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The Job Creation Law Saves the Indonesian Economy


The Job Creation Law will save the Indonesian economy because there are investment clusters that make it easier to invest in this country. With the help of foreign investment, the economy will be more lively. Indonesia will survive the threat of a global recession in 2023.

The government is focusing on recovering the national economy and one of the ways is by implementing the Job Creation Law. The reason for this is because this law overhauls the complicated bureaucracy and streamlines the path of entrepreneurs. Apart from that, the Job Creation Law has also attracted the interest of foreign investors, so that there will be more cooperation projects in Indonesia.

After being hit by a pandemic storm for 3 years, then 2023 is a moment for awakening, so that we don’t sink too long in the economic gloom. The government is moving quickly by creating a national economic recovery program and formalizing the Job Creation Law, which will stimulate the country’s financial growth to improve.

The Coordinating Minister for the Economy Airlangga Hartarto said the Job Creation Law had succeeded in saving the Indonesian economy from the Covid-19 pandemic. The World Bank reports that thanks to Job Creation, Indonesia is the second largest country receiving Foreign Direct Investment/FDI in Southeast Asia.

Airlangga continued, the level of FDI (foreign investment) in Indonesia increased by an average of 29.4% in the 5 quarters after the publication of the Job Creation Law, when compared to the FDI level of 5 quarters before the Job Creation Law was published.

After the Job Creation Law is passed, it will create conducive business climate in Indonesia. Final investors are interested in investing in Indonesia, even in the midst of a fluctuating global economic situation. Data from the Ministry of Investment even revealed that investment realization in 2020 was Rp. 826.3 trillion.

Not only that, the Organization for Economic Co-operation and Development (OECD) reports that the implementation of the Ciptaker Law can reduce barriers to FDI by more than a third and reduce trade and investment barriers by almost 10% by 2021.

The Job Creation Law also has a cluster for ease of doing business, because business licenses are based on risk. So that small and medium businesses such as stalls only need a business license, while obtaining permits is also fast, a maximum of 7 working days. Foreign entrepreneurs will be happy because business legality comes out quickly, because for them time is money.

President Jokowi did emphasize speed and clarity in making regulations and government protocols. So the Job Creation Law is a powerful drug to treat the complicated licensing and bureaucratic processes that have hampered foreign entrepreneurs. They will get legality quickly and immediately start new factories and projects, which will roll back the wheels of the economy in Indonesia.

When there is a cooperation project with foreign investors, the system is profit sharing and must be mutually beneficial. So there is no such thing as a new model of colonialism, because everything is bound by clear regulations and letters of cooperation. Moreover, there is an investment management institution (LPI) as a supervisor and manager, so that foreign investment will run smoothly.

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 are a combination of 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 is affected by the global economy, where there is a threat of a recession in 2023. Apart from that the world is also recovering from the effects of a pandemic which has also had a negative 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.

Why is there a pro-investor law? 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 positive domino effect of the Job Creation Law is that this regulation attracts many investors and new factories and businesses emerge. The business world is becoming more dynamic and automatically adding jobs. People can work again and get a monthly salary. With this salary, it can be spent and the wheels of the country’s economy run fast.

Indonesia’s economic growth is heading in a positive direction and people are no longer afraid of being overshadowed by recession, inflation or financial crises. They believe that the government will make pro-people regulations. One of them is the Job Creation Law.

The Job Creation Law will save the Indonesian economy because it is very pro-investor. 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 Vimedia Pratama Institute Contributor

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