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Indonesia raises spending for COVID-19 as G20 pledges coordinated response
The Finance Ministry identified Rp 62.3 trillion of spending in the 2020 state budget that could be reallocated to contain COVID-19 on top of the Rp 120 trillion provided by the government to disburse stimulus packages.
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Former vice president Jusuf Kalla greets Finance Minister Sri Mulyani with a COVID-19 style handshake at a meeting at the vice presidental office in Jakarta on March 12. (Instagram/jusufkalla)
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ndonesia is preparing new measures that include cash transfers for underprivileged families and laid-off employees affected by COVID-19 and fundraising for health care, as the G20 nations pledge a coordinated response to the coronavirus to prevent spillover effects on the economy.
Finance Minister Sri Mulyani Indrawati said the government was considering raising the amount of social funds for more than 15 million underprivileged families, adding the government would also roll out a training program and provide Rp 1 million (US$ 61.24) for laid-off employees for three months.
“We will help our communities to survive and receive essential goods while also obeying the government’s policy to reduce activities to contain the spread of the virus,” Sri Mulyani told reporters in a teleconferenced briefing on Tuesday following a meeting with finance ministers and central bankers of the G20 nations.
Sri Mulyani said the government was also considering raising its budget deficit limit from the current 3 percent of gross domestic product (GDP), which would enable the government to raise more loans to finance social spending.
The government will, for example, provide cash transfers to informal workers and nearly double health spending to 1.5 percent of GDP from 0.8 percent.
“We will not be constrained with a 3 percent budget deficit since we are focused on maintaining public health and minimizing the risks of individuals and businesses going bankrupt,” Sri Mulyani said
President Joko “Jokowi” Widodo said Tuesday the government wanted to relax a limit on the state budget as it faced financial strains from the COVID-19 response. “We have been discussing this in the past few days and I have met with the House speaker to get political support.”
