The Government Implements The Java-Bali PPKM, How's The National Economy Fate?

Illustration (Pixabay)

JAKARTA - The government's decision to issue a policy to enforce restrictions on community activities (PPKM) on the islands of Java and Bali will have an impact on the national economy. However, the impact is not only negative, but also positive.

This new policy will take effect from 11-25 January 2021 or for two weeks. The restriction was carried out after the increase in the number of cases in Indonesia was getting higher and there was a new variant of COVID-19.

Coordinating Minister for the Economy, Airlangga Hartarto said, although there were restrictions on community mobilization on the islands of Java and Bali, the government was optimistic that the economy this year would continue to grow.

"First, for the first quarter it has only been 7 days. Of course we will see the balance between health and socio-economy running," he said, in a virtual press conference, Thursday, January 7.

Indicators that encourage the government to be optimistic that the country's economic movement will continue to grow despite the PSBB, among others, is the Jakarta Composite Index (IHSG), which strengthened to the level of 6,128. In the morning trading session on Wednesday, January 6, the JCI had dropped, but again rose after the government explained the new PSBB policy.

Meanwhile, the rupiah exchange rate against the dollar at 09.04 WIB also strengthened 16 points or 0.12 percent. The rupiah against the US dollar was at Rp13,880. One of the reasons for the strengthening of the rupiah was the sentiment at the meeting of the Central Bank of the United States (US) which will discuss maintaining interest rates and providing stimulus.

Airlangga said, Indonesia's purchasing manager's index (PMI) in December 2020 also recorded an increase at the level of 51.3 percent. On the other hand, prices for a number of commodities also experienced improvement. "With these beliefs, we are quite optimistic. The projection until the end of the year is in the range of 5 percent," he said.

The Chairperson of the Committee for Handling COVID-19 and National Economic Recovery (KPC-PEN) emphasized that PPKM in a number of districts / cities in Indonesia was carried out as an intermediate and long-term step for the domestic economy. He guaranteed that the policy would still pay attention to the socio-economic conditions in society.

"So it is not a daily step. This government pays attention to the needs of the community. Of course the main thing is health. Both governments are present both in the social and economic sectors of the community. We are still optimistic and we will see in the first quarter," he said.

The economy will be worse if PPKM is not implemented

Finance Minister Sri Mulyani Indrawati said Indonesia's economy would be worse off if the new restrictive policies or PPKM in the Java and Bali regions were not implemented. He realized that this new restrictive policy would have an impact on economic growth in 2021.

"If that is not done and getting worse the economy will also be worse, so there are not too many choices," said Sri Mulyani, during a virtual press conference on the realization of the implementation of the 2020 State Budget, Wednesday, January 6.

However, Sri Mulyani admitted that she could not predict how much the decline in economic performance would be due to this policy. The reason is, his party still has to see the progress of the implementation of the policy.

Indonesia's Economy Could Recover This Year

The 6th President Susilo Bambang Yudhoyono (SBY) said, Indonesia still has a way to succeed in 2021. This means that there is a chance for the economy to recover this year. However, of course, after the government has succeeded in dealing with the COVID-19 problem.

SBY said, opportunities for success or could be linked directly to what are the challenges and problems currently being faced. If we can solve the nation's main problems in 2021, this good opportunity will become a reality.

For that, he said, the government must be able to identify the main chain of problems for this nation. After that, focus and mobilize all available resources to overcome it. Of course, proper government policies and effective planning and implementation are essential. Likewise, management and leadership at all levels, throughout the country, are also critical to the success of this great work.

"In my opinion, the nation's main challenges and problems are, first, the COVID-19 pandemic which must be resolved immediately. Second, the economic crisis must be ended and then the economy is restored," he said, quoted from his official Facebook account, Friday, January 8.

Handling COVID-19 is important and will greatly determine economic growth in 2021. So, the government's decision to issue a PPKM policy on the islands of Java and Bali to suppress the spread of COVID-19 might be considered appropriate.

In addition, SBY also reminded the public not to think that everything will recover by itself after the COVID-19 vaccine.

"All of this does not come from heaven. Do not take a 'take for granted' attitude, as if a good opportunity will come by itself. For example, don't because the vaccine has arrived, the pandemic will soon disappear. After that our economy will recover and even skyrocket. . Don't behave and think like that. God doesn't like it, "he said.

IMF projected that Indonesia's economy will only grow 4.5 percent throughout 2021

The International Monetary Fund (IMF) projects that Indonesia's economy will grow by 4.8 percent this year. This figure is trimmed from the previous projection of 6.1 percent. Despite this, the economy is still in the positive zone.

IMF Mission Chief for Indonesia Thomas Helbling said the Indonesian economy actually started to recover in the third quarter of 2020. The national economy is predicted to be more positive this year.

"Indonesia responded with a bold, comprehensive, and coordinated policy package to address the socio-economic difficulties caused by the COVID-19 pandemic. Timely policy intervention also helps macro financial stability," Helbling said in an official statement, quoted on Friday, January 8.

Helbling is optimistic that Indonesia's economy will get better this year until 2022. If this year it is projected to grow by 4.8 percent, the IMF predicts that next year's economy will reach 6 percent.

"Guided by strong policy support measures, including plans for the distribution of the COVID-19 vaccine, improving the global economy, and financial conditions," he said.