The government says it has prepared short and medium-term measures to curb layoffs (PHK) amid the threat of a recession in 2023. Coordinating Minister for the Economy Airlangga Hartarto conveyed at the Plenary Cabinet Meeting, President Joko Widodo (Jokowi) provided notes to take anticipatory steps hurricane layoffs, one of which is by encouraging spending on domestic products. "It was noted earlier from the subject of the President's discussion that first to prevent risks rather than potential short-term layoffs, encourage regional central spending to use domestic products," he said in a press statement at the Plenary Cabinet Meeting at the Presidential Palace, Jakarta, Monday (16/1/2023 ).
In addition to the short term plan, Airlangga said that for the medium term, the government will carry out structural improvements in the upstream to downstream industry. Starting from the supply chain, human resources (HR), research and development (RnD), and access to the labor market.
"Especially also accelerating CEPA agreements including the European CEPA [IEU-CEPA] and also some cooperation from non-traditional markets," he explained.
Thus, through these anticipatory steps, it is hoped that demand and production will be maintained and can reduce layoffs in 2023.
Previously, according to the records of the Indonesian Employers' Association (Apindo), throughout 2022 there will be more than one million layoffs due to decreased demand which has driven down production so that labor efficiency is needed.
Meanwhile, regarding the Indonesia-EU Comprehensive Economic Partnership Agreement (IUE-CEPA), Airlangga previously emphasized that the trade agreement must be completed by 2023. The IUE-CEPA is important to make it easier for Indonesian commodities to enter the European market.
If later the IUE-CEPA officially takes effect, one of the benefits will be to cut import duties on Indonesian commodities exported to Europe from 10-12 percent to 0 percent. This is mainly to increase the export performance of the textile and textile products (TPT) sector.
Vietnam and Bangladesh have previously received 0 percent import duty for their TPT products. Not only TPT products which will be a priority, Airlangga also said that the existence of the IEU-CEPA would boost export performance in the manufacturing sector including automotive, machinery, and also several sectors in petrochemicals.