Indonesia Recession, Kadin: Government Obliged To Provide BLT To Encourage Purchasing Power

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - The Indonesian Chamber of Commerce and Industry (Kadin) said that if Indonesia experienced a recession, the business world would be more difficult. Therefore, the government was asked to provide direct cash assistance (BLT) to boost people's purchasing power.

Deputy Chairperson of the Chamber of Commerce and Industry (Kadin) for CSR and Business Competition, Suryani S Motik, said that direct cash assistance had more of an impact in boosting purchasing power compared to social assistance in the form of goods.

Furthermore, Suryani said that if the government provided assistance in the form of goods, economic movement would only occur at the industrial level. Meanwhile, at the community level it did not happen.

"To encourage the purchasing power of the people at the lower levels, the government likes it or not, to provide direct cash assistance. Do not give aid in kind again, because BLT is capable of increasing purchasing power," he said in a virtual discussion, Wednesday, November 4.

In times of crisis like today, said Suryani, direct cash assistance really helps the middle class to survive.

Suryani said, at the upstream level, the government must also continue the stimulus that has been given until 2021. Then, also revise the stimulus. The goal is to ensure safety nets are on target amid uncertainty over when the pandemic will end.

"We do not know when the pandemic will peak. Will there be a second wave, when it will end, what is clear is that 2021 the nuance is still survival, the mood is still recession. Therefore, it is necessary to continue with the stimulus," he said.

In economics, a country can be called a recession if its economy is negative for two consecutive quarters. In the second curve, Indonesia experienced a deep contraction, namely 5.3 percent. If in the third quarter the economy was still in the negative zone, then Indonesia officially entered the brink of recession.

As is known, in the third quarter of 2020, the Ministry of Finance projects economic growth of between minus 2.9 percent to minus one percent. Meanwhile for the whole of this year, the economy is estimated to be between minus 1.7 percent to minus 0.6 percent.