Since President Joko “Jokowi” Widodo announced the free vaccine plan recently, it has become the hot topic of public debate and has also brought enthusiasm to a number of parties.
By
ENNY SRI HARTATI
·6 minutes read
KOMPAS/TOTOK WIJAYANTO
Enny Sri Hartati
The government has finally decided to provide vaccines for free to all. Since President Joko “Jokowi” Widodo announced the free vaccine plan recently, it has become the hot topic of public debate and has also brought enthusiasm to a number of parties. There is even an assumption that with the arrival of the vaccine, Covid-19 could be totally resolved. There are also exaggerated expectations such as with the vaccination, the economy will be able to grow faster.
In fact, everyone knows, a vaccine is not medicine. It means that we cannot just rely on a vaccine in stopping the transmission of Covid-19. In fact, it is the discipline of people in adhering to health protocols that is the key to halting Covid-19 transmission. Moreover, there are still many crucial problems in vaccine procurement, especially related to the 1.2 million-dose Sinovac vaccines. There are questions about safety and the effectiveness of protection (efficacy) of the vaccine, the availability of state funds, to the effectiveness of vaccine distribution patterns.
The government claims to have allocated Rp 18 trillion for the vaccination, in addition the remaining funds for the National Economic Recovery (PEN) and health in the 2020 state budget, which amount to Rp 36.44 trillion. However, if the government decides to make vaccines free for all people, at least 250 million-300 million doses of vaccine must be provided. The budget requirement could reach Rp 120 trillion. Meanwhile, the total health expenditure in the 2021 state budget is projected to decrease to only Rp 169.7 trillion from Rp 212.5 trillion in 2020.
If the problem is related to the availability of the budget, it can be solved by reallocating part of the Defense Ministry’s expenditure budget, which is projected to increase to Rp 136.99 trillion or from the police budget, which is estimated to increase to Rp 111.9 trillion.
However, the main challenge for the vaccination program is not only related to the budget availability but also the level of public trust. This can be seen from the results of a survey conducted by the Health Ministry and the Indonesian Technical Advisory Group on Immunization (ITAG), the United Nations Agency for Children (Unicef), and the World Health Organization (WHO) regarding the acceptance of the Covid-19 vaccine in Indonesia. The survey was conducted online on 19-30 Sept. 2020 with 115,000 respondents from 34 provinces. In the survey, only about 65 percent of respondents expressed their willingness to accept the vaccine if provided by the government, while about 8 percent said they would not rake it and the remaining 27 percent expressed hesitation.
Kompas
This illustration photo taken on November 17, 2020 shows vials with Covid-19 Vaccine stickers attached, and syringes, with a flag of the European Union. The EU\'s drug regulator authorised the Pfizer-BioNTech coronavirus vaccine on December 21, 2020, and said there was no evidence it would not work against a new strain found mainly in Britain.
The highest acceptance rate of the vaccines, namely 69 percent, was from the middle class group, while the lowest was from the poor group, namely 58 percent. The main reasons for doubt and resistance to vaccines were, among others, due to concerns about safety (30 percent); vaccine effectiveness (22 percent); distrust of vaccines (13 percent); concerns about side effects, such as fever and pain (12 percent); and religious reasons (8 percent).
Seeing the complexity of these problems and challenges, the free vaccination program will not become the main solution to the economic recovery. If the challenge of public distrust is not resolved immediately, the vaccination will be unable to stop the spread of Covid-19.
In addition, the momentum of the long year-end holiday, which is expected to drive the tourism sector, which has collapsed, cannot be optimally realized as the risk of potential transmission is still higher compared to its economic benefits. The new vaccination plan signals progress in handling Covid-19. But, if people are still not disciplined in implementing health protocols, the risks of the Covid-19 transmission remain high.
Import warning
Although the vaccination plan will bring a positive impact on the handling and control of Covid-19, the road to the economic recovery is still quite steep. If the handling of Covid-19 remains slow, it will be difficult for economic activities to return to normal. In fact, the household spending as the main driver of the economic growth will grow only if the economy can recover.
Meanwhile, the bank lending growth, one of the main indicators in the economic growth is still contracting. As of November, 2020, the bank lending shrank by another 1.39 percent on an annual basis following a 0.47 percent drop in October. On the other hand, third party funds (TPF) collected by banks grew by two digits. The growth of the third party funds reached 12.88 percent annually in September 2020, 12.12 percent in October and 11.55 percent in November.
A nurse administers the Pfizer-BioNTech COVID-19 vaccine at Guy\'s Hospital in London, Tuesday, Dec. 8, 2020. U.K. health authorities rolled out the first doses of a widely tested and independently reviewed COVID-19 vaccine Tuesday, starting a global immunization program that is expected to gain momentum as more serums win approval.
Various liquidity incentive programs under the national economic recovery plan have apparently not been able to drive productive sectors. The low loan disbursement due to limited demand from the business world also at the same time reflects the people\'s low purchasing power. In the midst of this condition, one threat that must be watched out is the sharp increase in imports of consumer goods.
Even though the trade balance in May-November 2020 recorded a surplus, pressure on imports of consumer goods increased. Statistically, the portion of imported consumer goods is relatively small, amounting only $12.93 billion or about 9.44 percent of the total imports during January-November 2020. However, if you look at the details of imports of intermediate raw materials, which accounted for 73.17 percent, most of them are final demand goods or consumer goods.
Like the winds of heaven, the presence of a vaccine brings the people\'s hopes and optimism.
On the one hand, imported "cheap" products from China appear to be able to drive household spending. However, if the increase in the imports continues, the resilience and competitiveness of domestic industries will weaken. This means that the interest to invest in the manufacturing sector is also weakening. The appeal of the newly issued Job Creation Law will be in vain. With the recent signing of the Regional Comprehensive Economic Partnership (RCEP) agreement, imports from China which accounted for 33.61 percent of Indonesia’s total imports in Nov. 2020, could further increase
Likewise, the increase in refined sugar imports from India will further hamper the revival of the domestic sugar industry.
Various year-end and New Year sale promotion programs should not become a haven for imported products. Like the winds of heaven, the presence of a vaccine brings the people\'s hopes and optimism.
Hopefully the appointment of several new ministers in the recent Cabinet reshuffle will be able to fulfill the great expectations of the people who have been patient in bearing the impact of Covid-19 for a long time. Congratulation in assuming the mandate and become a new hope for Indonesia\'s economic recovery.
ENNY SRI HARTATI, Senior researcher at the Institute for Development of Economics and Finance (INDEF).
This article was translated by Hendarsyah Tarmizi.
