The government continues to coordinate measures to mitigate the impact of the COVID-19 virus outbreak. The measures must be able to quickly build public trust.
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·3 minutes read
The government continues to coordinate measures to mitigate the impact of the COVID-19 virus outbreak. The measures must be able to quickly build public trust.
Since the first COVID-19 case was announced on March 2, the number of people who have tested positive for the deadly disease has increased to 227 as of Wednesday, while the number of new cases has reached 55. The exponential increase was expected given the nature of the virus, which is easily transmitted from person to person, and the experience of other countries.
Since it was formed by President Joko “Jokowi” Widodo on March 13 , the Task Force for the Acceleration of the COVID-19 Handling has coordinated on various activities related to medical and economic management.
We hope the improved coordination will be able to calm the public and the market.
On the fiscal side, the government has issued two economic stimulus packages, which include an increase in non-cash food assistance for the poor to Rp 200,000 (US$12.57) per a family per month for six months and the assistance for workers, to maintain the purchasing power of the middle- to lower-income communities and poor people.
To help the business world, the government has also eased corporate income tax and import tax payments for certain business sectors and accelerated the process of receiving tax refunds. The government also plans to increase the ratio of the state budget deficit to gross domestic product (GDP) to 2.5 percent from the initial estimate of 1.76 percent. The government has also eased the ban on exports and imports on certain commodities.
We hope the improved coordination will be able to calm the public and the market. On Wednesday, the Jakarta Composite Index (JCI), the main price indicator on the Indonesian Stock Exchange (IDX), fell by another 4.33 percent to 4,330 at the close of the trading amid growing fears of the spread of the deadly novel coronavirus. The fall was in line with a decline in share prices in other Asian stock markets.
Meanwhile, according to Bank Indonesia’s (BI) Jakarta Interbank Spot Dollar Rate, the rupiah sharply fell to 15,223 per US dollar from 14,413 per US dollar on March 2.
However, we also need to be self-critical in evaluating whether all government measures have been able to address the concerns of the ordinary people and businesses.
To ensure the availability of basic food for the people, for example, the Food Task Force has to limit purchases and traditional markets and modern stores. The limitation can raise concerns about food supply and encourage residents to buy up food. The government, therefore, needs to maintain supply chains and intensify market operations.
The government will issue another fiscal stimulus package as the state budget is shifted and focused on the handling of health, social protection and helping businesses maintain their cash flow.
The government\'s efforts to maintain macroeconomic conditions and to build investor confidence will be assessed by the market, especially after the government decides to increase the state budget deficit.
For this reason, the government needs to give a firm signal that the COVID-19 outbreak is a serious problem and mitigation measures in various avenues are implemented in line with the serious impact of the disease.