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The Positive Impact of the Job Creation Perppu for Indonesia’s Economic Growth


Indonesia’s economic growth is something that is often highlighted during and after the pandemic. The government also launched a Government Regulation in Lieu of Law (Perppu) on Job Creation which is considered to have a positive impact on Indonesia’s economic growth.

         Economic growth in Indonesia had experienced an uncertain phase, especially during the pandemic. The Indonesian economy was under pressure when the Covid-19 pandemic hit. This pressure is characterized by the large number of employees or workers who are laid off or affected by layoffs, this apparently causes people’s purchasing power to decrease.

Even though every year there is a labor force looking for work, so the number of unemployed has increased quite significantly.

Coupled with social restrictions that make companies lay off employees for the sake of production cost efficiency.

Prof Tadjuddin said that the demographic bonus that Indonesia could take advantage of needed to be supported by a conducive employment situation. He underlined that job creation is something that is urgent and must be carried out by the Government of Indonesia.

In a written statement, Tadjudin said that Indonesia has an advantage in demographic bonuses but has limitations in the availability of jobs. Therefore, the Job Creation Perppu is the answer to this problem.

Meanwhile, Udayana University economist I Gusti Wayan Murjana explained the purpose of the Job Creation Perppu.

He explained that the Job Creation Perppu was an effort by the government to achieve the big goal of making Indonesia a developed country in 2045.

Wayan said, to create an advanced Indonesia in 2045, of course, it requires expanding investment and expanding job opportunities, of course the Job Creation Perppu is able to provide these two things.

He said, based on the latest data, the issuance of the Job Creation Perppu had been able to increase investment in Indonesia.

Since the Job Creation Law was enacted in 2020, the investment value has increased greatly in 2021 even though there is still a pandemic. So it becomes important for the Indonesian economy.

Meanwhile, Ibnu Sina Chandranegara, an expert in constitutional law from the University of Muhammadiyah Jakarta, stated that the Job Creation Perppu is the right alternative choice considering the uncertainty of the global economic situation facing Indonesia.

He revealed that the Job Creation Perppu was drawn up because of a pressing urgency regarding global economic issues by adopting the revised 2020 Job Creation Law.

He also denied the presence of the Job Creation Perppu which was considered an unconstitutional action because it was the president’s prerogative.

Ibnu explained, as long as it fulfills the provisions of Article 22 of the 1945 Constitution, the issuance of Perppu by President Joko Widodo is constitutional and does not violate statutory regulations.

A student from the Faculty of Economics, Panji Sakti University, Agung said he agreed with the issuance of the Job Creation Perppu. He saw that this regulation would have a positive impact on job creation.

Agung revealed that his party agrees that the Job Creation Perppu is born for the sake of creating jobs. Moreover, the number of job seekers will continue to appear along with the large number of graduates from both high schools and universities.

UUCK Task Force Secretary Arif Budimanta said, through the Job Creation Perppu this could be an effort to advance the nation’s economy and create a positive world of work ecosystem.

The Job Creation Perppu itself is a form of improving the Job Creation Law through a public participation mechanism. The aim is to create business convenience and certainty, investment growth, as well as protection and empowerment for MSMEs amid global economic uncertainty.

On a different occasion, Deputy Minister of Finance (Wamenkeu) Suahasil Nazara asked ministries and institutions to intensify socialization and public dialogue regarding Perppu No 2 of 2022 concerning Job Creation. The Job Creation Perppu issued on December 30 2022 is an anticipatory step for the government to deal with economic uncertainty in 2023 while at the same time guaranteeing legal certainty.

He said that entering 2023 Indonesia would enter an era of high economic uncertainty due to the threat of a global recession. One third of the world’s countries are threatened with a recession, the impact of tightening monetary policy which is the impact of rising inflation conditions throughout the world. Rising inflation conditions disrupted price stability.

Even though Indonesia is not one of the countries that will be hit by a recession, Indonesia must also anticipate the threat of a recession by exercising business certainty.

The issuance of the Job Creation Perppu is important in order to provide guarantees to all elements, not only to employers, but also to workers. Moreover, workers affected by layoffs are entitled to a Job Loss Guarantee of 45% of salary and receive training in the form of retraining and reskilling. Both of these are given for 6 months to workers affected by layoffs.

The Job Creation Perppu functions as a mitigation measure from the government in entering a year full of uncertainty. Apart from that, economic growth in Indonesia must also be supported by regulations that form the basis, such as the Job Creation Perppu itself.

)* The author is a contributor to Persada Institute

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