Jakarta, CNBC Indonesia – Head of Asia-Pacific Sovereigns Fitch Ratings Stephen Schwartz assessed that the Omnibus Law on Employment Creation is a good catalyst in encouraging investment in Indonesia. However, investors still need time to see the progress of the implementation of the law. If it goes smoothly, it is not impossible for many factories from China to relocate to Indonesia.
Stephen is of the opinion that in addition to having a positive impact, he assesses that the Omnibus Law on Job Creation will support structural reforms that have been an obstacle to investing in Indonesia due to regulatory obstacles.
“The Job Creation Law can have a positive impact on Indonesia, can encourage more foreign direct investment (FDI),” he said, in an interview with CNBC Indonesia, Thursday (8/10/2020).
One sector that can take this opportunity, continued Stephen, is manufacturing. This is because during the Covid-19 crisis, many factory relocations from China as the center of the global supply chain were disrupted, especially during a pandemic like this.
For the record, last September, the World Bank noted that at least 33 industries had relocated from China, 23 moved to Vietnam and 10 others were scattered to other Southeast Asian countries such as Cambodia, Myanmar, Thailand and Malaysia. However, none of them went to Indonesia.
Therefore, with an omnibus and a series of conveniences in doing business, it is hoped that it can bring in new investment.
“This crisis is an opportunity, the most fundamental, the implementation which is more important. We need time to see how this is implemented in the long term,” he said.
(hps / hps)
– .
