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Integrating skills development into job creation bill
While postponing the deliberation provides room to revise the bill, skills development remains a crucial issue that the bill must address.
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Workers march on the street in front of the House of Representatives (DPR) complex in Central Jakarta to protest against the omnibus bill on job creation on Jan 13. (JP/Seto Wardhana)
P
resident Joko “Jokowi” Widodo has delayed the deliberation of the job creation omnibus bill just a week before labor groups were gearing up to mark the International Labor Day in a nationwide rally on Thursday to protest the draft law.
Labor unions view the bill as a regulatory framework that facilitates “easy hiring and firing ”. They have argued that it provides a red carpet to massive investment at the expense of workers’ protection. This absence of protection for workers’ rights is evident in the lax minimum wage mechanism and the increased flexibility for termination and outsourcing. The labor unions have also claimed that, as key stakeholders in the bill, they had been left behind in the drafting process.
The unions welcomed the postponement of the House of Representatives' deliberation of the bill, but employers regretted the decision. They said that the debate was even more pressing in anticipation of mass layoffs as an adverse impact of the COVID-19 pandemic.
Employers have also insisted that the House maintain labor issues as an integral part of the bill when it resumes deliberation.
Businesses have long complained about the existing Manpower Law, which they say is too rigid and has generated an unfavorable investment climate. They say the rigid law has restricted them from expanding their markets, increasing productivity and ensuring the profitability and sustainability of their businesses, particularly for their small and medium enterprise partners.
The bill is part of the government agenda for Jokowi to fulfill his campaign promises, particularly his aim to give a big push to Indonesia’s economic growth, which has stagnated at no more than 5.2 percent in the last five years. The health crisis is expected to significantly slash Indonesian growth, with the Economist Intelligence Unit projecting growth of only 1 percent.
The job creation bill was tipped to help Indonesia reap the benefits of its demographic bonus in the next decade. The bill is viewed as a “now or never” policy that the country needs to avoid the middle-income trap and leap toward a high-income economy.
