Chatib Basri: As Long As COVID-19 Has Not Disappeared, There Will Be No Signs Of Economic Recovery

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - Economist Chatib Basri estimates that Indonesia's economy will recover from 2022. However, this estimate is strongly influenced by how the government can overcome the problem of the COVID-19 pandemic in the country.

"My guess is that if we make a simple calculation about vaccines and various kinds of our economy, it will normalize in 2022. That is where we can talk about expansion, private investment and all kinds," he said, in a virtual discussion, Monday, November 9.

Currently, said Chatib, the Indonesian economy is still in a survival phase, even though economic growth has started to show improvement from the second quarter which contracted 5.32 percent to 3.49 percent contraction in the third quarter of 2020.

Furthermore, Chatib said, when the pandemic has been resolved, only then can we talk about recovery. At present, there is no sign that the Indonesian economy is heading for recovery.

The former Minister of Finance said that during this period of survival, business actors would not expand their business because there were still restrictions on economic activity. For example, a restaurant, where currently only 50 percent of visitors are allowed.

"For what purpose is a new restaurant expansion, if the existing place is not yet full because there are still restrictions," he said.

When the economy begins to recover and return to normal in 2022, Chatib Basri said it is estimated that new private investment will increase.

"If vaccines need time in 2021, I am not sure private investment will increase sharply in 2021 because the protocol is still in place. Therefore, the recovery process, where investment increases, is the period after economic conditions begin to normalize," he said.

Therefore, said Chatib, the government has an important role in providing incentives to businesses when investors start to enter when the economy begins to recover. Especially for business actors who have green projects or environmentally based sustainable development.