JAKARTA, 27 May 2020 – Indonesian officials are drawing up plans for a gradual exit from strict social distancing measures, betting the return to a new normal will pave the way for a V-shaped recovery for Indonesia which is Southeast Asia’s biggest economy.
The government is drafting a new health protocol for reopening of industrial estates in regions where the Covid-19 pandemic is under control, Coordinating Minister for Economic Affairs Airlangga Hartarto said today. Modern and wet markets, tourist sites and transport may follow industrial clusters in resuming operations, he said.
Like many countries, Indonesia is battling a surge in cases and deaths from Covid-19, as well as a massive economic hit on the back of strict social distancing rules that have hampered commerce. Growth is expected to plunge to 2.3% this year with officials warning the economy may contract under a worst-case scenario.
“What we hope is for Indonesia to come out of this crisis with a V-shaped recovery or at least a U-shaped one,” Hartarto said at a briefing in Jakarta after a Cabinet meeting to review preparations for easing mobility restrictions. The country must prepare for “a new normal” by strengthening the health system and adjusting economic activities, he said.
While the government will take steps to mitigate the spread of the virus, protecting jobs must also be at the heart of its policy response, Hartarto said. Indonesia’s capital Jakarta, mining belts of Bangka Belitung, North Kalimantan and West Kalimantan and tourist destinations such as Bali and and Yogyakarta are among regions where the pandemic is under control and ready for the new normal, he said.
Heavy toll
With the Covid-19 pandemic taking a heavy toll on the economy, the government has taken unprecedented emergency fiscal measures, abandoning a budget deficit ceiling of 3% of gross domestic product as it accelerates spending to counter the pandemic. It has announced stimulus packages totalling US$43 billion (RM186.95 billion) to cushion the impact of the outbreak that’s forecast to shrink the economy 0.4% in a worst-case scenario.
The government may reopen the economy in four phases and the world’s largest Muslim-majority country may also gradually allow reopening of places of worship and religious gatherings, officials said. Authorities will reimpose social distancing rules in the event of a spike in new cases in areas exiting partial lockdowns, Indonesia’s Covid-19 task force chief Doni Monardo said.
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