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People are Optimistic that the Job Creation Law will improve the Indonesian economy


Indonesia is the largest country in Southeast Asia economically, so the trend of global value pooling has benefits. On November 2 2020, President Joko Widodo officially ratified the Job Creation Law (UU). The aim of ratifying the Job Creation Law is to shift economic growth rates to the investment side by simplifying the licensing and harmonization process so that the government can respond more quickly to changes or global challenges faced.

The government and academics have also agreed that the Job Creation Law has great benefits for the Indonesian economy. Secretary of the Job Creation Law Task Force, Arif Budimanta, said that the Job Creation Law had been declared constitutionally valid by the Constitutional Court. On that basis, the government will continue to socialize this Law to the wider community.

He also added that the ultimate goal is to create a condition that exists in the spirit of Pancasila, through deliberation to reach consensus and  meaningful participation. Furthermore, Arif explained that the Job Creation Law is not only for one group, but involves various parties starting from implementers such as financial institutions and MSMEs to access these services So that business activities are not limited to Limited Liability Companies, but there are also individual companies and cooperatives through micro, small and medium enterprises.

Arif emphasized that the Quo Vadis Job Creation Law is in line with its main objective, namely building broad employment opportunities by expanding the business economy, empowering MSMEs, as well as aspects of environmental sustainability that are in accordance with Pancasila.

Meanwhile, the Head of the UGM Center for Pancasila Studies, Agus Wahyudi, said that the Job Creation Law needs to be supported because it can encourage Indonesia’s economic growth. The Job Creation Law is an effort to create an equal partnership based on Pancasila.

Even though the Job Creation Law is constitutionally valid, up to now, it has still received protests and rejection from various groups. On this occasion, Professor at Gadjah Mada University (UGM), Prof. Gunawan Sumodinigrat said the government needed to make efforts to minimize controversy and protests against the law.

According to him, efforts that can be made include open dialogue, better socialization, and continuous monitoring and evaluation. Furthermore, Gunawan explained the advantages of the Job Creation Law compared to the previous Employment Law, namely increasing economic competitiveness, flexibility for workers and entrepreneurs, ease of business processes, and village and regional empowerment.

Apart from that, Professor at the University of Indonesia, Bambang Shergi Laksmono, said that the Job Creation Law needs to be supported by strengthening the employment service system and social security system. Indonesia is undergoing a transformation. The spirit of the CK Law is to enable the market to work optimally.

Meanwhile, according to the Professor at Muhammadiyah University, Jakarta, the Job Creation Law is a red carpet for investment and development. The Red Carpet in the context of the Job Creation Law has the value of disrupting legislation, bringing a mission or orientation to ease of doing business, reforming government administration bureaucracy, and being pro-development.

Previously, the Constitutional Court (MK) assessed and stated that the formal process of establishing the Job Creation Law did not conflict with the 1945 Constitution and therefore the Job Creation Law still had binding legal force.

Head of the Communication, Information Services and Conference Bureau of the Coordinating Ministry for Economic Affairs (Kemenko Ekonomi) Haryo Limanseto said it is hoped that the Job Creation Law can encourage the expansion of employment opportunities through facilitating, protecting and empowering cooperatives and MSMEs, improving the investment ecosystem, accelerating national strategic projects, increasing protection and welfare of workers, as well as strengthening the national economy in facing the future global economic situation.

Optimism that the Job Creation Law can encourage economic growth is increasingly visible through investment realization in the first quarter of 2023 which reached IDR 328.9 trillion, an increase of 16.5% YoY. This data was adapted from the Ministry of Manpower of the Republic of Indonesia.

The Director General of Industrial Relations Development and Social Security for Workers (PHI and Jamsos) of the Ministry of Manpower, Indah Anggoro Putri, said that her party was very optimistic that the existence of the Ciptaker Law would be as expected, namely that it could create a conducive investment climate while encouraging additional job opportunities.

He added that the Ciptaker Law is very important for national interests. Bearing in mind that various international institutions predict that the global economy will be filled with uncertainty throughout 2023. According to him, this is an anticipatory step for us to face this uncertainty and at the same time to ensure the creation of legal certainty.

He also ensured that the Job Creation Law provided certainty in the protection of workers/laborers. He confirmed that in the Ciptaker Perpu, entrepreneurs are not allowed to terminate employment relations (PHK) unilaterally. Apart from that, workers/laborers who experience layoffs also receive severance pay, reward money, etc. Apart from that, those who have been laid off also receive social protection in the form of the Job Loss Guarantee (JKP) program.

So that when problems arise in employment relations, they must be resolved through available negotiation channels, from bipartite negotiations to industrial relations courts.

So, never assume bad thoughts about the ratification of the Job Creation Law. Because in fact law in Indonesia is flexible, which means it follows global dynamics which are constantly experiencing change and upheaval, such as the current example, namely the uncertain global economy. Let’s all support this Job Creation Law which will later be able to foster the Indonesian economy so that it becomes fertile.

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