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Jakarta Post

Raising our game to overcome the COVID-19 crisis

  • Suahasil Nazara and Ahmed M. Saeed

    The Jakarta Post

Jakarta/Manila   /   Mon, March 1, 2021   /   01:20 am
Raising our game to overcome the COVID-19 crisis New hope: Elderly people sit distanced from one another as they wait their turn for pre-COVID-19 vaccination screening at a community health center in Palmerah, West Jakarta, on Thursday. The government aims to inoculate some 21 million people aged 60 and above and 17 million public service and essential workers in the second phase of vaccination, which started on Feb. 17. (JP/Ardila Syakriah)

Sports journalist David Epstein’s bestselling book, Range, begins with the story of tennis great Roger Federer, who arrived at the pinnacle of his profession after a wandering journey through “basketball, handball, tennis, badminton over his neighbor’s fence and soccer”.

Epstein argues that Federer achieved greatness precisely because he had the breadth of experience needed to innovate and adapt.

Epstein decries the cult of specialization, which he describes as dividing the world into “parallel trenches”, in which “everyone is digging deeper into their own trench and rarely standing up to look in the next trench over”.

While the message is directed at individuals, it holds equally true for governments and development finance institutions such as the Asian Development Bank (ADB), especially amid an unprecedented pandemic.

This crisis demands an innovative and interdisciplinary response. The Finance Ministry and ADB have taken measures to break the constraints imposed by silos of narrow expertise and reacted quickly in new and innovative ways to address COVID-19.

For example, the early and unprecedented fiscal stimulus enacted by the government in 2020 reflected precisely the kind of innovative thinking needed in the early stages of pandemic-induced lockdowns. The government quickly obtained lawmakers’ approval to raise the deficit to 6.34 percent of gross domestic product (GDP).

Equally, if not even more ground-breaking, was the effort to enlist Bank Indonesia’s (BI) support for the government’s fiscal response through a temporary burden-sharing agreement to finance public goods.

The ADB responded similarly by creating a new US$20 billion policy support instrument to address COVID-19-related fiscal costs in Asia and the Pacific, $1.5 billion of which was disbursed to Indonesia. With this budget support, ADB’s sovereign operations in Indonesia rose to $3.4 billion in 2020, the highest ever, and the total disbursed budget support to Indonesia from all development partners reached $6.9 billion.

This collaboration between the Finance Ministry and development partners paved the way toward the $47 billion COVID-19 response (PEN) budget that helped more than 71 million people and 12 million micro, small and medium enterprises (MSME) withstand the first wave of pandemic impacts.

This crisis is uniquely interdisciplinary and has forced policymakers to make decisions that incorporate input from a broad variety of fields, including public health and economics.

Recognizing this challenge, ADB stepped up its engagement on policy issues, collaborating with international experts to host dialogues for the government on fields as diverse as supply chain risks for critical food items, medical supplies, MSME recovery, the survival of tourism, the use of big data to support social assistance delivery and vaccine distribution.  

Looking ahead, we will need to build on the current collaborative approach. The challenges ahead include managing the potential pandemic escalation, implementing vaccination strategies and charting economic recovery. Complementing its successful measures to secure the urgently needed financing for pandemic response, the government has developed sound and in many ways game-changing strategies and policies to ensure equitable access to vaccines for all Indonesians, as well as to accelerate economic recovery.

The government has allocated about $3.4 billion for vaccine procurement in 2021. Through its early and anticipative purchases, the government secured more than 329 million doses of vaccines from various producers as of January. By the end of 2021, the government aims to vaccinate about 182 million Indonesians.

This ambitious move will help keep people safe, create herd immunity, as well as bolster the confidence of the people and markets. To this end, ADB will continue to seek ways to support Indonesia’s vaccine rollout; for example, through its new $9 billion facility for vaccine access across Asia.

As daunting as the current situation may be, as we emerge from the COVID-19 crisis, it is imperative that we look ahead and at ways to build back better. We must now begin to lay the foundation for a resilient, smart and green recovery. Climate challenge, more so than anything else, will force a continuation of the broad and interdisciplinary approach characterized by the response to the current crisis.

We will, for example, need to work together in order to scale up ADB’s support for the development of a green recovery framework and innovative capital market instruments such as transition bonds and sustainability linked bonds.

The process of “building back better” will also help us deepen structural reforms in areas such as competitiveness, reducing investment barriers and upgrading the country’s manufacturing capacity, as reflected, for example, in the government’s innovative structural reforms to attract investment, promote private sector participation and accelerate growth.

The Job Creation Law, for example, was designed to simplify more than 70 prevailing laws and regulations to consolidate licensing powers, adopt a risk-based business licensing process, encourage foreign investment and establish a facilitative framework for MSMEs’ business establishment and operations.

These efforts may be made more difficult by a fiscally constrained backdrop, and the government will, therefore, move forward with even greater urgency to reform domestic resource mobilization and international tax cooperation. The government has already been forward-looking in anticipating the growth of information technology-based industries and has started to tax online businesses while actively participating in setting global standards on digital taxation.

With Indonesia’s support, ADB is establishing a new regional hub focused on these issues. Indonesia’s multilateral partners play a crucial role in helping the country address this, as well as the critical recovery and other development issues.

By taking an innovative, collaborative and interdisciplinary approach, the government and ADB can help Indonesia emerge stronger from the pandemic and set the country on its path to achieving Vision 2045. We have already made great progress together toward this goal, but more effort will be needed in the months and years ahead.


Suahasil Nazara is Indonesia’s deputy finance minister. Ahmed M. Saeed is Asian Development Bank vice president for East Asia, Southeast Asia and the Pacific. All views expressed are personal.