President: Cipta Kerja Law for Structural Reform and Accelerate Economic Transformation

The Indonesia Post – President Joko Widodo this morning chaired a closed meeting with his staff to discuss the Job Creation / Cipta Kerja Law (UU). The President emphasized that in general the Job Creation Law aims to carry out structural reforms and accelerate economic transformation.

“This morning I chaired a virtual limited meeting on the Job Creation Law with government officials and governors. In the Law there are 11 clusters which generally aim to carry out structural reforms and accelerate economic transformation, “said the President in an official statement at the Bogor Presidential Palace, West Java, on Friday, October 9, 2020.

The eleven clusters are matters of simplification of licensing, matters of investment requirements, manpower affairs, matters of land acquisition, business convenience, affairs of research and innovation support, government administration affairs, matters of imposition of sanctions, matters of convenience, empowerment, and protection of MSMEs, matters of investment and government projects, as well as economic area affairs.

The Head of State also explained that the Job Creation Law was drafted to meet the urgent need for new jobs. According to him, every year around 2.9 million people of new working age enter the labor market. Especially in the midst of a pandemic, there are approximately 6.9 million unemployed and 3.5 million workers affected by the Covid-19 pandemic.

“As many as 87 percent of the total working population, have a high school level education level and below, of which 39 percent have primary school education, so it is necessary to encourage the creation of new jobs, especially in labor-intensive sectors. So the Job Creation Law aims to provide as many jobs as possible for job seekers and unemployed people, “he said.

However, the President saw a demonstration against the Job Creation Law, which was basically motivated by disinformation about the substance of this law and hoaxes on social media. Therefore, on this occasion the Head of State wishes to straighten out some of the disinformation.

The President took an example of the information that mentions the elimination of the UMP (Provincial Minimum Wage), UMK (Regency / City Minimum Wage), and UMSP (Provincial Sectoral Minimum Wage).

“This is not true, because the fact is that the Regional Minimum Wage (UMR) still exists,” said the President.

In addition, there are reports that the minimum wage is calculated per hour. The President firmly stated that this was also not true.

“There is no change with the current system, wages can be calculated based on time and based on results,” he added.

Likewise with the news stating that all leave, both sick leave, marriage leave, circumcision leave, baptism leave, death leave, maternity leave, are removed and there is no compensation. The President once again confirmed that the news was untrue and stated that the right to leave remains.

“Then, can the company unilaterally lay off any workers at any time? Not true. The truth is, companies cannot unilaterally lay off employees. Then also the question about whether social security and other welfare are missing? The truth is social security still exists, “he explained.

In addition, the President also dismissed reports that the Job Creation Law was encouraging the commercialization of education. According to him, what is regulated in the education cluster the Job Creation Law is only formal education in the Special Economic Zones (KEK).

“Meanwhile, education licensing is not regulated in this Job Creation Law, let alone licensing for education in Islamic boarding schools, it is not regulated at all in this Law (Job Creation), and the existing rules remain in effect,” he said.

Regarding the existence of a land bank, the Head of State explained that the land bank was needed to guarantee public interests, social interests, national development interests, economic equality, and land consolidation, as well as agrarian reform.

“This is very important to ensure public access to land ownership, and so far we do not have a land bank,” he said. (mhn/bbs)


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