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Planned consumer stimulus faces lack of policy coordination
People and institutions responsible for implementing the stimulus measures were left without knowledge of the plan. Such a lack of coordination could dampen the effectiveness of the policy, which is intended to boost the economy.
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Coordinating Economic Minister Airlangga Hartarto (left) and his interpreter (right) stand before the press in his Jakarta office on Aug. 5, 2024, to answer questions about Indonesia's gross domestic product growth in the second quarter of 2024. (JP/Deni Ghifari)
T
he government has lined up a flurry of consumer stimulus measures that are to take effect this week, but people and institutions responsible for implementing the measures were left without knowledge of the plan. Such a lack of coordination could dampen the effectiveness of the policy, which is intended to boost the economy.
The stimulus package is to begin on June 5 and last until the end of July, with some of the measures applying just during the school holidays.
The initiative was first unveiled by Coordinating Economy Minister Airlangga Hartarto on May 23 and the goal is to ensure the economy can grow more than 5 percent in the second quarter of 2025 after the first quarter experienced the slowest growth since the third quarter of 2021.
The stimulus measures cover discounts for train, flight and ferry tickets, as well as tolls. They also include a 50-percent electricity discount for June and July, similar to what the government granted in January and February, albeit with fewer recipients.
The other three areas are social aid in the form of food and rice, wage subsidies for low-income earners and a discount on work accident insurance’s monthly premium for workers in labor-intensive industries.
The Energy and Mineral Resources Ministry, which should be involved in the formulation, however, was unaware of the move, according to Bisnis.com.
“I don’t know whether there’s already [a discussion] on the technical [level] or not, I don’t know yet. One thing’s for sure; I still haven’t received the report until today,” energy minister Bahlil Lahadalia said on May 26, or around 10 days before the policy’s planned implementation.
