It’s Hard, but the Economy is Still Growing

KOMPAS/LASTI KURNIA

Residents line up to buy hand sanitizers and masks at the Kimia Farma dispensary in Menteng, Central Jakarta, on Wednesday (4/3/2020). The Kimia Pharma network, consisting of as many as 1,300 outlets, has ensured the sufficient supply of masks without marking up prices, selling the protective gear for Rp 2,000 (14 US cents) per piece and purchases are limited to two masks per transaction.

JAKARTA, KOMPAS — The impacts of a decline in the Chinese economy on Indonesia’s exports and imports and due to the Covid-19 outbreak continue to be minimized to ensure the country’s economy can continue to grow. More fiscal and monetary policies are being introduced to support economic growth.

Meanwhile, President Joko “Jokowi” Widodo has asked ministries and state institutions to be responsive and sensitive.

In the opening of the 2020 Trade Ministry’s Working Meeting at the State Palace in Central Jakarta on Wednesday (4/3/2020), the President said that despite heavy economic pressures, the government along with all stakeholders must be able to deal with it.

"Stay focused on working, maintain optimism, take advantage of opportunities and find a way out to deal with the difficulties," he said.

Economic activities are being seen in ports and tourist destinations.

Bank Indonesia (BI) believes the situation began to improve in China after passing through the lowest point during the last two months. Economic activities are being seen in ports and tourist destinations. The early recovery is expected to begin in April 2020 and the condition will be fully recovered in June this year, he said.

"Until now, our monitoring shows that everything is still in line with our estimates," BI Governor Perry Warjiyo said in a meeting with chief editors of news media at the central bank’s office in Jakarta on Wednesday.

KOMPAS/LASTI KURNIA

An officer checks rice at the State Logistics Agency (Bulog) warehouse, in Kelapa Gading, Jakarta, Wednesday (4/3/2020). State Enterprise Minister Erick Thohir confirmed that Bulog\'s rice supply of 1.65 million tons was sufficient and ready to meet the public’s needs ahead of Ramadan and in anticipation of panic as a result of the spread of the novel coronavirus.

In its role in safeguarding economic growth, BI cut its benchmark interest rate by 25 basis points to 4.75 percent last week. BI will meet the Financial Services Authority (OJK) to ensure the cut will be able to push down lending rates.

Amid uncertainties in the global economy, the President said imports of consumer goods, including garlic and beef, are still needed. Approaching Ramadan, supplies of consumer goods must be sufficient so that inflation can be controlled, he said.

"Don\'t worry people. They are already worried because of the coronavirus, and don’t make them even more worried because of the shortage of supply," he added.

At the warehouse of the State Logistics Agency (Bulog) in Sunter, North Jakarta, on Wednesday, State-Owned Minister Erick Thohir said the government was committed to fixing the distribution of rice ahead of Ramadan and dealing with panic buying following the announcement of Indonesia’s first two confirmed COVID-19 cases on Monday. At present, the country has a total of 1.65 million tons of rice in stocks.

During harvest time, prices are pushed down and the farmers are impoverished.

"In business, people have the right to earn a profit. However, don’t play around with rice. In a sense, don’t let it happen, when the people need more, the price is pushed up. During harvest time, prices are pushed down and the farmers are impoverished," Erick said.

A senior researcher at the Institute for Development of Economics and Finance (Indef), Enny Sri Hartati, believes that the crucial pillar in the food sector is availability and access. Therefore, the availability of rice must be able to meet the needs of the people.

"Goods must be available and prices must be affordable. If you have supplies, but cannot guarantee distribution and price [stability], it will not be effective," he said.

KOMPAS/TOTOK WIJAYANTO

Activities as Senen Market, Central Jakarta, on Wednesday (4/3/2020). The government ensures that food supplies are still adequate and urges people not to panic.

Meanwhile, the government has begun evaluating poverty reduction strategies that will focus on communities living in extreme poverty, whose population is estimated to reach about 9.4 million people.

"I want to be more focused on people living in extreme poverty," said the President.

To maintain economic growth, the government has issued a fiscal policy to help increase the people’s buying power, among others by increasing non-cash food assistance from Rp 150,000 (US$10.59) to Rp 200,000 starting in March. (NMP/NTA/LKT/LAS )