Indonesia Investment Minister expects no change in law

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Indonesia Investment Minister expects no change in law

Indonesia's Investment Minister Bahlil Lahadalia said on Wednesday he did not expect any disruption in the fourth quarter of investment realisation despite the country's constitutional court ordering amendments to a law aimed at cutting red tape.

The Constitutional Court ruled last week that the 2020 Job Creation Law was unconstitutional due to procedural flaws and the government must make changes within two years.

President Joko Widodo's legislation is intended to boost investment, particularly in mineral ore processing, including building an electric vehicles battery industry to take advantage of Indonesia's rich nickel reserves.

The law, which saw the revision of more than 70 existing laws and was welcomed by businesses, has sparked protests across Indonesia and complaints that it has undermined labour rights and environmental safeguards.

The government has a target of 900 trillion rupiah US $62.78 billion investment this year, from domestic and foreign investors. Indonesia expects to climb to 1,200 trillion Rupiah next year in order for the economy to grow above 5 per cent, according to a virtual briefing by Bahlil.

As long as the disease is under control, these targets would be achieved, he said.

Bahlil said his office was reassuring investors that the ruling did not affect any clauses in the law and the rules remained in effect until the amendments were made.

He said that we are doing direct communication day and night with around a thousand big companies, and that they understand the situation and believe in the leadership of the president. President Joko Widodo said his government would ensure legal certainty for investors, and that investments made and those that are currently being processed would remain safe and secure.