The wave of protests from community elements, workers, students, academics and activists against the legalization of the ‘Omnibus Law on Job Creation Bill’, is entering its peak on October 8, 2020. The omnibus law demonstration was not only held in Jakarta, but also in major cities across the country.
The masses across the region expressed disappointment by calling for a ‘motion of no confidence’ against the central government and the Indonesian Parliement (DPR) for betraying the people by issuing regulations that were more beneficial to entrepreneurs and investors, but not for the people and the working class.
Crowds from various regions expressed their disbelief in the parliament and Joko Widodo’s administration for the legalization of the Omnibus Law. Demonstrators rallied since the ratification of the Omnibus Law on Job Creation Bill, Monday (5/10), and stated that they demanded the state to revoke the regulation which was considered to be tormenting to the people.
The question is, who benefits and loses? Why is it that the Job Creation Bill (according to the government) which is projected for the development of the people’s livelihood will result in massive protest?
Pros
The bill aims to loosen up Indonesia’s complex business, labor, and environmental legal network in an effort to attract investment and boost the economy. In an interview, President Joko Widodo told the BBC the law was about opening up the economy to more foreign investment.
“We want to simplify the [process] licensing and bureaucracy, we want speed, so we need legal harmonization to create fast services, fast policy making, so that Indonesia can respond more quickly to any changes in the world,” he said. Indonesia’s economy shrank 5.3% in the second quarter of this year. Meanwhile, Vietnam, which reported economic growth during April-June 2020, amounted to 0.36%.
The bill makes significant changes to Indonesia’s labor regulations. This removes the sectoral minimum wage, supporting the minimum set by regional governors. This will reduce severance pay to a maximum of 19 months of salary, depending on how long the employee has been in service. Previously, the maximum salary was 32 months.
However, the new government fund will provide an additional six months of wages for the new unemployed. The allowed overtime will be added a maximum of four hours in one day and 18 hours a week. Businesses will only be required to give workers one day off a week, not two.
Outsourcing restrictions have also been reduced, as have restrictions on the jobs in which expats can work. The law also relaxed environmental standards, only forcing businesses to submit environmental impact assessments if their project was deemed high risk.
The bill is expected to create nearly three million jobs for young people who have started looking for work and the six million people unemployed due to the Covid-19 pandemic. Although Indonesia’s ranking in the World Bank’s Ease of Doing Business index has improved significantly in the past five years, Indonesia’s ranking has remained stagnant at 73 in 2019, lagging behind Vietnam, which is ranked 70th.
Cons
The Omnibus Law was drafted and discussed in a hurry, the drafts were “kept secret”, and forced to be included in the national legislation priority program (Prolegnas) and the DPR plenary session. The authorities seems unable to stop the stench of capital interest facilitated by the Omnibus Law. The pretext of simplifying, streamlining, and eliminating overlapping regulations and addressing investment constraints is a reflection of the government’s compliance with free market power or neoliberalism.
Since the Keynesian policy was unable to overcome the economic impasse. Neoliberalism was introduced as an alternative, answered the challenges of the recession of the 1980s, and until now it has become the dominant political economy idea and movement. There are several proposals to be put forward, such as securing state intervention on the market, protecting and guaranteeing private property rights, national security and defense, enforcement of contract-based laws in order to allow the market to take advantage of accumulation.
This view clearly exposes a paradox. On the one hand, the promise of prosperity is inversely related to neoliberal policies that facilitate the institutional framework for the sake of accumulation. The reality of the widening gap between “rich” and “poor” is the logical implication of the savage of accumulation which allows the concentration of capital to occur in the hands of a few. Regardless of the market as the most effective and efficient entity, the market has no commitment to socio-ecological problems.
The plan for setting hourly wages and minimum wages leaves at least two problems. First, workers have the potential to receive a reduction in wages if they work not according to the time set by the company. Demands for producing commodities in a certain amount during a certain period of time are squeezed by the disappearance of several leave permits which have the potential to decrease labor productivity. Second, the minimum wage in the global sweep regulation does not reach workers in the informal sector. This issue reflects the way in which the authorities negate the interest of the working class.
This Omnibus Law systematically weakens the working class. There is no room for workers to raise their bargaining position. This is exacerbated by the presence of workers, who have not yet been absorbed by the industry, lining up for work when the industry needs them. This dire condition was ignored by the government at the expense of the interests of the working class through cheap wages and long working hours, solely to satisfy the appetites of investors and oligarchs.
Currently there are still 1% of Indonesians who control 50% of national assets or if it is increased, there are still 10% of Indonesians who control 70% of the national wealth so that the remaining 30% of assets are captured by 90% of the Indonesian people.The history of human society attests to this. Freedom without equality for those who love and equality without freedom is impossible, as well as a justification for slavery.
The promises of welfare echoed by neoliberalism have almost never been realized. The opposite is true: the worsening inequality between “rich” and “poor”. Since the neoliberalism experiment was first carried out by the Soeharto’s administration during the New Order regime and continued in the Reformation Order, welfare has only been a “neoliberal utopia.”
What should be underlined is that the Omnibus Law is also destroying the collective solidarity of the working class. As reflected in the attitude of the working class in responding to this policy, there are parties who firmly reject it and some are still open to compromises. Although the fragmentation of the working class is nothing new, the existence of the Omnibus Law has only made it worse.
The government’s ambition to smooth out investments is at the expense of humans and the environment. The layered oppression experienced by the working class is exacerbated by allowing corporations to exploit nature in such a way only for profit in the hope that national economic growth statistics can improve. The utopia of the free market which is believed by those who benefit materially as well as those whose existence is legitimized by this understanding has forced them to become slaves who always serve the power of the free market that promises profit.
And lastly, the Omnibus Law is an irrationality of capital justice that politicians and state officials try to rationalize in such a way that the abnormal situation (oppression) experienced by workers as a result of the policy is neutralized into something normal.
