Investment in Indonesia was once considered a complicated matter, until finally the government tried to make investment in Indonesia excited. To stimulate investors, the government launched the Job Creation Law (UU Ciptaker).
The Minister of Investment/Head of the Investment Coordinating Board (BKPM) of the Republic of Indonesia, Bahlil Lahadalia, is optimistic that the Job Creation Law will facilitate licensing for companies wishing to invest in various regions in Indonesia, as well as building downstream businesses.
Bahlil said, the Job Creation Law lured investors to come to invest their capital and for downstream purposes. According to him, without the Job Creation Law investors would find it difficult to invest in realizing downstream oriented energy and green industries, such as building an electric vehicle battery ecosystem.
Bahlil explained, now the government is carrying out downstreaming in the framework of green energy and green industry. If there is no Job Creation Law, you cannot build an electric vehicle battery ecosystem. Nickel is the material for the battery and Indonesia is the second largest nickel producer in the world. Several large investments have entered this field, if there is no Job Creation Law they cannot enter .
Bahlil revealed that the government had invited global investors to invest domestically, where Indonesia would be the only country in Southeast Asia that focuses on carrying out value-added processes in its own country.
This has been running, this has started, he invites investors to come with technology, capital and a portion of the market. Bahlil admitted that he was assigned by the President to provide guarantees for accelerated licensing to investors.
As is well known, the DPR has decided to pass Government Regulation in Lieu of Law No. 2 of 2022 Concerning Job Creation to become law at a plenary session, Tuesday, March 21, 2023.
Previously , the ratification of the Job Creation Law sparked public protests, which led to a lawsuit being filed at the Constitutional Court. In its decision, the Constitutional Court declared Law Number 11 of 2020 concerning Job Creation to be formally flawed. The Constitutional Court also stated that the Job Creation Law was conditionally unconstitutional.
Please note that previously the licensing bureaucracy was one of the obstacles to increasing investment through ease of doing business. This is reflected in the report on the ease of doing business (EoDB) conducted by the World Bank for 190 countries, including Indonesia.
Even though Indonesia has entered the upper middle-income country group, Indonesia still faces challenges in getting out of the middle-income trap, where a country’s economy cannot increase to become a high-income country.
Investors themselves actually demand facilities such as legislation that are consistent and guarantee legal certainty in the long term. Then the licensing procedure is not complicated which results in a high economic cost.
In addition, investors also want guarantees for investment and legal protection for intellectual property rights (IPR). He continued, investors also want to get supporting facilities and infrastructure, including communication, transportation, banking and insurance. Therefore, the Job Creation Law is a concrete step that can reduce the problem of overlapping regulations governing investment licensing.
Indonesia needs to learn from two crises, namely the 1997-1998 crisis which spent IDR 600 trillion of public money for a blanket guarantee policy which until now has not been fully recovered. now. Thus , in order for the Indonesian economy to strengthen, investment is needed to stimulate business growth and employment.
The main objectives of the Job Creation Law are to encourage a business climate, accelerate economic transformation, align central-regional policies, provide ease of doing business, overcome overlapping regulatory issues and eliminate sectoral egos.
Please note that with the existence of the Job Creation Law, investment in Indonesia has increased. In 2021, investment realization amounted to 900 trillion rupiah and the target for 2022 is 1,200 trillion rupiah. This is of course very good because the more investment the more foreign exchange that comes in.
This is proof that the Job Creation Law is able to increase business and investment in Indonesia. This regulation is a weapon to increase the entry of foreign investors into Indonesia. The reason is because the requirements for investing and obtaining permits can be done without coming to the office or can be done online, namely through online single submission (OSS).
Convenience and security are of course the factors that attract investors to look at Indonesia as a destination for investing.
It is hoped that the Job Creation Law
)* The author is a contributor to the Perkasa Media Institute
