Indonesia's labour laws deter investors: Experts

Overhaul of rules needed to bring in foreign direct investment and boost workers' welfare

Indonesian workers protesting in Jakarta last week against a government plan to loosen the country's strict labour laws. President Joko Widodo, fresh from last year's landslide re-election victory, is seizing on his political capital to push through
Indonesian workers protesting in Jakarta last week against a government plan to loosen the country's strict labour laws. President Joko Widodo, fresh from last year's landslide re-election victory, is seizing on his political capital to push through reforms to the labour laws that date back to the time when the chairman of his own party, Ms Megawati Sukarnoputri, was president. PHOTO: AGENCE FRANCE-PRESSE
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Last week, Indonesian President Joko Widodo introduced legislation in Parliament that would overhaul the country's infamously inflexible labour laws that investors and experts say paradoxically leave workers worse off.

Three-quarters of the country's non-agricultural workforce is in the informal sector, which includes those who work as housekeepers or casual construction labourers who rarely benefit from the country's labour laws that, among other things, provide for minimum wages as well as severance payments, according to the World Bank.

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A version of this article appeared in the print edition of The Straits Times on February 18, 2020, with the headline Indonesia's labour laws deter investors: Experts. Subscribe