Law and Humanities
Quarterly Reviews
ISSN 2827-9735
Published: 18 December 2023
Balancing the Role of Foreign Investment in Economic Growth and Achieving Prosperity, Study in Indonesian Law and Experience
Sabari Barus, Budiman Ginting, Saidin, Faisal Akbar Nasution
Universitas Sumatera Utara
Download Full-Text Pdf
10.31014/aior.1996.02.04.90
Pages: 112-121
Keywords: Balancing, Role of Foreign Investment, Economic Growth, Welfare
Abstract
Foreign investment can increase economic growth and create prosperity in a country. However, sometimes foreign investment can increase economic growth and fail to create prosperity. This problem is of course related to the laws governing foreign investment. This article wants to discuss the regulations in law regarding the role of foreign investments in increasing economic growth and creating prosperity in Indonesia. Regulations in Indonesian law and experience show that foreign investment is widely open to enter Indonesia so it is felt to be able to encourage economic growth. However, Indonesia's experience in practice shows that things often happen that cause some people to suffer because of the presence of foreign investment. From the results of the research and discussion, it can be concluded that the regulations in the foreign investment law in Indonesia still prioritize economic growth, while the aspect of achieving people's welfare from the presence of foreign investment receives less attention. Therefore, it would be better if the investment laws were revised to create a balance between economic growth and prosperity. In other words, investment laws must be able to encourage economic growth and create prosperity simultaneously. There must be a balance between growth and prosperity.
References
Alfaro, L. (2014). Foreign Direct Investment: Effects, Complementarities, and Promotion. Working Paper, Harvard Business School, August 5, 2014.
Budiman, Arief (2000). Third World Development Theory. Jakarta: PT. Gramedia Pustaka Utama.
Davarnejad, L. (2008). Strengthening The Social Dimension of International Investment Agreements By Integrating Codes Of Conduct For Multinational Enterprises. OECD Global Forum on International Investment VII, 27-28 March 2008.
Decision of the Constitutional Court of the Republic of Indonesia Number 91/PUU-XVIII/2020.
Decision of the Constitutional Court of the Republic of Indonesia Number 21-22/PUU-V/2007.
Ginting, Budiman (2008). Legal Certainty and Its Implications for Investment Growth in Indonesia. Inauguration Speech for the Position of Professor, Universitas Sumatera Utara, Medan, 20 September 2008.
Laila, Kennial (2021). Community Suffering Behind the Rise in Nickel's Prestige, https://betahita.id/news/detail/6025/derita-community-di-baik-naiknya-pamor-nikel.html.html, Wednesday 24 March 2021, downloaded 11 September 2021.
Law of the Republic of Indonesia Number 6 of 2023 concerning Stipulation of Government Regulations in Lieu of Law Number 2 of 2022 concerning Job Creation Becoming Law.
Law of the Republic of Indonesia Number 11 of 2020 concerning Job Creation.
Law of the Republic of Indonesia Number 22 of 2019 concerning Sustainable Agricultural Cultural Systems.
Law of the Republic of Indonesia Number 25 of 2007 concerning Investment.
Law of the Republic of Indonesia Number 1 of 1967 concerning Foreign Investment.
Law of the Republic of Indonesia Number 16 of 1965 concerning the Revocation of Law Number 78 of 1958 concerning Foreign Investment.
Law of the Republic of Indonesia Number 78 of 1958 concerning Foreign Investment.
Lubis, M. Solly (1989). Miscellaneous Politics and Law. Bandung: CV. Mandar Maju.
Mahfud MD, Moh. (2001). Legal Politics in Indonesia. Jakarta: PT. Pustaka LP3ES Indonesia.
Marzuki, P. M. (2008). Introduction to Legal Science. Jakarta: Kencana.
Mas, Marwan (2004). Introduction to Legal Science. Bogor: Ghalia Indonesia.
Presidential Regulation of the Republic of Indonesia Number 18 of 2020 concerning the 2020-2024 National Medium-Term Development Plan.
Purwanto, Niken Paramita & Mangeswuri, Dewi Restu (2011). The Influence of Foreign Investment and Foreign Debt on Indonesia's Economic Growth. Journal of Economics & Public Policy, Vol. 2(2), December 2011.
Rahardjo, Satjipto (1980). Law and Society. Bandung: Angkasa.
Rajagukguk, Erman (2019). Investment Law. Jakarta: PT. RajaGrafindo Persada.
Saidin, OK. (2016). History and Politics of Copyright Law. Jakarta: RajaGrafindo Persada.
Saragih, Bintan R. (2006). Politics of law. Bandung: CV. Utomo.
Sembiring, Sentosa (2007). Investment Law. Bandung: Nuansa Aulia.
Sucahyo, Nurhadi (2021). Papuan People and the Future of PT Freeport Indonesia, https://www.voaindonesia.com, 13 March 2017, downloaded September 11, 2021.
The 1945 Constitution of the Republic of Indonesia.
The 1950 Provisional Constitution of the Republic of Indonesia.
Wacks, Raymond (1987). Jurisprudence. Glasgow: Bell and Bain Limited.