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Indonesian Parliament Ratifies Controversial Regulation on Jobs to Ease Foreign Investment

© AP Photo / Dita AlangkaraIndonesian President Joko Widodo, center, smiles as he speaks to the media upon arrival after his inauguration for his second term, at Merdeka Palace in Jakarta, Indonesia, Sunday, Oct. 20, 2019.
Indonesian President Joko Widodo, center, smiles as he speaks to the media upon arrival after his inauguration for his second term, at Merdeka Palace in Jakarta, Indonesia, Sunday, Oct. 20, 2019. - Sputnik India, 1920, 21.03.2023
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Indonesia is Southeast Asia's fastest-growing economy. Last year, the country grew at a rate of 5.31, hitting a nine-year peak and posting the best annual growth since 2013.
The Indonesian Parliament on Tuesday ratified a controversial decree into law that would help the democratic Muslim-majority nation streamline business rules, including with regards to jobs and investment.

The law replaces the original Job Creation Law introduced by Indonesian President Joko Widodo in 2020, which was declared unconstitutional by a Constitutional Court in November 2021.

Under the new regulation, which passed in parliament this week, the government has revised 70 of the country's previous laws.

What Does the New Law Stipulate?

The law introduces a new structure of minimum salary, slashes severance benefits, and excludes some paid leaves which were earlier mandatory for organizations to give to employees.
It also relaxes rules related to environmental clearance for opening new businesses.
The government stated that the regulation aims to lure foreign investors, ease business licensing expenses and create more employment in the Southeast Asian country.
However, two opposition parties, the Democratic Party and the Prosperous Justice Party, called the legislation "flawed".
Prosperous Justice Party parliamentarian Amin Akram opined that there was no need to introduce such a law, especially when Indonesia's economic growth has been witnessing an upward trajectory.
"Indonesia's economy grew by 5.72 percent in the third quarter, with a growth trend above 5 percent. Indonesia is even seen as a relatively safe country from the threat of recession," Amin stated in parliament.
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