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Opinion

Jokowi's labor law reforms risk antagonizing Indonesia's unions

Jakarta needs to simplify system which puts off foreign business investment

| Indonesia
Hundreds of labors hold protest against the employment omnibus law in Jakarta on Jan. 20: there is resistance from labor unions, particularly to the sections on creating jobs and labor reform.   © Anadolu Agency/Getty Images

Indonesia, which sits below Singapore, Malaysia and Thailand in global competitiveness rankings, is a classic example of how legal uncertainty, legislative sprawl and labor issues can put off global investors.

In fact, in President Joko "Jokowi" Widodo's first term from 2014 to 2019, Indonesia issued at least 10,180 regulations, consisting of 131 laws, 526 government regulations, 839 presidential regulations and 8,684 ministerial regulations. Indonesia is a hyper-regulated market, with institutions, departments, ministries, local governments and central government often creating overlapping laws and rules.

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