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Job Creation Law should continue under new government: Economist

Jakarta Globe - March 27, 2024

Arnoldus Kristianus, Jakarta – The job creation law, which harmonizes dozens of regulations concerning investments, takes years for its full and ideal implementation and therefore must be carried on by the new government, a senior economist said on Wednesday.

President Joko "Jokowi" Widodo is set to end his tenure in October and Defense Minister Prabowo Subianto has been announced as the winner of the Feb. 14 presidential election.

While Prabowo has repeatedly confirmed that he will continue Jokowi's legacy, economist Raden Pardede underlined the necessity of a specific assurance that the job creation law won't be repealed.

"This law needs consistency until maybe the next five years. It must be adopted by whoever leads the future government," Raden said during the Investor Daily Roundtable in Jakarta.

The job creation law requires continuous adjustments and improvements because the central and regional governments as well as ministries will keep issuing new regulations that potentially overlap with the law, Raden said.

"To make the law effective, it must be consistently evaluated until the next five or 10 years," Raden said.

The so-called omnibus law aims to simplify regulations to boost investment flows and create new job opportunities while eliminating conflicting investment clauses that typically occurred among different ministries in the past.

Efforts to harmonize regulations should also involve the Justice Ministry and the State Secretariat, Raden said.

"We have been involved since the initial drafting of the law but we need support from the Justice Ministry and the State Secretariat to check consistencies between government regulations," he said.

The omnibus law was initiated in 2019 when President Jokowi began his second term. It was enacted by the House of Representatives on Oct. 5, 2020, but the Constitutional Court froze its implementation and ordered revisions following protests from labor unions.

The government responded by issuing a regulation in lieu of the omnibus law signed by the president on Dec. 20, 2022, and approved by the House last year.

Source: https://jakartaglobe.id/business/job-creation-law-should-continue-under-new-government-economis