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Jakarta Post

COVID-19: Well-prepared emergency status, lockdown keys to protecting economy, economists say

  • Made Anthony Iswara

    The Jakarta Post

Jakarta   /   Tue, March 17, 2020   /   02:39 pm
COVID-19: Well-prepared emergency status, lockdown keys to protecting economy, economists say An aerial photo shows a micro, small and medium enterprises center in the Mandalika special economic zone in Central Lombok, West Nusa Tenggara. (Antara/Ahmad Subaidi)

Economists are calling for a well-prepared lockdown and an emergency status declaration to further save the country from widespread COVID-19 coronavirus infections and soften hard-hitting effects on the economy.

Senior economist Faisal Basri wrote on his twitter account (@FaisalBasri) that the government should halt construction of its new capital and "unite all the nation's power" instead.

"To save Indonesia, the President has to immediately declare an emergency war against the coronavirus. That is also the key to save the economy," Faisal wrote.



The country has yet to set a national emergency status. However, Banten and Tangerang in West Java and Surakarta in Central Java are among those that have already declared extraordinary occurrence (KLB) statuses. Jakarta and Surakarta have both closed their schools as Jakarta mulls over a lockdown plan.

Read also: Regions close schools, cancel public events because of COVID-19

Center of Reform on Economics (Core) Indonesia research director Piter Abdullah said that authorities should meticulously plan a lockdown before executing one, as quoted by Kontan. He said that an unprepared lockdown could hurt the informal players and producers as the move could diminish resources used for production. Such unpreparedness would make the recovery take longer and the negative economic impacts worse, he said.

He said the government has seemed hesitant about taking drastic measures to save the economy as it faces a dilemma between fighting the coronavirus and saving the economy, citing several stimulus packages as an example.

Indonesia announced last Friday it is allocating Rp 120 trillion from the state budget to stimulate the economy through tax incentives and subsidies for workers, businesses and families affected by the global COVID-19 pandemic.

The second stimulus package announced on the same day, worth Rp 22.9 trillion, would include individual and corporate tax breaks, as well as relaxation of loans disbursement and restructuring. These add to a Rp 10.3 trillion stimulus package announcement on Feb. 25 that boosts staple needs and mortgage subsidies for low-income families and fiscal incentives for travel-related industries.

The government would also speed up disbursement of social spending in the first quarter, as well as the new training subsidies connected to the pre-employment card this month.

"If we're going to execute a lockdown, its impact will certainly be significant, as if we are turning the economy off. All of this needs to be anticipated and prepared with solutions," he said.

He said President Joko "Jokowi" Widodo's latest appeal for people to stay at home has failed to take shape in several regions since companies and government offices are still open, resulting in congested public transportation.

In his first national address on the COVID-19 outbreak last Sunday, the President highlighted the importance of practicing what is called “social distancing” to stop the spread of the coronavirus that has already claimed thousands of lives worldwide.