Indonesian President Joko Widodo yesterday said that his government would ensure legal certainty for investors, offering continuity guarantees amid jitters and confusion over last week’s court ruling against a controversial job creation law.
The Indonesian Constitutional Court, ruling on Thursday a case brought by labor unions, said there were procedural flaws in the formation of the legislation passed last year, which the government had touted as potential a game-changer in luring foreign investment to Southeast Asia’s biggest economy.
The court told the government to make necessary amendments within two years. The “omnibus” law saw the revision of more than 70 existing laws, in an effort to reduce red tape and streamline new business permitting.
The president said that the court had ruled that the law would remain in effect pending the changes, which his Cabinet would address as quickly as possible.
“I assure businesses and investors, both domestic and international, that the investments that have been made and investments that are being and will be processed, will remain safe and secure,” he said in a video statement. “I will make sure that the government guarantees the security and certainty of investment in Indonesia.”
The assurance by Widodo comes as economists warn the ruling could dim Indonesia’s investment outlook and as business groups seek clarity and guarantees.
Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto yesterday said operations of the Indonesia Investment Authority, its sovereign wealth fund, would remain unchanged, despite the ruling.
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