Afraid Of Recession And Contraction Due To The Pandemic, The Government Is Confused About Finding Solutions

JAKARTA - The implementation of large-scale social restrictions (PSBB) by the Governor of DKI Jakarta Anies Baswedan has received mixed responses. Interestingly, the economic ministers did not agree with this decision, even though the aim was to reduce the spread of COVID-19. PSBB is considered to be able to influence the national economy which is already starting to move.

Economist of the Institute for Development of Economics and Finance (INDEF), Bhima Yudhistira, said that the disapproval of the ministers in the economic sector regarding the implementation of the Jakarta PSBB was based on a lack of understanding of the problems that occurred.

"The minister for the economy does not understand the problem. The PSBB should be strictly supported. Because indeed the main problem is health which is an obstacle to economic recovery," he told VOI, Friday, September 11.

According to Bhima, as the minister of economy, the mindset should be used is long term. He said that the previous trial for easing the PSBB failed to move the economy, because people were still afraid to spend.

Furthermore, Bhima considered, the response in the form of disapproval from the minister of economy towards the re-implementation of the PSBB was a form of government fear about the threat of a recession.

As is well known, Indonesia is still fortunate that it has not fallen into a recession because economic growth in the first quarter was in the positive zone. However, in the second quarter, economic growth contracted considerably by minus 5.32 percent. If the third quarter of the national economy is still negative, then technically Indonesia will experience a recession.

"A recession will definitely occur in the third quarter. What they (the ministers) are afraid of in the fourth quarter is that the economy will still contract," he said.

Bhima said the disapproval of several Jokowi ministers regarding the implementation of the PSBB in DKI Jakarta indicated that the government did not have a solution to save the health and economic sectors simultaneously. Thus, government and regional decisions are not in line.

"It's not in sync and there is a sectoral ego between the central and regional governments. It seems there is no coordination," he said.

In the same opinion, the Director of Core Indonesia Research, Piter Abdullah, said that the response of the economy minister to the DKI Governor's decision did raise the suspicion that this decision was not coordinated with the central government. However, he did not believe this.

"There must be coordination. The government really wants to maintain the economy. But the number of COVID-19 sufferers is also increasing and has almost exceeded the limit of health service capabilities. Whether we want it or not, there must be hard efforts to curb the rate of increase in COVID-19 sufferers," said Piter.

One way to reduce the rate of spread and increase of new positive cases of COVID-19, said Piter, is by imposing strict PSBB. Although, it cannot be denied that the consequence is that the economy is definitely negative.

"But this is inevitable. The hope is that the tightening of the PSBB can encourage public discipline to comply with health protocols. So that our curve can immediately slope. When that happens, community discipline has also been formed. We can push back the economy in a short time," he said.

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The decision of the Governor of DKI Jakarta Anies Baswedan to strictly carry out Large-Scale Social Restrictions (PSBB) because the number of COVID-19 cases continued to increase was responded by three economic ministers in the Advanced Indonesia Cabinet. They assess that the implementation of this restriction will have an impact on the economy which has just started moving.

The three ministers who said that the PSBB which will be implemented on Monday, September 14 will have a negative impact on the economy, namely the Coordinating Minister for the Economy Airlangga Hartarto, the Minister of Trade Agus Suparmanto, and the Minister of Industry Agus Gumiwang Kartasasmita.

Airlangga said Anies's effort to pull the emergency brake gave negative sentiment to the capital market. He even said that the decision made by Anies affected the movement of the Jakarta Composite Index (IHSG), which had improved. At that time, the JCI in trading on the Indonesia Stock Exchange (IDX) on Thursday, September 10 fell sharply by 5 percent at the level of 4,892.87 or down 257.49 points.

Airlangga said Anies's decision to pull the emergency brake had a huge impact on the economy. This is because, he said, economic performance is not only influenced by fundamental conditions, but also public and public trust.

In addition, Airlangga also disagrees with Anies' decision to prohibit office activities outside the 11 essential fields such as health, food / food / beverage, energy, communication and information technology, finance, logistics, hospitality, construction, strategic industries, basic services, and fulfillment of daily needs.

According to him, not all workers can do work from home. Therefore, he suggested that 50 percent of the offices could still operate.

"We have conveyed that most of the office activities are flexible, about 50 percent at home and 50 percent in offices and 11 sectors remain open because DKI actually carries out the full PSBB," he said.

Not only that, the General Chairman of the Golkar Party did not agree with Anies' statement, which stated that hospital capacity was limited. Although he did not disclose the data, Airlangga ensured that the government's health capacity was not limited, and was available to the community. According to him, the government will continue to add health facilities.

"The government emphasizes that there is no limited health capacity. The government has sufficient funds. The government will increase the bed capacity, the government will assure all regions including DKI Jakarta," he said.

The policy of implementing the PSBB in DKI Jakarta was also criticized by the Minister of Trade, Agus Suparmanto. He said, this PSBB has the potential to disrupt the smooth distribution of goods because of its role in the national distribution flow. So, he wants the supply chain for distribution of goods to and from Jakarta not to be disturbed.

"In the PSBB situation, there are things that should not be hindered, namely the distribution channel. This distribution channel in each PSBB needs to continue to run so that the supply chain is not disrupted," said Agus.

In his opinion, this former social minister also criticized Anies's policies. Agus said, the PSBB policy which will start next week will hamper the recovery of industry and the national economy so that a special approach is needed to reduce this impact.

In addition, there are concerns that the implementation of the PSBB in Jakarta will disrupt the performance of the manufacturing industry, which is starting to gradually recover.

"We see that this already stretching industry will come under pressure again. However, we say that for the government, public health is something that cannot be negotiated," he said.

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