000. The convenience following the Job Creation Law is not only in the issuance of NIB, but halal certification is also made free and the issuance of SNI is accelerated, licensing is easy for individual PTs, as well as ease in the partnership system between large businesses and MSMEs.
With the ease of licensing and employment flexibility, many new companies have started to establish and create job opportunities. This of course has a positive impact on the national economy, because it can reduce the unemployment rate and improve people’s welfare.
The Job Creation Law also plays an important role in increasing Indonesia’s competitiveness on the global stage. With more efficient regulations and a more conducive business environment, Indonesia has become more competitive compared to other countries in the Southeast Asia region. This is proven by the entry of several multinational companies who have chosen Indonesia as their production base.
Even though it has had many positive impacts, the Job Creation Law also faces various challenges and criticism. Some groups believe that this law benefits entrepreneurs more than workers. Changes in employment provisions, such as reduced severance pay and flexibility in employment contracts, are considered to be detrimental to workers’ rights. Apart from that, several parties are also concerned about the environmental impact of accelerating investment, because there is an opinion that the Job Creation Law makes licensing easier in sectors that pose risks to the environment.
The Indonesian government is aware of these criticisms and challenges, and continues to strive to make improvements and adjustments. For example, through dialogue with various related parties, including trade unions and environmental organizations, to ensure that the implementation of the Job Creation Law can run well and fairly.
The Job Creation Law has great potential to encourage increased investment and lead Indonesia towards a stronger economy. However, to realize this potential, continuous efforts are needed from the government, business actors and society. With solid cooperation, Indonesia can become an attractive country for investors and achieve sustainable economic growth.
The Job Creation Law is a strategic step by the Indonesian government to encourage increased investment and economic growth. With various changes and simplification of regulations, this law is expected to create a more conducive business climate and attract more investors.
Despite facing various challenges and criticism, the positive impact produced so far shows that the Job Creation Law has great potential to change the face of the Indonesian economy. The government, business world and society need to work together to ensure that the objectives of this law can be achieved well, for the sake of mutual prosperity and progress of the nation.
)* Student at the PTS Economics faculty in Yogyakarta
