The Jakarta Post
President Joko “Jokowi” Widodo addressed on Wednesday 50 global business leaders in a virtual dialogue held by the World Economic Forum, in which he promoted the Job Creation Law and explained the government’s response to the coronavirus pandemic.
The President stressed that the omnibus law would help improve the country’s investment climate and legal certainty and reiterated the government’s commitment to engage in more public-private partnerships that could support the country to build a “sustainable and resilient economic recovery”.
“Significant support from the business community in [the law’s] implementation is essential, as it will add value to the government’s efforts in handling the pandemic and support economic recovery in a balanced and synergetic manner,” he said in his opening remarks as quoted by the WEF.
State-Owned Enterprises (SOEs) Minister Erick Thohir, Foreign Minister Retno Marsudi and Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan accompanied Jokowi during the online meeting.
The omnibus law came as Southeast Asia’s largest economy plunged into recession for the first time since the 1998 Asian financial crisis while the government struggled to contain the pandemic and its economic fallout. The government expects the far-reaching law, which deletes and amends thousands of provisions in around 80 laws, to cut bureaucratic red tape, ease the license procurement process and relax labor regulations, among other things, and eventually attract investment and create more jobs.
The economy shrank 3.49 percent in the third quarter, after recording 5.32 percent contraction in the second quarter. The government expects the economy to contract by 0.6 to 1.7 percent this year as the pandemic hit economic activity hard.
At the same time, the coronavirus infection in the country is not slowing down. Indonesia reached a grim milestone on Monday as the country surpassed more than half a million coronavirus cases. The country recorded more than 511,000 infections and 16,225 deaths as of Wednesday, the highest number in Southeast Asia, official data show.
The President emphasized measures the government would be taking to manage the spread of COVID-19, the WEF said in a statement. The focus is on providing treatment and ultimately vaccinations for the population, while also cutting red tape to fast-track needed investment aimed at restoring Indonesia’s growth and securing its competitiveness post-pandemic.
“Indonesia, with its large population, is making impressive progress in fighting COVID-19, and at the same time is using this pandemic as a means to restructure, modernize and upgrade its economy,” WEF founder and executive chairman Klaus Schwab said in the same statement.
“I appreciate the government’s efforts to encourage investment, maintain sustainability at the center of their rebuilding efforts and clearly communicate their ambition to work together with different stakeholders to create new and innovative ways to foster growth,” Coca Cola Company CEO James Quincey added.
The Investment Coordinating Board (BKPM) reported Rp 106.1 trillion (US$7.21 billion) in realized foreign direct investment in the third quarter, a 1 percent increase from the same quarter a year earlier. The agency reported 9.2 and 6.9 percent year-on-year (yoy) declines in realized foreign investment in the first and second quarters, respectively. It expects to record Rp 817.2 trillion in total investment realization this year.
Despite the government’s high hopes, the omnibus law has drawn criticism from labor unions, environmentalists, students and other civil society groups, who say the law will undermine workers’ rights and weaken environmental protection. They also criticized the lack of transparency and discussions in the law’s swift deliberations.
The government, meanwhile, denied the notion that the law would compromise environmental protection or harm workers, saying the law was crucial to attract investment to ultimately create jobs.
It is also under fire over its efforts to contain the pandemic, with critics urging the government to effectively control the coronavirus spread.