The Omnibus Law On The Job Creation Law Is Claimed To Be The Driving Force For Increased Investment Realization In Indonesia

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - Based on a report by the Investment Coordinating Board (BKPM), investment realization in Indonesia throughout 2020 has increased significantly, even exceeding the target set by the government.

Initially, the government targeted investment realization of Rp. 817.2 trillion, but there was an increase of Rp. 9 trillion from the target to Rp. 826.3 trillion.

The Head of BKPM Bahlil Lahadalia explained that the controversial Omnibus Law policy on Job Creation Act Number 11 of 2020 has triggered the increase in the investment climate in Indonesia.

"This is quite a positive influence on the sustainability of foreign investors in Indonesia," Bahlil explained in an online press conference, Monday, January 25.

So to what extent is the role of the Omnibus Law in investment realization? Reported by VOI from the official website of Phillip Sekuritas Indonesia (Poems), the important point of the Omnibus Law is investment growth in the real sector to drive the country's economy.

Before the Omnibus Law policy, Poems noted that the realization of Foreign Investment (PMA) and Domestic Investment (PMDN) had grown every year.

However, even though FDI is growing, compared to the Gross Domestic Product (GDP) it still has a relatively small percentage.

FDI in Indonesia since 1975 is known to have not been able to penetrate 3 percent of total GDP. For example, FDI in 2019 is still 2.2 percent of GDP. When compared to countries in Southeast Asia, Indonesia is still lagging behind.

Thus, the presence of the Omnibus Law which offers the convenience of investing in Indonesia, is a new hope for an increase in FDI which will affect investment realization.

In real terms, the increase in foreign investment in Indonesia will have a direct effect on new jobs. Then at the macro level, it is hoped that Indonesia can produce exported goods more massively so that they can compete with other countries.