Airlangga Hartarto (JP/Valeria Halim)

President Joko “Jokowi” Widodo’s second-term administration is preparing an omnibus bill on job creation that will include provisions aimed at improving the country’s ease of doing business score to attract more investment.

A heavy flow of investment is expected to create more jobs in the country, which currently faces weakening investment growth.

The planned law, which would revise more than 70 prevailing laws, would put an emphasis on simplifying business licensing and investment processes in the country as part of a broader effort to improve competitiveness, said Coordinating Economic Minister Airlangga Hartarto after a limited Cabinet meeting in Jakarta on Monday.

“The government will encourage a shift in philosophy from a licensing-based approach to a risk-based approach,” he said at the Presidential Office on Monday. “This means that small and medium enterprises that carry no risks will only need to register their businesses without having to procure any license, while businesses that carry more risks will have to adhere to certain standards.”

The government would also ease the land acquisition process for national strategic projects by ensuring proper licenses are produced to allow investors to immediately realize their investment projects, he added.

Jokowi mentioned the plan to issue an omnibus law on job creation during his inauguration speech in October, saying dozens of laws that hampered job creation and the development of small and medium enterprises would be revised at the same time once the law is issued.

Around 50,000 employees have lost their jobs in the past year, Statistics Indonesia (BPS) data show, putting the country’s unemployment figure at 7.05 million in August.

The rise in unemployment came at a time when investment growth cooled, dragging down Indonesia’s economic growth. The growth of investment, which accounts for about a third of the country’s gross domestic product, plunged to 4.21 percent in the third quarter from 6.96 percent recorded in the same period last year.

The economy grew 5.02 percent in the third quarter, the slowest pace in more than two years.

Airlangga said the omnibus law would also streamline processes in which the central government cooperated with regional administrations by granting the President the authority to annul derivative regulations that conflicted with higher regulations.

The government had finished mapping out the omnibus bill, Airlangga said, adding that it set a target to include the bill in the National Legislation Program next year.

Speaking during the meeting, Jokowi expressed his desire to see deregulation come at a faster rate after learning about United States President Donald Trump’s deregulation agenda, which Secretary of Commerce Wilbur Ross shared with Jokowi.

“Recently, Secretary Ross told me that, if any minister wanted to issue a regulation, he or she needed to revoke two regulations,” Jokowi told his Cabinet members.

“We should be able to do that as well. For every regulation issued by a minister, they need to annul 40 ministerial regulations because we have too many ministerial regulations.”

The National Development Planning Agency's (Bappenas) deputy for population and manpower, Pungky Sumadi, separately said the upcoming omnibus law would emphasize swift job creation, touching not only on business licensing but also the overall investment climate and manpower regulations.

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Courting foreign investors and getting them to invest in the country and create more jobs is one of Jokowi’s priority agendas. The President said during his victory speech after this year's election that “no one should be allergic to investment”, particularly those that create jobs in the country.

The government has set a target to bring down the unemployment rate to between 4.8 and 5 percent in 2020 from the current 5.28 percent.

It pinned its hopes on several new programs, such as the preemployment card, which would facilitate skills training for first-time job seekers, recently unemployed people and workers who sought to upgrade their skills, Pungky said.

“Our first priority is to upgrade people’s skills through the preemployment card, as well as skills training at skills training centers, as we continue to make improvements to the vocational school curriculum,” the Bappenas official said.

BPS data has revealed there are more unemployed vocational school graduates than those of all other educational institutions.

University of Indonesia rector and economist Ari Kuncoro said creating more flexible labor regulation, particularly a revision on severance payments, was among the immediate priorities for the government should it hope to invite more investment.

Bringing in more investment would lead to more industries being developed in the country, eventually resulting in an improved supply chain, he said.

“[An improved] supply chain will also improve overall productivity because [the industries] would become more efficient."

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