Observers Call Job Creation Perppu Issuance In Order To Maintain Investment

Illustration (Photo: Doc. Antara)

JAKARTA - Economic observer from the University of Indonesia (UI) Fithra Faisal said the issuance of Government Regulation in Lieu of Law (Perppu) Number 2 of 2022 concerning Job Creation is the right step to maintain positive investment momentum.

He said that Indonesia is enjoying the momentum of post-pandemic recovery which is expected to continue until 2023, so it is necessary to maintain this trend with the support of legal certainty.

"One of them is the legal umbrella so that this investment can be more sustainable in Indonesia through Perppu," Fithra said as quoted by Antara, Monday, January 10.

From an economic perspective, continued Fithra, the issuance of the Job Creation Perppu is appropriate because Indonesia cannot delay existing opportunities.

He is worried that after the Job Creation Law is declared unconstitutional, there will be loopholes regarding legal certainty for investors.

Moreover, the Constitutional Court (MK) ordered improvements within a maximum period of 2 years from the time the decision was issued in 2021.

"It's like better to accept it now than to delay because when we postpone it, there is an opportunity cost. There could be a divested investment (transferment of investment) to other places," he said.

On the other hand, the issuance of the Job Creation Perppu is also considered an anti-shock so that when the industry is volatile, the condition of employment can be more adaptive.

"So the consideration was earlier, how to guarantee, keep investment at least stay (there), to maintain investor confidence and also maintain existing investments so as not to go out to other places, and secondly, is how our industry is more volatile," he said.

However, Fithra believes that Indonesia's probability of a potential recession is still relatively small.

He said the current and post-COVID-19 crisis occurred due to policies made by developed countries to slow global demand due to declining supply due to mobility restrictions.

This condition is still continuing in a number of developed countries, much different from Indonesia's, with domestic demand which is still quite high.

Furthermore, Fithra assessed, although there are waiting and see factors for investors, especially in the current political year, the Employment Creation Perppu is considered as well as an anticipatory step in the future.

"When we postpone it even longer, the opportunity costs are also getting higher because we are also competing with other ASEAN countries to get investment because we are not only delegated to production input but also other ASEAN countries that have legal infrastructure, physical and excess human resources," he concluded.