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Govt to set up cash transfer mechanism before imposing quarantine
President Joko “Jokowi” Widodo’s Cabinet is currently deliberating such a mechanism to cushion the economic impact of the quarantine policy on the poor, who are prone to financial risk once the restriction takes place.
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Customers shop at Gondangdia Market in Jakarta on March 31. Several vendors in traditional markets have reported a 70 to 80 percent drop in earnings as the government urges citizens to stay at home. (JP/Seto Wardhana)
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egional quarantines to prevent the spread of COVID-19 will only be imposed when the government has prepared a mechanism to distribute social assistance for impoverished citizens, Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan has said.
President Joko “Jokowi” Widodo’s Cabinet is currently deliberating such a mechanism to cushion the economic impact of the quarantine policy on the poor, who are prone to financial risk once the restriction takes place.
“The President keeps saying that the poor should not endure additional difficulties, owing to the fact that the President himself was also less-fortunate when he was young,” Luhut said during a press briefing on Tuesday.
Read also: Jokowi declares COVID-19 health emergency, imposes large-scale social restrictions
“The finance minister is now calculating how much we should add to the budget for social-assistance programs for those who will be affected the most by the quarantine.”
The government had previously determined that underprivileged citizens would receive cash transfers (BLT). However, Luhut said it was still deliberating whether the assistance would be given to 20 or 40 percent of the overall low-income families across the country.
He went on to say that such disbursements might also cause the state budget deficit to surpass the 3 percent threshold of gross domestic product (GDP) as mandated by the 2003 State Budget Law.
According to this year’s state budget plan, the government aimed to keep the state budget deficit at 1.76 percent of GDP – lower than the 2019 realization of 2.2 percent.
The government is currently drafting a government regulation in lieu of law (Perppu) to allow a fiscal deficit exceeding the 3 percent ceiling.
“We will put a provision in the upcoming Perppu allowing us to widen our fiscal deficit for three years starting from 2020. Therefore, the deficit will return to 3 percent by 2023,” said Luhut.
Read also: Indonesia announces Rp 405 trillion COVID-19 budget, anticipates 5% deficit in historic move
Once the mechanism has been completed, the government will impose health quarantines in the regions hardest-hit by COVID-19.
“We won’t call it a lockdown because we only acknowledge a quarantine as stipulated in the 2018 Health Quarantine Law. We don’t want to be hasty about implementing the regulation. Everything has to be calculated thoroughly,” the coordinating minister said.
Despite an increasing number of confirmed COVID-19 cases, the government has been adamant against calling a lockdown to prevent the disease from spreading further. Indonesian health authorities confirmed 1,528 COVID-19 cases across the country on Tuesday, with 136 deaths and 81 recoveries. (glh)
