Coordinating Minister Airlangga Asks Local Government To Always Respond Quickly To Maintain Economic Recovery Momentum

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Doc. Coordinating Ministry for the Economy)

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto said strong coordination and a quick response from local governments were needed to maintain the momentum of economic recovery.

"Strong coordination is needed to answer various challenges. Quick responses from all parties are needed to be able to maintain the momentum of national economic recovery," he said in an official statement, quoted from Antara, Monday, June 20.

Currently, he said, the world is facing various challenges which the United Nations calls The Perfect Storm. The challenges are COVID-19, Conflict, Climate Change, Commodity Prices, and Cost of Living. The World Bank cut its forecast for global economic growth in 2022 to 2.9 percent from the previous 4.4 percent, mainly as a result of the geopolitical conflict between Russia and Ukraine.

Nevertheless, Indonesia's external sector indicators still show solid resilience. This is reflected in the trend of a trade balance surplus for 25 consecutive months, and the ratio of Indonesia's external debt to GDP is at a safe level.

Airlangga said that the improving economic outlook will help maintain public and investor confidence, so that it can encourage national economic activities, even in the current state of global uncertainty.

"We will also use the momentum of the Indonesian G20 Presidency in 2022 as well as possible to encourage economic recovery and transformation," he said.

In the midst of various risks of escalating global uncertainty, the Government continues to carry out the COVID-19 Handling and National Economic Recovery (PEN) program. With regard to the allocation of PEN, the Government pays serious attention to the MSME sector. Increasing access to financing is one of the MSME development strategies, including through the People's Business Credit (KUR) financing program.

"We really appreciate the role of the Regent and Mayor for their support for the distribution of various KUR schemes in their respective regions in 2022. So that the total realization of national KUR distribution until May 31, 2022 is IDR 147.7 trillion or 39.6 percent of the target that has been given to 3.18 million debtors," he said.

In particular, in order to increase agricultural productivity, the Government has issued a KUR program for the agricultural sector with a ceiling of IDR 90 trillion and IDR 46.6 trillion or 51.8 percent of the target has been disbursed.

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Meanwhile, realizing that infrastructure is a vital component in promoting economic recovery, the Government will continue the National Strategic Project Program (PSN) in 2022.

Since 2019, the Indonesian people have benefited from the operation of several PSN infrastructures, such as the Palapa Ring Broadband project which increases access to network connectivity to more than 500 regencies/cities in Indonesia, the operation of the 543 km Trans Sumatra Toll Road as part of efforts to accelerate the development of Sumatra, the construction of 18 Strategic Dams to improve food security, as well as the operation of a Clean Water Supply System that serves more than 2 million people.

"In order for PSN development to be optimal, it is hoped that each region can identify leading sectors that have the potential to leverage the economy and support the optimization of National Strategic Projects, especially at the Regency/City level," said Airlangga.

Some examples of forms of support in optimizing PSN in districts/cities include the development of industrial, tourism and economic zones along the Trans Sumatra and Trans Java toll roads, widening and repair of regional roads around the exit access of the PSN toll road, as well as support in accelerating the issuance of permits, land acquisition for regional government assets, village treasury land, and other administrations.