Legal breakthrough of the Indonesian job creation law for ease, protection, and empowerment of MSMEs during the COVID-19 pandemic

Abstract

Covid-19 is seen as a black swan event widely affecting almost all sectors and sending a wave of uncertainty for micro, small, and medium enterprises (henceforth MSMEs) in Indonesia. Despite being the most affected, these sectors could stand under this pressure, remain, and regrow faster following this hit. The government, referring to Law of the Republic of Indonesia Number 11 of 2020 concerning Job Creation and several delegated regulations, intends to ease, protect, and empower the MSMEs and bring them further as leading sectors to recover the economy in Indonesia. This research aims to evaluate the degree of success of 28 government-driven programs according to Job Creation Law focused on the three aspects: ease, protection, and empowerment. With a backcasting method, it is necessary to work backwards to identify existing regulations and programs run at present time. Through constructive cross-examination, this research reveals that 15 programs worked successfully, 10 programs indicated an average degree of success, and 3 programs were categorized as poor degrees of success. This indicates that in general, the government’s programs aiming to ease, protect, and empower the MSMEs amidst the pandemic can serve as a legal breakthrough for the revival of the MSMEs. However, some programs need improvement to maximise the impact on the MSMEs.