2021 is the Starting Point of the Acceleration of Economic Recovery

Kompas/Priyombodo

A medical officer shows the Covid-19 vaccine produced by Sinovac, which is guaranteed safe and halal for use at the Kebayoran Lama Community Health Center, South Jakarta, Friday (15/1/2021).

JAKARTA, KOMPAS - The year 2021 is believed to be the starting point for the acceleration of Indonesia’s economic recovery. However, after contracting due to the Covid-19 pandemic, economic recovery will not take place immediately. There are challenges in reducing Covid-19 cases and ensuring the effectiveness of the vaccination programs.

The government is targeting the economy to grow by 4.5-5.5 percent in 2021. A number of indicators of the economic improvement that began to appear in the third quarter of 2020 give confidence that the recovery will continue this year.

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The signs of the recovery were, among others, seen in the Manufacturing Index (PMI) which reached 51.3 percent in December 2020 or at the level of expansion, the increase in imports of capital goods and raw materials in recent months, and the improvement of the Consumer Confidence Index (IKK) from 79 in October 2020 to 92 in November 2020.

Coordinating Economic Minister Airlangga Hartarto believes that the economic growth target can be achieved even though growth in the first quarter of 2021 is predicted to be lower than in 2019. This is because the government has to reimplement social restrictions to rearrange the pandemic management strategy amid an increase in new Covid-19 cases.

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“The mobility must be ‘braked’ a little; activities are limited to prevent an increase in cases. The fact shows that every time there is a holiday, the new Covid-19 cases rise by up to 30 percent. The limitation of activities gives the government an opportunity to reorganize, " Airlangga said during a discussion titled " Let \'s Collaborate, Rising in the Pandemic Era " in Jakarta on Tuesday (19/1/2021). The event is part of a series of Kompas100 CEO Forum 2021 which would end on Thursday (21/1).

EVENT KOMPAS

Photo with the Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto and a number of CEOs in the CEO After Lunch Discussion with the theme "Rising in the Pandemic Era", Tuesday (19/1/2021) which was held online. This discussion is part of a series of events on the Kompas100 CEO Forum.

Also present at the virtual discussion, among others, CEO of Kompas Gramedia Lilik Oetama, professor of Lung Disease, School of Medicine, University of Indonesia Tjandra Yoga Aditama, the president director of PT Telkom Indonesia (Persero), Tbk Ririek Adriansyah, the president director of PT Bank Central Asia Tbk (BCA), Jahja Setiaatmadja, and the president director of PT Garuda Indonesia (Persero) Tbk, Irfaniaputra. The president director of PT Pegadaian (Persero), Kuswiyoto, co-Founder of Traveloka Albert, vice CEO of Pan Brothers (Tbk), Anne Patricia Sutanto, and CEO of Kalbe Farma, Vidjongtiua also took part in the discussion.

According to Airlangga, even though he had to hit the “ brake" in early 2021, this year would be a turning point for the acceleration Indonesia\'s economic recovery. There are several factors that will support this acceleration, namely the increase in the household purchasing power, investment reform carried out under the Job Creation Law, and the rise in commodity prices that can boost export earnings.

Also read: Indonesian Economy After Vaccination

Effective vaccination is also believed to become one of the determining factors in the recovery of the national economy. Airlangga said the government will provide 426.8 million doses of Covid-19 vaccine for 182 million Indonesians in order to achieve the herd immunity. The vaccines will be procured from Sinovac, Novavax, Covax / Gavi, AstraZeneca, Pfizer and Moderna.

Confidence

According to Irfaniaputra of Garuda, the confidence must be built together with the government and the private sector. Although the airline industry has been hit hardest by the pandemic and restriction policies, the strict use of health protocols and effective vaccinations are a must in order to provide a sense of security and trust in the public.

Meanwhile, Jahja Setiaatmadja of BCA said companies and the government should work together to maximize vaccination so that its positive impact could help accelerate the economic recovery. He suggested that the private sector be involved in distributing vaccines to employees who have the purchasing power to drive the economy.

KOMPAS/RIZA FATHONI

As many as 21 people from Provincial Government officials and figures await their turn to receive the Sinovac vaccine at the Hall of City Hall, DKI Jakarta Province, Friday (15/1/2021).

"The faster the vaccination is carried in the community, the faster people can do their activities, and the economic turnover will also grow faster," he said.

Also read: Indonesian Economy After Vaccination

Previously, the Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Employers\' Association (APINDO) also suggested that the private sector be involved in the import and distribution of vaccines. The two organizations said that the participation of entrepreneurs would help ease the government’s financial burden, and at the same time, would accelerate the vaccination process and the economic recovery (Kompas, 19/1/2021).

Not a single issue

According to Tjandra Yoga, there are many factors that affect the success of the vaccination program, including the discovery of new Covid variants in a number of countries and uncertainty regarding the duration of vaccine resistance in the body.

The World Health Organization (WHO) estimates that herd immunity will not suddenly be achieved in 2021. Tjandra warned that vaccination cannot stand alone. The success in handling the pandemics and economic recovery depends on the implementation of health protocol strategies and testing and contact tracing.

"It is not only to strengthen the vaccination, it is not only to strengthen the 3M protocol (wearing a mask, keep distance, and washing your hands), it is only to strengthen 3T (testing, tracing, treatment) or medication. All must work together optimally, "said Tjandra.

This article was translated by Hendarsyah Tarmizi.