"Alhamdulillah, I profusely thank all Indonesian people and Allah SWT," Presidential spokesman Fadjroel Rachman stated after the signing.
Rachman affirmed that the Job Creation Law was for all Indonesians and the future of onward Indonesia.
The country's first omnibus law covers areas, including on improvement of the investment ecosystem and business activities; employment; protection and empowerment of cooperatives and UMKM; ease of doing business; national fiscal policy; and research and innovation support.
Widodo proposed the bill after being re-elected as Indonesia's president for the 2019-2024 term. At his swearing-in ceremony on October 20, 2019, the president had urged the Parliament to complete deliberations on the omnibus law within 100 days.
The government completed the draft of the omnibus bill on February 12, 2020. On October 5, 2020, the House of Representatives (DPR) had endorsed the Bill on Job Creation following deliberations since April 2, 2020.
The government claimed that all stakeholders in the country were involved in the drafting of the bill, including the Manpower Ministry, experts, businessmen, and labor union representatives.
However, following its Parliamentary approval, the law was rejected by several labor unions, activists, and university lecturers, who opined that it would be detrimental to the interests of workers and endanger the environment.
The president blamed disinformation and social media hoaxes for the widespread opposition to the Job Creation Law.
The head of state made assurance that the Job Creation Law will create jobs for 2.9 million youngsters joining Indonesia’s working age population annually.
Furthermore, it would generate employment for those who lost their jobs during the COVID-19 pandemic, he stated, adding that the health crisis had left 6.9 million people unemployed and 3.5 million workers affected.
Meanwhile, Presidential Chief of Staff Moeldoko is upbeat about the Job Creation Law improving the welfare of people, especially since the law has been hailed by several global-level institutions.
The new law will foster an investment climate and boost business competitiveness. In addition, the law may prove to be a potent tool to lead Indonesia to become a developed nation by 2045.
"Many countries are trapped in the middle-income trap because of several regulations that make it difficult for the business world (to grow). The Job Creation Law removes this barrier, so the economy will grow. Indonesia can escape from this trap," he remarked.
He also cited several international institutions, such as the World Bank, Asian Development Bank, Moody's, Fitch Ratings, and TMF Group that had welcomed the ratification of the Job Creation Law, expected to bolster recovery of the Indonesian economy.
“The fact that it has received praises from international institutions demonstrates to us (that we are) on the right path. I am optimistic that the Job Creation Law would make people happy and prosperous,” he stated.
The World Bank office in Indonesia, on its website, lauded the Omnibus Law on Job Creation as a major reform endeavor to make Indonesia more competitive and support the country’s long-term aspirations of a prosperous society. It is also touted to support resilient economic recovery and long-term growth in Indonesia.
In the meantime, the Job Creation Law is expected to particularly unveil opportunities for micro, small, and medium enterprises (MSMEs) to develop their businesses.
The government has, so far, offered various stimuli for MSMEs to keep the wheels of the economy in motion.
MSMEs is the backbone of the Indonesian economy since they absorb the largest workforce, or some 97 percent of Indonesia's total workers.
To further develop MSMEs, the Job Creation Law facilitates MSMEs in terms of licensing, business development, and access to finance and markets, Edy Priyono, a main expert staff of the Presidential Staff Office (KSP), remarked on Nov 4, 2020.
In line with the new law, business licenses can be obtained online through the Online Single Submission (OSS) system, and a cooperative can be set up with just nine people instead of 20, Priyono noted in a statement.
Furthermore, the government will bear the costs of halal certification for micro and small businesses. Moreover, Intellectual Property Rights (HKI) for UMKM products can be managed conveniently.
"That will be immensely helpful. From there, in my opinion, the aim is quite clear, specifically to reduce obstacles to start a business for MSME players," he stated.
In terms of business development, the official cited Articles 99 and 101 that specifically regulate business incubation for micro and small entrepreneurs.
"This business incubation can be conducted by the central and regional governments, business world, and community," he noted.
Access to finance for MSMEs is stipulated in Article 102 of the law that has become a basis for the government to provide alternative financing support for micro- and small-scale startups.
The same article also stipulates provisions on government support for MSMEs to access sources of partnership financing, grants from the government, revolving funds, and Corporate Social Responsibility (CSR) funds from the business world.
Furthermore, export-oriented MSMEs can receive customs incentives in accordance with the provisions of the Customs Regulations, and certain MSMEs can also receive Income Tax incentives in accordance with the provisions of the Legislation in the Income Tax Sector as regulated in articles 92, 93, and 94 of the Ciptaker Law.
In connection with market access, an article regulates market guarantees for UMKM products. This article stipulates that in the procurement of government goods and services, a minimum of 40 percent of domestic products should be derived from UMKM.
Moreover, provisions necessitate the government to facilitate the existence of partnerships between micro and small businesses and medium and large businesses in the supply chain.
Hence, the government had encouraged micro and small businesses to become suppliers for medium and large businesses through mutually beneficial partnerships.
Despite the benefits of the new law as highlighted by government officials, the Democrat Party faction in the House of Representatives (DPR), which along with the PKS have opposed the law, is considering at length various steps to propose the revision of the law.
Didik Mukrianto of the Democrat Party recently noted that the faction will prepare steps to file a legislative review in accordance with the procedures and mechanism set forth in the law.
Earlier, the president affirmed that those objecting to the law could file a judicial review in the Constitutional Court. Related news: Eight thousand personnel guard student rally against job creation law
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Editor: Rahmad Nasution
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