• 목요일, 02월 25일
목요일, 02월 25일

Stimulus in Indonesia is insufficient for households to get through pandemic

Stimulus in Indonesia is insufficient for households to get through pandemic

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[Newsphopick=Kingsley Lim] According to a new survey, Indonesia’s stimulus is not enough for households to survive the coronavirus pandemic. As such, economists have called on the Indonesian government to increase the budget allocated to fight the virus and stimulate the ravaged economy.

The survey, which was published on Monday by political consultancy Cyrus Network, found that the majority of Indonesian respondents hold the opinion that the government’s stimulus is insufficient to help them survive the dire effects the coronavirus pandemic. 

“We still need a greater stimulus to boost the demand side of the economy,” said economist Ari Kuncoro from the University of Indonesia. According to Ari, the government should be creative and customise its aid for citizens. For example, the government could give an internet subsidy for students and incentives for leisure activities. 

“The micro, small and medium enterprises (MSMEs) are now looking to get working capital loans to boost production, but they will need demand, which has been temporarily weakened by the pandemic,” Ari said, suggesting that the government stimulus is likely to boost demand for MSMEs which have been severely hit by the pandemic. 

According to official figures, the Indonesian government has set aside Rp 695.2 trillion (US$47.66 billion) to boost economic demand and fight the virus. According to projections from the Finance Ministry, the economy will grow by 1% or at worst, contract by 0.4 per cent this year. 

According to several economists, the stimulus can act to boost demand in a weak economy, which in turn, will help to stimulate supply in the country. In general, several economists have voiced their concerns that the current stimulus package is insufficient. Ex-finance minister Chatib Basri said that the government now needs an additional Rp120 trillion for the lower- and middle-income groups in Indonesia to revive demand within the economy. 

The survey which had 1230 respondents from 123 villages and 34 provinces did have a silver lining – most of the respondents are satisfied with the government’s stimulus package, initiatives, financial aid and tax incentives for both businesses and individuals. 

In general, respondents welcome the decision to reopen the economy after three months of social restrictions. Respondents believe that Indonesia’s reopening will aid in the economic recovery and reduce financial losses for many businesses and individuals. This will benefit the country as a whole and help its people survive the pandemic. The respondents have also expressed their approval for the reopening of schools, restaurants, tourist destinations, retail stores, malls and workplaces. 

According to Ari, the results of the survey “should be a point of reference for the government to make a policy decision to open schools, given the higher public approval,” and the government is moving in the right direction. 

“Public support for reopening schools and universities is higher than for reopening shopping malls,” said Cyrus Network CEO Eko Dafid Alfianto in a press briefing, suggesting that the government should reopen schools before doing so with malls.

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