The fiscal burden, especially the budget for social protection, has swelled to a figure with no precedent.
By
Kompas Editor
·3 minutes read
Kompas/Priyombodo
Property project workers walk to their workplace in the Bendungan Hilir area, Central Jakarta, Tuesday (8/12/2020).
The Manpower Ministry noted that throughout 2020, 386,877 workers were laid off. This figure is 20 times that of 2019 (Kompas, 10/3/2021).
The surge in layoffs due to the Covid-19 pandemic has caused unemployment and poverty to rise sharply. The fiscal burden, especially the budget for social protection, has swelled to a figure with no precedent. This situation has also triggered the need for massive stimulus to ease the burden on the business world in order to reduce layoffs.
We see that the synergy of comprehensive monetary and fiscal policies during the pandemic was able to hold the economy from a deep contraction in the last three quarters of 2020, but was not yet strong enough to stimulate economic recovery as expected, starting at the beginning of 2021. The worry that arises is that minus economic growth still occurs in the first quarter of 2021. The high number of positive cases of Covid-19 resulted in the government imposing large-scale social restrictions (PSBB) and restrictions on community activities (PPKM), which have an impact on the real sector and hit a number of sectors.
This is reflected in the company\'s operational losses, decreases in sales, decline of production, and the number of layoffs.
From a survey by Statistics Indonesia (BPS) and the Manpower Ministry, the Covid-19 pandemic has affected not only 29.12 million (14.28 percent) of the working age population, but also 88 percent of companies. This is reflected in the company\'s operational losses, decreases in sales, decline of production, and the number of layoffs. A survey of a number of institutions shows that the pressure on the business world and the trend of layoffs will still occur in 2021, including in micro, small and medium enterprises (MSMEs), which are the focus of the stimulus for the National Economic Recovery (PEN) programs in 2020 and 2021.
KOMPAS/TOTOK WIJAYANTO
A worker carries trays of freshly made tofu to the packaging section of a small tofu producer on Thursday (23/7/2020) in Pancoran, South Jakarta. As of July 21, the government has disbursed Rp 11.84 trillion in working capital for cooperatives and micro, small and medium enterprises (MSMEs) through national economic recovery program. The figure is 9.59 percent of the Rp 123.46 trillion fund for cooperatives and MSMEs.
How fast and strong the economic recovery is will depend on our ability to cope with the pandemic. The longer it takes to get out of the health crisis, the slower we will recover. The vaccination introduced by the government has given hope, but not as quickly as expected due to problems on the availability of vaccines. The shadow of the threat of virus mutation that has entered a number of provinces could make the government at any time tighten the mobility of the people again.
This may bear further burdens on employment and the real sector in the future. Its implication is that in addition to social protections to increase purchasing power and stimulate household spending, stimulus for business actors must still be an important component in the PEN program in 2021. The business community hopes that the stimulus program will be continued in this economic recovery phase, including tax stimulus, financing, and extension of the credit guarantee program to corporations.
There is no other choice but to accelerate economic recovery. The business world has high hopes for the Job Creation Law, which is believed to be able to speed up investment in 2021.
ANTARA FOTO/HAFIDZ MUBARAK A
Workers load cement onto a ship at Sunda Kelapa Harbor, Jakarta, Friday (14/2/2020). The government will conduct detailed dissemination of information to people related to the job creation bill, which aims to create jobs so that it can support the country\'s economy.
The challenge is at the implementation level. The Cabinet\'s task is to ensure that this runs optimally, including overcoming existing bureaucratic and structural obstacles.
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