Do You Want The Economy To Move In 2021? Airlangga Hartarto: The Keys Are Vaccines And The Job Creation Law

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Irfan Meidianto / VOI)

JAKARTA - The COVID-19 vaccine and the Omnibus Law of the Job Creation Law are projected to be the key to driving the market in 2021. As is known, the COVID-19 pandemic will not only have an impact on health, but also on the economy, and make public confidence in social and economic activities decrease. .

Coordinating Minister for Economic Affairs Airlangga Hartarto said health problems were the main factor where people's trust in carrying out activities (social and economic) decreased, so the game-changer was vaccination.

According to Airlangga, vaccination will solve two problems at once, health and public trust to return to activities and social activities.

"With the presence of 1.2 million doses of vaccine in Indonesia (one of the first countries in ASEAN to receive the vaccine), it gives hope and trust to the public, because the government has managed to gain access to vaccines that have been initiated since the beginning of the pandemic in March 2020," he said. , in his official statement, quoted Thursday 10 December.

Not only preparing for vaccinations, but also structural reforms through the Omibus Law on the Job Creation Law. The government believes that this sweeping law is an accelerator of Indonesia's economic growth, one of which is primarily aimed at encouraging job creation through providing business and investment facilities.

"Job creation is very urgent to do, because 70 million of the 130 million workforce in Indonesia still work in the informal sector. Moreover, Indonesia has the potential for a demographic bonus in the next 10 to 15 years, so increasing investment is very important for job creation," he said.

Market players believe that the implementation of the Job Creation Law will provide many conveniences for doing business and certainty in investment management up to the local government level. Currently, the drafting of implementing regulations of the Law is continuously being carried out by opening the participation of the public and stakeholders as widely as possible.

Furthermore, Airlangga said that strong coordination support between the parliament and the government was also the key to the successful implementation of the Job Creation Law.

The former Minister of Industry said that with the COVID-19 vaccine and the Job Creation Law, the government is optimistic that the economy in 2021 will be much better than this year. This is also in line with the prediction from JP Morgan regarding the Indonesian economy in the next year.

JP Morgan estimates that Indonesia's economy will grow by 4 percent in 2021. This growth is supported by consumption of 2.2 percent, investment of 1.2 percent, and net exports of 0.7 percent.

Not only that, JP Morgan also projects that the flow of foreign funds will return to Indonesia driven by positive sentiment, namely the development of vaccines as a key market driver, and the passage of the Job Creation Law as the biggest policy reform since 1998, which aims to encourage Foreign Direct Investment (FDI). ) and Indonesia's transformation towards a manufacturing country in Asia and a technology hub.

"The government appreciates the optimism of the Indonesian economy in 2021 as released by JP Morgan," he said.

In addition, JP Morgan also projects that the Indonesian stock market will continue to grow positively, driven by the recovering economic activity, supported by government stimulus and the implementation of the Job Creation Law.

Push Sector

Several sectors predicted to be the key to economic recovery are the financial sector, infrastructure or industry, and corporations based on the digital economy as medium-term catalysts. Indonesia is believed to be experiencing a digital economy and technology-based corporate boom in the future.

Indonesia's internet economy currently has a capacity of 50 billion US dollars comprising 5 percent of GDP and more than 10 percent of stock market capitalization, which has one of the fastest growing in the world. Currently, Indonesia is the home of 5 unicorns, namely Gojek, Tokopedia, Bukalapak, Traveloka, and OVO which are believed to be the catalyst for investment as the new economy.

Airlangga said that the Indonesian government is also preparing an Investment Management Institution, namely the Sovereign Wealth Fund (SWF), which is believed to be an alternative financing for infrastructure project development.

"Currently, the Government is finalizing 3 RPPs related to SWF, namely the Investment Management Institution (LPI) RPP, the LPI Initial Capital RPP and the LPI Tax Treatment RPP. LPI will manage the investment, so that it will increase and optimize the investment value that is managed in the long term, in the context of support sustainable development, "he said.