APSN Banner

Omnibus Law rejection could drive away investors, says observer

Tempo - October 8, 2020

Caesar Akbar, Jakarta – An economic observer from the Institute for Development of Economics and Finance (Indef), Ahmad Heri Firdaus, opined that the strong objection voiced by people to the Job Creation Omnibus Law which led to mass strike would make investors reevaluate plans to enter Indonesia.

"They see workers hold a rally and a strike and think if they enter Indonesia, they will incur losses. So this condition is not an incentive but rather a disincentive," said Ahmad to Tempo on Wednesday, October 7, 2020.

Heri argued a regulation should be implemented based on common aspirations. Yet many rejections to the newly-passed regulation showed that its substance was not yet solid as it had not accommodated the interests of workers, for example.

"This surely will be detrimental for entrepreneurs, industry, and the government, as well as workers who may lose their income for staging a demonstration," Heri added.

An economist from the University of Indonesia Fithra Faisal conveyed similar statements. According to him, the government's motivation to draft the policy was quite positive, and Indonesia needed it as a supporting basis for future industrial production.

However, public participation was not involved in the drafting so it resulted in protests voiced by all elements, including global investors.

As many as 36 global investors managing US$4.1 trillion in assets reportedly expressed their concerns that the law could pose risk to the country's tropical forests.

Fithra said the government must address this condition. He acknowledged that the government could not satisfy all parties in making policy. However, they could at least be able to create a consensus that would be carried out by all stakeholders.

Source: https://en.tempo.co/read/1393980/omnibus-law-rejection-could-drive-away-investors-says-observer