Indonesia parliament passes flagship jobs bill, critics vow protests

• Indonesia’s parliament passed into law President Joko Widodo’s flagship “Job Creation” bill that aims to boost investment in Southeast Asia’s biggest economy, but critics ranging from unions to environmental groups pledged protests.
• The rule changes will also make it easier for companies to secure permits and ease foreign-ownership requirements, while the government plans to set up an unemployment fund.
• 7 parties backed the bill, while two voted against the legislation that the government says is needed to streamline complicated regulations hampering business and investment.
• Global investors have been watching closely the bill’s progress, particularly regarding controversial changes proposed to the 2003 labour law, citing a need for Indonesia to compete better for manufacturing relocating from China.
• The new law would ensure the “state’s presence” in the relationship between employers and workers, Airlangga Hartarto, chief economics minister, told parliament on Monday.
• The bill will cut mandatory severance benefits paid by employers to 19 times monthly wages from 32 times now, in line with government proposals, a draft seen by Reuters showed. The state will also pay six months worth of wages to the person concerned.
• Indonesia’s stocks and currency rallied. The benchmark stock index and the rupiah gained as much as 1.3% each.

External Link : https://www.reuters.com/article/indonesia-economy-law/update-1-indonesia-parliament-to-vote-on-flagship-jobs-bill-police-bar-protest-idUKL4N2GW1I2

External Link : https://www.bloomberg.com/news/articles/2020-10-06/indonesia-s-markets-rally-on-move-to-simplify-labor-regulations