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Jakarta Post

Experts call for labor, bureaucracy reforms to boost investment growth

  • Marchio Irfan Gorbiano and Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Wed, November 6, 2019   /  10:50 am
The Jakarta Post Image
A worker takes a picture of buildings in Sudirman area, Jakarta, on Oct. 25, 2017. Indonesia’s economic growth dropped to 5.02 percent year-on-year (yoy) in the third quarter, the lowest level in more than two years, with investment failing to contribute to the economy due to a global economic slowdown.(JP/Wendra Ajistyatama)

Economists and businesspeople have urged the government to prioritize reforms in the bureaucracy and labor regulation in a bid to boost the country’s investment as recent data indicate its current initiatives are not enough to attract local and foreign investors. The macroeconomy and trade research head at the University of Indonesia's Institute for Economic and Social Research, Febrio Kacaribu, said the government should expedite structural reform by removing red tape and improving labor regulations. "There are too many restrictions and inefficiencies in regulations, the license procurement process and trading across borders […] The Labor Law is so rigid and costly that it has become one of the factors behind slowing [investment] growth,” Febrio told reporters in Jakarta on Monday, adding that the constant increase in the provincial minimum wage (UMP) a...