It is the first major political challenge of 2020. Can overriding laws deemed essential for the economy be passed by the new Indonesian House of Representatives (DPR) within one hundred days?
As you read this the deadline is dashing closer, and novice legislators should be buying eye drops and caffeine pills to cope with the reading needed to understand a job few expected when they stood for election last April.
Sadly there’s no indication yet that the politicians have grasped the enormity of the task given them by President Joko Widodo. Maybe there will be a sudden awakening and we will all become familiar with the new Jakarta bizterm – Omnibus Bill.
It sounds like a matey name for a tour coach driver, but if this vehicle can steer around the obstacles left by lawmakers long gone, then foreign investors might start to look for space to park their money.
The president and his advisors have said there are 1,244 articles in 79 statutes (although other figures are being canvassed) ready for consolidation to make life less confusing. Three bills have been drafted – one on taxation reform in the hope of garnering more cash for the national exchequer.
The others are designed to help state owned enterprises (SOEs) focus on making profits, and let businesses concentrate on job creation to bump the budget up into second gear.
Currently it’s cruising. The World Bank says the GDP annual growth bounces around five per cent in Southeast Asia’s largest economy. That looks spectacular when measured against neighbors like Australia with less than two per cent.
However, the Indonesian figure is largely underpinned by domestic consumption among its 270 million citizens, so the government wants to lift exports. This means creating a benign investment climate.
Indonesia ranks 73rd on the Ease of Doing Business list developed by World Bank economists. New Zealand is number one, a position it also holds on Transparency International’s Corruption Perception Index, suggesting the two factors are linked.
While the Indonesian government sees over-regulation and duplication as bars to progress, graft remains endemic and is not being tackled in the draft ordinances. The TI rank is 85th and hardly moves.
Omnibus is probably not the smartest term to sell a novel notion as the word is foreign and has many meanings.
The Latin original meant “for all”. Two centuries ago it described a horse-drawn carriage in Paris. The term then migrated across the Channel and the Atlantic when buses became motorized.
Now it’s left public transport and nestled in publishing and politics to mean a collection of stories or laws. However, there’s little indication that the public is so familiar with the word that it feels comfortable.
Indonesian labor unions are certainly ill at ease, fearing the crushing of workplace hiring, firing and safety protections in any compression of legislation. Some workers have been shouting in Jakarta protests, although not in numbers that would make the Presidential Palace quake.
Other concerns have been expressed by urban planners and environmentalists. They are alarmed that procedures to preserve open space and restrict commercial development in residential areas will be sacrificed if the omnibus bills take short cuts.
Their worries have been aggravated by statements attributed to coordinating economic minister Airlangga Hartarto, who reportedly said permits will be scrapped for “simple structures”.
He defined these to be like two-storey buildings. Off-hand comments suggest policy-on-the-run rather that well considered analysis, propping up claims that many stakeholders were not consulted when the bills were being drafted.
Rushed debates don’t always lead to jurisprudence that’s just.
Businesses have so far welcomed the proposal as a move towards consistency. Omnibus laws come to the rescue headlined one investment magazine, as though the will be like lifeboats in the flooded capital.
An exception has been the mining lobby, which wants the government to first stabilize its guidelines on the export of raw minerals. Nationalists claim ores should be processed in the archipelago, adding value before shipping by refining minerals like copper, nickel and bauxite.
The latter is the raw material for alumina, which is decomposed to make aluminum. The costs of building and running power-hungry smelters are exorbitant.
The planned omnibus dicta are supposed to simplify a clutch of messy bits and bobs that bother entrepreneurs, like rules about hiring overseas workers, and buying, owning and developing land.
Then there’s knowing who to contact in government offices for correct advice and how to get licenses which won’t be challenged by officers from other departments when work is underway and equipment on site.
As the livelihoods of numerous public servants depends on them maintaining old labor-intensive tasks, the problem of implementing unwelcome measures is ever present.
Decentralization followed the 1998 collapse of President Soeharto’s 32-year New Order government. This led to regional administrations passing their own regulations, which often challenged or duplicated Jakarta’s rules.
The English word socialization, which means getting on well with others, has been hijacked by Indonesia and given a twist. Sosialisasi is now a public education program, usually run by governments and companies to justify and clarify changes in direction.
So far the proposed omnibus drafts have not been well explained, leading to confusion and suspicion of the government’s real intent.
In late January, the DPR approved 50 bills to be included in this year’s National Legislation Priority Program. Among them are the omnibus drafts.
That doesn’t mean they will automatically get right up to the traffic lights; much will depend on how other legislation moves and who will give way. The drivers will be the 575 DPR members, and who knows how they’ll behave?
If President Joko’s 100-day ambition is achieved, the DPR will be setting new records in lawmaking.