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Coronavirus stimulus should target ‘new poor’ in tourism, transportation sectors: World Bank
Although Indonesia’s support last year provided a meaningful boost amid the pandemic-induced downturn, the government is expected to channel support to the workers in the worst-hit industries.
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Cash in hand: Recipients of social cash assistance await their turn at SD Kelapa Dua Wetan 01 Pagi state elementary school in Ciracas district, East Jakarta, on Wednesday. The Social Affairs Ministry has replaced staple food assistance with Rp 300,000 (US$21.38) cash assistance. (JP/P.J. Leo)
W
hile expanding cash assistance to poor households, the Indonesian government must target people who have lost jobs and incomes during the economic recession caused by the pandemic, according to World Bank economists.
Aaditya Mattoo, World Bank’s chief economist for East Asia and the Pacific, said the pandemic resulted in "new poor" from hard-hit sectors such as transportation, hospitality, retail and trade, some of whom might not be covered by the cash transfer or other in-kind transfer programs.
Although Indonesia’s support last year provided a meaningful boost amid the pandemic-induced downturn, the government is expected to channel support to the workers in the worst-hit sectors.
“One of the problems of Indonesia’s social security setup, while it is great at covering the lower income segments, there is this middle-income segment which has relatively fewer protections,” Mattoo told The Jakarta Post in a video interview on March 25.
Read also: Micro enterprises aid halved for this year, but coverage to be expanded
The government raised the budget for this year’s COVID-19 stimulus by 20.6 percent to Rp 699.4 trillion (US$48.22 billion) from last year’s actualized budget. Of this year’s budget, 27 percent is for small business assistance, 23 percent social protection and 8 percent for business incentives, among other allocations.
It reported last year’s support eased the pandemic’s impact on poverty, resulting in a poverty rate increase of just 0.97 percentage points year-on-year (yoy) to 10.19 percent in September 2020, according to Statistics Indonesia (BPS). This meant 2.76 million people fell into poverty, which was claimed to be less than predicted.
