Economy: The plenary session of Indonesian parliament approved the controversial “Job Creation” bill. Previously, in a hearing on Saturday, which ended a few hours before midnight, representatives from seven out of nine factions in the legislation committee approved the bill to be brought to a parliamentary vote, while two factions rejected. The so-called “omnibus” bill, aimed at revising over 70 existing laws in a single vote, is the president’s flagship measure to speed up the pace of economic reform and improve the country’s investment climate.
A coalition of fifteen activist groups, including several trade unions, condemned the move in a statement on Sunday, accusing the government and parliamentarians of completing the deliberations in secret during an unusual hearing late at night over a weekend. The coalition called on all workers to join their planned national strike to protest the bill, which organizers had said would involve 5 million workers. Workers opposing the bill argued the legislation would be a “red carpet for investors, widening the power of the oligarchy” by not only hurting labor protection, but also taking away lands from farmers and indigenous communities. Unions will stick to their plan to hold a three-day national rally from Oct. 6 that is expected to draw about 2 million workers. Workers are opposed to the bill’s call for a reduction in severance pay to 25 months of wages from 32 months and the introduction of indefinite labor contracts.
Trade: Indonesia wants the next World Trade Organization (WTO) director-general to uphold the multilateral trade system, support developing countries’ interests and be able to handle the United States-China trade war. The country’s ambassador to the Geneva-based trade body, said on Tuesday last week that the candidate should also be willing to maintain consensus-based decision-making in the organization amid some members’ concerns that the technique limited the organization’s decisiveness.
The new WTO chief should seek closer coordination with other international organizations to address the COVID-19 pandemic, which had led to export restrictions, a global trade contraction, food insecurity and disruptions in the global value chain. A director-general who could nudge the United States and China toward the negotiation table would be helpful to Indonesia because the country depends on trade with the world’s two biggest economies. “This is perhaps the most difficult, especially for developing countries, based on how we feel. When the US proposes something, China rejects it. It is hard for us to choose a position in the middle,” said the Ambassador.
Business: The Indonesian government has announced a reformed National Logistics Ecosystem (NLE) recently which was expected to ease the country’s business community of logistics management. Finance Minister announced that the government is developing the reformed NLE to simplify the upstream to downstream process to cut the logistics cost from 23.5 percent to 17 percent of the gross domestic product (GDP). The cost could be saved among others from the delivery order process and the issuance of letters for containers, she noted, citing that these services were previously open from Monday to Friday at 9 a.m. to 3 p.m. local time, and now they are open all day online. The minister expected such a way of operation would save the logistics cost by 402 billion rupiahs (some 27.06 million U.S. dollars) per year and cut the time by 91 percent.
Logistics companies said that the improvement in the national logistics ecosystem would accelerate cargo traffics as the government has made the business process in the new system easier. The effort to shorten the long logistics business process would make a new history in the logistics ecosystem. The logistics cost in Indonesia is higher than that of other economies in Southeast Asia, according to the minister. With the reforms, the transporting and loading-unloading process which previously underwent duplications in seven institutions would now take place under a single submission system, and this would save about US$4.03 million per annum and cut the time by 74 percent. The logistics sector would then increase not only in efficiency but also its contribution to improving the competitive edge of the whole national economics.