Healthcare Revamp, Govt Appeals Nickel Ruling, 2022 Budget Deficit, Employers Not Asked on Job Creation Perppu
Jan 09, 2023
Govt to Focus on Healthcare Transformation
The government will now focus on its healthcare transformation program following the revocation of PPKM, according to Minister of Health Budi Gunadi Sadikin.
The transformation consists of six core aspects to be improved: primary healthcare, referral services, healthcare system resilience, financing, human resources, and technology. Budi said his ministry aims to expand and standardize health service posts (Posyandu) and community health centers (Puskesmas), and address the lack of hospitals and medical professionals across the country.
The development of a “big-data” record keeping system will also be a priority. The PeduliLindungi Covid-19 tracking app will be repurposed and incorporated into the Satu Sehat (One Health) system, which will integrate patient health data, he said.
Indonesia has officially launched an appeal against the World Trade Organization's (WTO) unfavorable ruling on the nation's nickel export ban, Minister of Trade Zulkifli Hasan said.
The WTO Dispute Settlement Body (DSB) panel decided in October 2022 that Indonesia’s nickel export ban violated Article XI:1 of the 1994 General Agreement on Tariffs and Trade (GATT). The ruling was in favor of a European Union complaint submitted in November 2019.
Analysts say the WTO decision impacts investor confidence in the nickel (and other ore) downstreaming policy and the development of the electric vehicle (EV) industry in Indonesia.
However, the government is determined to force more mineral ore to be processed domestically, announcing a bauxite ore export ban starting in June.
After recording a 2.38 percent state budget deficit in 2022, the government has set state expenditures in the 2023 state budget (APBN) at Rp 3,061.2 trillion with a 2.84 percent deficit, in accordance with Law 2/2022, which mandates the state budget deficit at below 3 percent in 2023, said Minister of Finance Sri Mulyani Indrawati.
The deficit reflects the continuous reduction of the state budget deficit since 2020, when the government increased the deficit level to mitigate the effects of the Covid-19 pandemic.
International observers say the deficit reduction is a step in the right direction, especially in controlling inflation and debt management. If the bleak economic predictions for 2023 come to pass, the Indonesian government will have plenty of fiscal space to maneuver.
Employers have said they were not consulted by the government on the controversial new regulation in lieu of law (Perppu) 2/2022 on Job Creation.
Hariyadi Sukamdani, chair of the Indonesian Employers Association (Apindo), said the government did not involve a single business association or private sector representative in the making of the Perppu. Other stakeholders have said the issuance of the Perppu repeats the same mistake on the deliberation of the omnibus Job Creation Law, highlighting the lack of transparency and public participation.
Hariyadi said outsourcing restrictions were counterproductive, as the new Perppu limits outsourcing to only “parts” of a company’s operational work, and gives the government the authority to determine which type of work can be outsourced. This is a major change from the original omnibus Job Creation Law, which deregulated outsourcing.
He also expressed concern that the new formula to determine the minimum wage would create further gaps between labor supply and demand, as economic growth does not always go hand in hand with labor absorption. The Perppu sets three variables on determining the minimum wage: economic growth, inflation, and certain indices, while the original omnibus law only considered either economic growth or inflation.
A petition to reinstate the work-from-home (WFH) policy has gone viral, garnering more than 21,000 signatures. The Covid-19 pandemic changed work culture and made many companies implement WFH. But with the end of PPKM last month, businesses have started to reapply work-from-office (WFO) practices, leading to a number of social issues such as major traffic congestion.
In response, a petition to bring back WFH was started by Riwaty Sidabutar and has already received 21,273 signatures, with a target of 25,000. Riwaty said that while WFO may not necessarily make employees more productive, the inefficiency of time and resources, especially during bad weather, makes travel longer and more stressful.
Acting Jakarta Governor Heru Budi Hartono said companies should follow their own preferred work practices, but recommended WFH particularly for businesses situated in flood-prone areas, considering the recent extreme weather.
The petition makes sense given the many benefits of WFH, City Planning Observer and Chair of the University of Gadjah Mada Transportation Studies Center Ikaputra said. He also urged people to use public transportation to help reduce traffic congestion.
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AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor.