Jokowi Asks For Not Minus Economic Growth, How Can You Do It?

JAKARTA - President Joko Widodo (Jokowi) assesses that the biggest challenge at this time is preparing an appropriate and fast economic recovery program so that the rate of economic growth is not further corrected. This is to prevent massive layoffs (PHK) during the pre-COVID-19 period.

Jokowi explained that in the first quarter of 2020 the Indonesian economy was only able to grow 2.97 percent. So, it needs to be handled so that in the next quarter the Indonesian economy does not go into freefall.

"We must be able to hold back so that the rate of economic growth does not decline further. Not to a minus and we even hope that slowly we can start to rebound or turn up," he said, in a virtually limited meeting, Wednesday, June 3.

Furthermore, Jokowi also requested that all economic recovery schemes that have been designed, such as interest subsidies for MSMEs, placement of funds for banks affected by restructuring, guarantee working capital loans, then state capital participation for BUMN and government investment for working capital, immediately walk on the field.

"I hope, I ask, and I want to make sure that the field operations must be immediately implemented in the field," he said.

According to Jokowi, the national economic program must be able to provide real benefits to business actors, especially the labor-intensive sector, in order to be able to operate.

"This is important and prevents massive layoffs and is able to maintain the purchasing power of its employees. The labor-intensive industrial sector needs to be a concern," he explained.

Jokowi assessed that the labor-intensive sector is a sector that absorbs a lot of labor. Therefore, it should be noted. Because, if not, it will have an impact on the community's economy.

"Be careful once again for labor-intensive industries, because this sector accommodates a large number of workers. Shocks in this sector will have an impact on workers and of course the economy of their families," he said.

According to Jokowi, the concept of sharing burdens must be a common reference between the government, BI, OJK, banks and business actors in carrying out economic recovery from the COVID-19 problem.

"I ask for the concept of sharing the burden. It has to be really willing to bear the burden, work together, be willing to share the risk proportionately and be implemented with the principle of prudence," he said.

Jokowi assessed that this concept is important to implement so that business actors, corporations can continue to run, massive layoffs can be prevented, and the financial sector can remain stable and the wheels of the Indonesian economy can be maintained.

Not only that, Jokowi also reminded that economic recovery must be carried out prudently, transparently, accountably, and able to prevent the risk of moral hazard.

"This is very important. I asked the Attorney General, BPKP, from the start to provide assistance to LKPP and if needed, the KPK could also be involved with intelligence to strengthen the prevention system. This is important," he said.

Jokowi admitted that the 2020 State Budget (APBN) deficit was widening. One of the influencing factors is the handling of the COVID-19 disease which is still being carried out today.

Jokowi also reminded his assistants in the economic sector to make careful calculations regarding changes in the posture of the 2020 State Budget. Because changes in budget posture will have an impact on increasing the deficit.

"To the Coordinating Minister for Economic Affairs, Minister of Finance Sri Mulyani, the Head of Bappenas has carried out more careful, detailed, and mature calculations on future fiscal risks," he said.

In addition, Jokowi asked for transparency in the change in the posture of the State Budget. This is important to do so that the use of state money is accountable.

"I want to emphasize again that the change in the posture of the APBN is carried out carefully, transparently, accountably, so that the 2020 State Budget can be maintained, can be trusted and remain credible," he said.

As is known, the government has changed the posture of the 2020 State Budget in order to implement refocusing and budget reallocation. This amendment is contained in Presidential Regulation (Perpres) Number 54 of 2020 concerning Posture Changes and the State Revenue and Expenditure Budget for the 2020 Fiscal Year.

Most recently, the Ministry of Finance has issued a deficit projection. The 2020 state budget deficit is projected to be 6.27 percent or wider than the previous prediction stated in Presidential Decree Number 54 of 2020. In accordance with the regulation, the government says that the APBN deficit is 5.07 percent of GDP or IDR 852.9 trillion.