Indonesian government's strategies in response to Covid-19 pandemic
Variety of health, community and business programmes have been rolled out to help economy recover quickly.
SINCE its outbreak in 2019, Covid-19 pandemic has impacted the lives of people in the world, including in Indonesia. It upends global and Indonesia's economy. Although 2020 was the toughest year for Indonesia, we are optimistic that Indonesia can bounce back from this very challenging condition. Indonesia's economic growth in the first quarter of this year, contracted by 0.74 per cent, showing improvement from the last quarter of 2020's figure which contracted by 2.19 per cent (year on year).
Recently, the number of confirmed Covid-19 positive cases in Indonesia rose sharply due to the fast-spreading Delta variant across the country. To prevent another spike, the Indonesian Government continues to make efforts to handle Covid-19 cases in Indonesia.
Believing that vaccination has a central role in handling Covid-19 and recovering the national economy, the government is now racing to roll out national vaccination programmes targeted to reach herd immunity immediately. At the same time, the government also continues to boost 3T (Tracing, Testing, Treatment) followed by urging people to always do disciplined health protocols (wearing masks, washing hands and maintaining social distancing).
To curtail the spread of Covid-19 cases from getting more massive, considering that the Delta variant is a variant of Covid-19 that is very easily transmitted, the Government implements Community Activity Restrictions (PPKM) which is also applied periodically, especially in red zone areas with a high number of Covid-19 cases. The PPKM restriction is targeted to decrease confirmed cases by below 10,000 cases per day.
On the other hand, the Government also focuses on maintaining the momentum of economic recovery by accelerating the National Economic Recovery (PEN) program, in health, social protection, priority programmes, business support packages for MSME and Corporate, with a total ceiling of Rp 699.43 trillion. As of July 16, 2021, the PEN programme has been realised by 39.7 per cent.
Health
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The health programme focuses on diagnostic testing and case tracing, costs and accommodation for treating Covid-19 patients, as well as other health care programmes including the implementation of the Vaccination Programme. Currently, Indonesia's Covid-19 vaccination rollout has hit around 45 million people. On average, the Government does 900,000 vaccinations every day in the period from June 26 to July 3, 2021. The government seeks to vaccinate 208 million residents.
In accelerating Covid-19 vaccination, the government has been working closely with multiple stakeholders, including the private sector. On the other hand, the Government is also working with state-owned pharmaceutical company, Biofarma, to develop an Indonesian-made vaccine, named "Red and White Vaccine".
Social protection
The social protection programme is targeted at assisting economically vulnerable communities. The Central Government cooperates with the Regional Government to provide this assistance as a strategy for economic recovery and improving people's welfare during the pandemic.
This assistance is implemented through various programmes, namely Family Hope Programme (PKH), Basic Food Cards, Electricity Discounts, Cash Social Assistance, Village BLT, Internet Quota Subsidies for Participants and Students, Pre-Employment Cards and Wage Subsidy Assistance, and Rice Assistance.
Business support packages
To support the overall economic recovery, the Government also provides assistance and incentives for business activities, MSMEs and corporations. Under business incentive programmes, the Government provides support in the form of extension of tax incentives as well as relaxation and restructuring of credit for banks, among other measures.
In addition to these programmes, the Government also carries out various main Priority Programmes to improve community welfare and create job opportunities. The implementation of the Ministry/Agency's labour-intensive programme is implemented in collaboration with the Regional Government in order to create job opportunities for affected communities.
Support for Industrial Estates, Creative Economy and National Tourism Strategic Areas is also provided to help create job opportunities and improve the surrounding community. The Food Estate and Irrigation Programme is implemented to improve food security.
Meanwhile, the implementation of the development of National Strategic Projects will also continue to be carried out during the Pandemic period to create jobs and support infrastructure readiness in Indonesia. In addition, several other priority programmes are also carried out such as regional loan facilities, ICT support and so on.
To attract investment, create new jobs and stimulate the economy, the Government of Indonesia has enacted Law No. 11 of 2020 concerning Job Creation, also known as Omnibus Law on Job Creation. The Law stipulates substances related to, among others, improving the investment ecosystem and business activities; employment; ease, protection and empowerment of cooperatives and SMEs; and ease of doing business. Following the enactment of the Omnibus Law, the Indonesian Government enacted 49 implementing regulations to the Omnibus Law. These consist of 45 Government Regulations and four Presidential Regulations.
The implementation of the Job Creation Law is particularly aimed at encouraging job creation and entrepreneurship through the ease of doing business on a micro to large scale, protecting workers' rights through worker protection, and providing benefits to the general public including for housing provision and land redistribution.
Indonesia is confident that through the Omnibus Law and its implementing regulations, along with other efforts taken by the Government, it will be able to quickly recover its economy, increase its competitiveness and become a far more attractive destination for potential foreign businesses and investors.
- The writer is Coordinating Minister for Economic Affairs of the Republic of Indonesia
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