The National Development Planning Ministry’s (Bappenas) undersecretary for maritime affairs and natural resources, Arifin Rudiyanto, said the ministry would focus on a green fiscal stimulus program especially in three areas: energy, waste management and labor-intensive farming.

“To accelerate Indonesia’s green economy transformation, the country could start by having a green fiscal stimulus plan that can be the foundation for long-term economic growth,” he revealed in a recent discussion hosted by Greenpeace Indonesia.

Arifin went on to say that, in the energy sector, the ministry was targeting to install rooftop solar panels at 70 ministries or government institutions with a Rp 210 billion (US$14.5 million) budget.

The solar panels were estimated to save 15 million kilowatt-hours (kWh) of electricity per year, or Rp 22 billion in electricity bills, and to reduce greenhouse gas emissions by 339,624 tons within 25 years.

Last year, the government had announced a program called the Solar Archipelago (Surya Nusantara), which aims to provide rooftop solar panels for millions of poor households over the next four to five years.

Read also: Indonesia working on $1b solar-driven green economic recovery scheme

The government also announced a planned stimulus for labor-intensive farming that could increase harvesting by up to 17 percent, or Rp 25 trillion per year, and create 151,000 jobs by 2022.

It would also give stimulus to 5,000 small and medium enterprises (SMEs) in the waste recycling sector in the hopes of creating up to 75,000 new jobs and increasing daily recycling capacity to 40,000 tons.

“However, we realize that there is still a [lack of] green investment in Indonesia. This is where the private sector can join and increase [its] green investments,” he said.

Read also: Regulatory reform key to post-pandemic green energy investment, IEA says

Countries around the world have been offering green stimulus funds amid the pandemic, such as Denmark, Canada and France, which lead the Greenness of Stimulus Index (GSI), according to a study released by management consulting company Vivid Economics.

The index measures the effect of G20 countries’ COVID-19 stimulus in “green sectors”, such as agriculture, energy and waste management.

Indonesia scored negative on the index, ranking below India, Brazil, South Africa and other countries. Indonesia’s low GSI is partly driven by the Job Creation Law, which critics have warned has a negative effect on the environment.

Institute for Development of Economics and Finance (Indef) executive director Berly Martawardaya quoted the study, noting that only 0.3 percent of Indonesia’s COVID-19 stimulus was considered to have a positive and lasting impact on the environment, while 92 percent of the stimulus was non-environmentally relevant.

“It seems like the green sectors, especially energy, waste management and lower-emission transportation, have yet to become an important part of the mid- and long-term [economic] recovery plan,” he told The Jakarta Post on Tuesday.

Berly went on to say that that Indonesia’s economy and energy were heavily reliant on natural resources, and if its natural resources were to be damaged, it would be difficult for Indonesia's economy to recover, let alone become a competitive country.

He also said that the state budget portion for the “low carbon” sector has been decreasing over time to Rp 23.4 trillion in 2020 from Rp 34.5 trillion in 2018 and now only made up around 1 percent to 2 percent of the total state budget.

“We need to learn from China and South Korea, which invested a lot in energy, waste management and transportation for their 2009 recovery stimulus, which then boosted their economic transformation,” Berly concluded.

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