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View all search resultsUS businesses cautiously optimistic, look to coming regulations for jobs law
While the overall mood regarding the Job Creation Law is positive, the general consensus appears to be that any effects on job and economic growth will take time and hinge on the forthcoming regulations.
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An aerial photograph shows an industrial zone in an unidentified location in this undated stock image. (Shutterstock/Aeraw)
A
merican businesses are pinning their hopes for a better investment environment in Indonesia on the newly passed Omnibus Law on Job Creation, although they expect it will take some time before the country sees any effects from the law.
The Job Creation Law was seen as the Joko Widodo administration’s effort to open up the Indonesian economy so it can better compete with neighboring countries like Vietnam, said James Castle, a board member at the American Chamber of Commerce in Indonesia (AmCham Indonesia) and founder of the Jakarta-based consultancy, CastleAsia.
“The omnibus [law] is huge. I think we will not see the real effects for a year or two, but given all the changes, it will help very much in the operating environment,” Castle said at a virtual event on Tuesday.
“We will see a much more positive environment, and this will encourage more American investors and more investors from other areas” to invest in Indonesia, he said.
The House of Representatives on Oct. 5 passed the new law, which combines thousands of revised provisions from around 80 laws and covers a variety of sectors. It is intended to cut bureaucratic red tape and simplify business licensing, primarily to attract investment and create jobs.
The law also opens up almost all business sectors to foreign investors excepting six restricted sectors, such as narcotics and gambling, as well as several environment-related sectors like harvesting endangered fish and coral. It also excludes business activities restricted to the central government.
