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New rule replacing jobs law will spur healthy investment, experts say
The issuance of a government regulation in lieu of law (Perppu) on job creation will convey positive impacts on economic activities this year, experts say, as it can act as a catalyst to improve Indonesian business climate which eventually leads to a healthier investment growth.
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Protesters hold banners during a protest against Job Creation Law, or omnibus law, at Jl. Medan Merdeka Barat in Central Jakarta on Oct. 28, 2020. The banner reads, 'Revoke the omnibus law for our children and grandchildren'. (Antara/Hafidz Mubarak A.)
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he issuance of a government regulation in lieu of law (Perppu) on job creation will have positive impacts on economic activities this year, experts say, as it can act as a catalyst to improve the Indonesian business climate, which eventually leads to healthier investment growth.
The government officially released the Government Regulation in Lieu of Law Number 2/2022 concerning Job Creation (Perppu Cipta Kerja), which was signed by President Joko “Jokowi” Widodo and promulgated on Dec. 30 in accordance with the Constitutional Court (MK) Decision Number 138/2009.
Piter Abdullah, senior economist and executive director at the Segara Research Institute, considered the issuance of such an “emergency regulation” was actually aimed at encouraging investment in the near future.
In 2021, he said, the Constitutional Court (MK) had ruled that the passage of Law Number 11/2020 regarding Job Creation was flawed due to inadequate public consultations, causing it to not be fully implemented effectively.
“As a result, there are investors’ doubts on Job Creation Law following the [MK’s] decision. So, this ‘Perppu’ is meant to dispel these doubts as well as encourage investment," he told The Jakarta Post, on Sunday.
Piter continued that, with the issuance of the emergency regulation, the government had fulfilled the requirements of the Constitutional Court to improve the Job Creation Law, therefore he said: "The government's next task is to pass this Perppu as a law."
The Perppu was also hailed by workers' unions, who urged that the Job Creation Law be immediately annulled due to its negative impact on workers' welfare, particularly as a result of several rules stipulated in the Employment Cluster of the omnibus law.
