The government plans to relax large-scale social restrictions (PSBB) in June.
By
ENNY SRI HARTATI
·6 minutes read
BIRO PERS SEKRETARIAT PRESIDEN
President Joko “Jokowi” Widodo asks for health protocols and new SOPs to be put in place in the world of tourism. This was disclosed by the President in a meeting related to tourism in the so-called new normal era. The meeting was held online at Merdeka Palace on Wednesday (28/5/2020).
The government plans to relax large-scale social restrictions (PSBB) in June. The government has urged the Indonesian people to make peace with COVID-19 and prepare for new normal conditions and adopt a healthier lifestyle that includes wearing a mask, frequent handwashing and using hand sanitizer. This new approach can restart the wheels of the economy so the entire country can move forward and stay safe from COVID-19.
Theoretically, the government can require companies and government institutions to meet standard operating procedures for COVID-19 protocols. However, if the number of COVID-19 cases continues to increase, the easing of PSBB measures will not be that simple. Moreover, if the public mistakenly belief that health conditions have returned to normal, with low public awareness, this can backfire and may even increase the transmission of COVID-19.
Based on data from the National Disaster Mitigation Agency (BNPB), as of Monday (1/6/2020), Indonesia reported 467 new COVID-19 cases, bringing to the total confirmed cases to 26,940 and the death toll rising by 28 to 1,641 people. This means that easing social restrictions when the number of new cases has not shown a downward trend will only prolong the COVID-19 outbreak.
Saving the economy is indeed important, but if the risk of being infected with COVID-19 also increases, it will ultimately increase Indonesia’s economic losses, especially if the death toll also increases. The PSBB policy has not been effective in reducing the spread of COVID-19. The relaxation of the PSBB will only prolong economic inefficiencies and cause a failure in stopping the spread of COVID-19.
This will cause an increase in production and operational costs, which will in turn trigger a high-cost economy.
In the new normal era, companies and government institutions should be required to implement health protocols to keep their distance. Consequently, both companies and government institutions must prepare more space to keep a distance between employees or implement work shifts. This will cause an increase in production and operational costs, which will in turn trigger a high-cost economy. Furthermore, workers productivity will not be as optimal as before.
More pain, no gain
It is undeniable that the PSBB measures put in place during the past two months have brought a harsh impact on almost all economic activities, especially in the informal sector where most of the activities are halted. Many workers have lost their livelihoods. Many companies suffer losses and are even forced to close down their businesses, causing massive layoffs. The rise in unemployment will further increase the poverty rate. As a result, the people’s purchasing power dropped sharply, as seen in the growth in the mere 2.84 percent growth in household spending in the first quarter of 2020. The economic contraction has not affected the people and the business world.
The government has allocated Rp 172.1 trillion (US$11.87 billion) for social safety net programs for the poor and vulnerable poor households and those affected by COVID-19 and Rp 641.17 trillion for its national economic recovery (PEN) plan.
The government also experiences a shortfall in state revenue while having to spend more to finance nationwide COVID-19 mitigation efforts, such as the provision of social assistance, increasing its health budget and implementing economic recovery programs. The government has allocated Rp 172.1 trillion (US$11.87 billion) for social safety net programs for the poor and vulnerable poor households and those affected by COVID-19 and Rp 641.17 trillion for its national economic recovery (PEN) plan. Meanwhile, the health budget, used to solve the source of the problem, is Rp 75 trillion. In short, all elements of the economy have suffer huge financial because of COVID-19.
The government has to widen the state budget deficit to Rp 1,028.5 trillion or 6.27 percent of gross domestic product (GDP) due to the rise in spending. The government has issued bonds worth Rp 900 trillion to finance the extra spending, which will bring heavy financial burdens in the future. Not to mention, the government’s policy to ask banks to ease loan repayments has the potential to hit the financial and banking sectors. The impact will be severe if there are moral hazards. Therefore, do not make the great sacrifice useless without any gains. The government has allocated a large amount of money for COVID-19 mitigation efforts. If the spending is not effective and does not reach its targeted recipients, the economy will worsen, especially if it brings no benefits in ending the spread of COVID-19.
KOMPAS/RIZA FATHONI
A visitor stops in front of a pharmacy in Summarecon Mal Bekasi, Bekasi City, West Java, on Thursday (28/5/2020). Summarecon Mal Bekasi, which belongs to the green zone, has been carrying out activities within the new normal framework by complying with health protocols such as wearing masks and maintaining physical distance.
Conditions
According to World Health Organization (WHO) protocols, the government has to prepare tight health procedures and conditions before it can ease social restrictions and enforce a new normal in order to be able to control COVID-19 transmission. It means that we need a health system that can ensure the readiness of hospitals to detect, test, isolate and handle each COVID-19 case and contract tracing.
Ideally, the new normal can be enforced when the COVID-19 outbreak has reached its peak and has begun to decline.
Unfortunately, these requirements are still difficult for Indonesia to fulfill. In fact, the improvement of the economy will only occur if the COVID-19 outbreak has declined. Ideally, the new normal can be enforced when the COVID-19 outbreak has reached its peak and has begun to decline.
Therefore, the plan to reopen economic activities must be carried out in stages with strict COVID-19 protocol. In comparison, many countries which have implemented strict quarantines or lockdowns have begun reopening their economic activities in stages. Moreover, for Indonesia, which has not implemented a regional lockdown as an ideal standard, there is no other choice but to impose health standards if it plans to reopen the economy.
The government must also increase its health budget if it insists on enforcing new-normal conditions. If these requirements are not met, the community must have the awareness and readiness to protect themselves. The public must be disciplined in wearing masks, keeping their distance, staying safe and to avoid crowds. The people who have lost their livelihood and have not received social assistance will have to challenge the risk of COVID-19 infection to be able to make a living for their family.
KOMPAS/TOTOK WIJAYANTO
Enny Sri Hartati
The public must struggle and fight the COVID-19 outbreak at the same time. Only those who have a strong immune system and adequate income sources can survive against COVID-19.
ENNY SRI HARTATI,Senior Researcher at the Institute for Development of Economics and Finance
