Maintaining the Optimism of the People

KOMPAS COLLABORATION FORUM

A screenshot shows the speakers in the Kompas Collaboration Forum (KCF) webinar in Jakarta on Friday (6/11/2020). The webinar, titled “Indonesia’s Policy Strategy to Deal with Economic Recession”, was attended by 35 chief executive officers (CEO) and directors that are members of the KCF.

The government is trying to strike a balance between the economy and health aspects so that we can quickly get out of the recession and crisis caused by the Covid-19 pandemic.

JAKARTA, KOMPAS— Apart from trying to come out of the recession zone, the government is also working to overcome the health crisis caused by the Covid-19 pandemic. Efforts to maintain a balance in the handling of health and the effort to recover the economy are believed to be able to maintain public optimism.

That was the conclusion of the virtual seminar held by the Kompas Collaboration Forum (KCF) in Jakarta on Friday (6/11/2020). The limited discussion organized by the KCF, which consists of 35 chief executive officers (CEOs) and directors, was titled "Indonesia\'s Policy Strategy in Coping with Economic Recession".

Read also: Alarm of Economic Recession

Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan, one of the speakers, said the economic contraction in two consecutive quarters in April-June and July-September had caused Indonesia to fall into a recession. However, technically, Indonesia had begun to come out of the recession because the economy in the third quarter had showed some improvements compared to that in the second quarter of 2020, he said.

Although the economy was still contracting, almost all components of expenditures and production improved compared to the previous quarter.

In third quarter, Indonesia\'s economy shrank 3.49 percent, not as deep as 5.32 percent in the second quarter. Although the economy was still contracting, almost all components of expenditures and production improved compared to the previous quarter.

"Indonesia\'s economy is relatively better than those of other countries, except that of China, which is growing positively," said Luhut.

KOMPAS/PRIYOMBODO

A double exposure photo shows President Joko “Jokowi” Widodo and a Indonesia Stock Exchange screen displaying stock prices in Jakarta on Friday (6/11/2020). The IDX Composite Index strengthened 75.302 points or 1.43 percent to close at 5,335.529 points.

The Covid-19 pandemic has severely affected the economy. Therefore, the government continues to strike a balance between the effort to improve the economy and the handling of the pandemic. The economy, said Luhut, would further worsen if the large-scale social restrictions (PSBB) were extended again.

Read also: Maintain the Economy, Handle Covid-19 More Optimally

According to him, the government is launching three main strategies in the handling of Covid-19 in eight regions that have contributed greatly to the national economy, but have higher number of Covid-19 infection cases. The eight regions are Jakarta, West Java, Central Java, East Java, South Kalimantan, South Sulawesi, North Sumatra and Bali.

The three strategies are mainly related to the change in the people’s behavior and early detection of the spread of the virus, the opening of quarantine and isolation centers, and the treatment of the Covid-19 patients.

The provision of vaccines

Luhut added that the government\'s efforts in maintaining the public optimism included, among others, to ensure the availability of vaccines. The emergency use authorization (EUA) of the Sinovac and Sinopharm vaccines is expected to be issued at the end of November or early December 2020. The vaccinations is also expected to begin in the third or fourth week of December, 2020.

“Jakarta is the first target for the vaccination program which will be carried out per spot or region, ”said Luhut.

The vaccination would also be followed by health sector reform, he said, adding that the government was also preparing a platform that would integrate the data related to Covid-19 into the BPJS universal health protection system.

Read also: Accelerating the Economic Recovery

CEO of Triputra Agro Persada, Arif Patrick Rachmat, and the president director of Santini Group, Lukito Wanandi, shared the same opinion that the availability of the vaccines would be the key in improving the people’s optimism.

"Vaccines are important, but effort to further helping the lower class with a stimulus is also necessary,” said Arif.

KOMPAS/RONY ARIYANTO NUGROHO

Dana, 51, puts labels on sandals at his workshop in Ragasi kampong of Ciomas, Bogor regency, West Java, on Thursday (5/10/2020). Since COVID-19 hit the country in March, he has only received two orders from customers for a total of 1,200 pairs of sandals, which is only a fraction of the pre-pandemic order numbers. Small businesses in the area are feeling the impact of the pandemic.

The CEO of PT Kalbe Farma Tbk, Vidjongtius, said in the virtual discussion that the independence of the health sector was needed for the future of Indonesia. According to him, investments are needed to develop the manufacturing industry of pharmaceutical raw materials. The basic chemical industry would be needed to support the production of the pharmaceutical raw materials so that the country would no longer rely on imports, he added.

Meanwhile, the president director of Bank OCBC NISP, Parwati Surjaudaja, was of the opinion that the economic recovery should not only rely on vacancies. Various studies have shown that the effectiveness of the vaccine will last only between two to three years. The government, the business world, and society should, therefore, be able to adapt in order to be able to remain productive.

Read also: The Economy and Stock of Knowledge

The adaption to the new normal is considered to be able to promote the optimism of the people, especially the upper middle class. The sluggish economic activities have also affected the banking industry as reflected in the disbursement of new loans which has continued to decline since the emergence of the Covid-19 pandemic. The optimism should be maintained so that the economic activities will grow again.

Local government efforts

A number of local governments are trying to get out of the recession zone. Central Java Governor Ganjar Pranowo said that, apart from the efforts to improve the investment climate and the ease of doing business, the provincial government was also looking for new ways such as to promote the growth of micro, small and medium enterprises (MSMEs) by simplifying the complicated licensing requirements.

The West Java provincial government also prioritizes the MSME sector and farm commodities to accelerate the economic recovery. West Java Governor Ridwan Kamil said the local government had encouraged the people to buy products produced by MSMEs in a bid to help small companies.

KOMPAS/TOTOK WIJAYANTO

Several stores are closed at a shopping center in Senen, Central Jakarta, on Thursday (5/11/2020). Weakening purchasing power due to the economic recession has started to affect businesses, leading to the closure of many shops.

According to North Sumatra Governor Edy Rahmayadi, North Sumatra\'s strategy in dealing with a recession is to widely open investment opportunities in the province , especially in agricultural, plantation and livestock sectors. Other sectors that are also being promoted are the manufacturing industry as well as the accommodation and food and beverage industries. (KRN/DIT/ETA/TAM/RTG/MEL/NSA/REN)