The Rector of UI Discusses the Job Creation Law in Berita Satu TV, CNN Indonesia, and Kompas TV
Nino Eka Putra ~ PR of FEB UI
DEPOK – (6/10/2020) Professor Ari Kuncoro, University Rector was present as a resource person in three television programs, namely Hot Economy News One TV, CNN Indonesia News Hour, and Rosi Kompas TV, giving his thoughts on the Omnibus Law.
The Coordinating Minister for the Economy, Airlangga Hartarto said the Omnibus Law must be able to provide benefits to all parties, especially for society. The Job Creation Law ensures protection for workers, as the state is present for certainty of severance pay through the job loss guarantee program. Meanwhile, business players will receive benefits such as convenience and certainty in obtaining business licenses. So what caused the rejection of the Job Creation Law? How to maximize the Job Creation Law to boost economic growth?
Hot Economy One TV News, “Dissecting the Job Creation Law” Tuesday, 6 October 2020
During the Hot Economy News One TV program, with the theme “Dissecting the Job Creation Law” Professor Ari Kuncoro with news presenter, Andra Lesmana, Tuesday (6/10/2020), said that the trade war and Covid-19 has made the National situation into an urgent one. The government and the DPR RI are accelerating the passage of the Job Creation Law. Given that, the world is changing very rapidly and the shifting of supply chains. This law aims to improve people’s welfare from the manufacturing side, as has been done by Cambodia and Vietnam. So, it is very urgent to ratify the Job Creation Bill, so as not to be left behind and to position us as equals to other countries and to be on the radar of world investors. Thus, the Job Creation Law provides employment for the new workforce.
According to Prof. Ari, one of the points in the Job Creation Law that is controversial is the provision of severance pay that is paid by the government for 6 months. This can ease the burden on the government, as the funds paid come from companies and individuals, similar to the so-called social safety net system insurance. “So, the thinking that must be changed for workers is to work not for severance pay but to earn wages/salaries. This is a change of mind, we should not focus on severance pay, but focus on creating jobs. In addition, it is easy for foreign workers to work in Indonesia under the Job Creation Law as a cultural connectivity at the global level, making it easier for Indonesia to export to other countries.” Prof. Ari said.
CNN Indonesia News Hour, “Job Creation Law Opens Opportunities for Investment and Exploitation” Wednesday, 7 October 2020
On Wednesday (7/10/2020) Professor Ari Kuncoro became a guest speaker at the CNN Indonesia News Hour, with the topic “The Job Creation Law Opens Investment and Exploitation Opportunities” with host Azizah Hanum. At the event, Prof. Ari said the investment coming into Indonesia was less than 8%, which made it difficult to open new jobs to reduce the number of unemployed. With the current US-China tensions, labor-intensive industries focus more on export competition. This is what Indonesia must think about in order to enter the world’s investment radar, because the opportunity is very large. For example, investing in the electronics industry opens MSMEs possibilities to enter in and work on raw material components. This is where the importance of investors comes in and new job opportunities are created.
Meanwhile, in overcoming environmental problems due to exploitation, the government has created a legal umbrella corridor to industry. In addition, in general, if someone has a job, it can make that person aware of protecting the environment. As in Chinese society, which was initially against the environment, has now become pro-environment, by switching to environmentally friendly transportation (bicycles, electric cars, etc.).
Rosi, Kompas TV “Job Creation, Solution or Problem?” on Thursday, October 8, 2020
The Rector of Universitas Indonesia, Professor Ari Kuncoro, was a guest speaker at the Rosi program, Kompas TV, discussing “Job Creation, Solutions or Problems?” with host Rosianna Silalahi, on Thursday (8/10/2020). Following is Ari’s view on the Job Creation Law.
Prof. Ari said, one of the interesting phenomena regarding the Indonesian economy in the past 20 years is the increasing number of the middle class, currently at 141 million. This increase was followed by growth in the manufacturing sector due to rising aspirations of middle-class consumption. Manufacturing grew by 22%, but then fell to 19%, but trade continued to develop. This indicates that industry in Indonesia is very expensive, it is cheaper to trade than to produce. Even if we have an industry, the raw materials are imported, because domestic production is expensive.
The key to the problem is Permits. MSMEs that want to develop into industries experience burdensome and convoluted permits. In addition, there is no linkage between production MSMEs and trade MSMEs, as well as with medium-sized industries and large industries. All are fragmented. This can be seen from our current account, which is always a deficit, and the trade balance, which has more deficits.
How then are we still going? Because of the capital inflow, foreigners have entered to buy our financial portfolios by relying on Indonesia’s expectations of continued growth, due to stable macro policies, stable inflation, and large markets. But this can be withdrawn at any time, so that we live in a fragile economy. Before Covid 19, this condition was still possible.
Now the phenomenon is a terrible one, namely the decoupling due to Covid and the decoupling due to the potential conflict between the US and China. Actual or cold war between these two countries can change the configuration of the supply chain in the world. This could be an opportunity, but it could also be a danger due to dependence on imported raw materials. If there is another actual war or cold war or pandemic, our systems could break down. Therefore, we need to be on guard with improving linkage, and the key is to improve licensing (high cost economy).
Covid has caused a change of times, and a change in world alliances. We must do extraordinary efforts that are out of the box. The world will continue, if Indonesia can be used as a market, it will be used. We need to look at the global context. If we are not ready, we will depend on one country and only serve as a market.
“But Indonesia has a population of 270 million. So, if something urgent happens we still have a fallback, namely a sovereign Indonesia, an Indonesia which has a large domestic market, a strong industry, and a better middle class. ” said Ari closing his session. (hjtp)
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