Encouraging Economic Recovery, Here Are 4 Tips From The World Bank For Indonesia

JAKARTA - The World Bank through the Indonesia Economic Prospects (IEP) report entitled Boosting The Recovery recommends four policies to encourage recovery so that Indonesia can rise from the impact of the COVID-19 pandemic crisis.

"We will discuss priority policies", said Head of the World Bank Representative for Indonesia and Timor, Leste Satu Kahkonen in Jakarta, quoted from Antara, Thursday, June 17.

Kahkonen stated that the pandemic in the past year was able to cause the world to experience a recession reaching 3 percent including Indonesia, although at a smaller level.

He said that Indonesia's recession is smaller than the world's, but millions of people have lost their jobs and their incomes have fallen so that around 3 million people have fallen into a cycle of poverty.

On the other hand, he said the policy response from the Indonesian government managed to avoid worse economic and social outcomes.

However, Kahkonen emphasized that the government still needs other policies to encourage faster recovery, one of which is through four recommendations from the World Bank.

The first recommendation is the government's firmness in fighting the spread of COVID-19 because it will be able to end the health and economic crisis.

This can be done by accelerating vaccination, ensuring that the capacity for testing and tracing is well-supplied, as well as efforts to limit community mobility.

The second recommendation is to maintain the monetary policy and stimulate credit to continue to grow by managing external financial processes.

"Then several programs that provide support such as subsidies and interest rates can also be used to continue to encourage credit", he said.

The third recommendation is to provide fiscal support in the short term while maintaining fiscal sustainability in the medium term.

He explained that the medium-term fiscal strategy will provide fiscal space and increase investor confidence.

"We also need to continue to support poor and vulnerable households and small firms so that the recovery can run well", he stressed.

The last recommendation is to increase the creation of productive employment opportunities for both women and men.

"The pandemic poses a challenge to job opportunities for Indonesia, but in times of crisis we have the opportunity to reform and become better", he said.