Chatib Basri: Indonesia's Economic Recovery Is Like The Nike Logo, Free From Recession In The First Quarter Of 2021

Former Minister of Finance, Chatib Basri. (Photo: Instagram @chatibbasri)

JAKARTA - The COVID-19 pandemic which is still ongoing today has put pressure on the global economy, including Indonesia. Several countries collapsed and entered the economic recession zone. However, there are also those who are gradually recovering, one of them is China. Indonesia is predicted to start recovering in the first quarter of 2021.

Former Finance Minister Chatib Basri said that no economist or international institution can predict economic growth accurately. Even international institutions such as the IMF and World Bank have to revise their predictions.

Chatib said this was not because they did not have the ability, but there were factors that could not be controlled, namely the pandemic itself. Even so, if viewed from the flow, the Indonesian economy has reached its lowest point in the second quarter where it experienced a contraction of 5.3 percent.

According to Chatib, Indonesia's economy in the third quarter may still be negative but not as bad as in the second quarter. If conditions improve, Indonesia's economy can enter the positive zone in the fourth quarter.

"If I see if there is no second wave, I am sure that the first quarter of 2021 can be positive. In fact, if the situation is rather good, the fourth quarter of 2020 could be zero or negative," he said, in a virtual discussion, Wednesday, October 21.

Chatib explained that the total economic recovery could not possibly have a shape like V. According to him, the most likely shape was like the Nike logo or another possible shape like the letter U. If there is a second wave, the recovery will be in the form of the letter W.

"But if the second wave did not occur, maybe we would experience a pattern in the shape of the Nike symbol. So touching the lowest point in the second quarter, it might still be negative in the third and fourth curve, it might be negative or 0 percent," he explained.

However, Chatib said, the direction of this economic movement was largely determined by how the government handled the COVID-19 pandemic. Because, if a pandemic still occurs, like it or not, like it or not, the government must implement health protocols, to avoid spreading the virus.

Furthermore, Chatib said, the 3M health protocol that the government continues to echo, has one of the biggest impacts on the economy, namely maintaining distance. This is because there must be room to provide a safe distance. Thus, the capacity cannot be fully 100 percent.

For example, an airplane that is only given a passenger transport limit of 70 percent of normal conditions, because it has to implement distance guard. Likewise with restaurants that may not be fully filled because they are only given a limit of 50 percent of visitors.

"Now imagine we are in business, but the maximum capacity has been determined to only be 50 to 70 percent. I think it is difficult to reach what is called the break-even point. Even though I have to pay for the electricity in full. Electricians don't care if 5 people or 1 person come, the cost It's the same. People do not care to rent a building or it is full, "he explained.

Because of this condition, said Chatib, companies are at risk of experiencing what is called a zombie company. That is, the company is still alive but not making a profit. The proceeds from the sale are only used to pay debts to the bank.