There are six bits of advice for Indonesia to recover immediately from the recession due to COVID-19. (Image via Forbes)

6 advice to recession-hit Indonesia

Facing the novel coronavirus disease (COVID-19) since March 2020, Indonesia’s economy finally had to succumb to the recession, a negative economic trend that also was being faced by some countries around the world. The Statistics Indonesia (BPS) recorded the growth of the national economy reached -3.49% in Q3 of 2020, from previously 5.32% in Q2 of 2020/

Speaking on Wednesday, an economist from CORE Indonesia, Mohammad Faisal, stated that the recession is an alarm for the Indonesian government to put the metal on the pedal for economic revival in order to tackle the recession. Faisal regretted that the Indonesian government was waiting for BPS’s notification, while for him, the government should have prepared beforehand.

Therefore, the question now is, “how to overcome the economic recession and recover quickly?”

First, Faisal said that the most basic way is to sustain people’s purchasing power, especially the middle to lower classes. It can be done by accelerating the social assistance funds (Bansos) and other assistance programs listed in the National Economy Recovery (PEN) program.

The second way is by sustaining business resilience, by accelerating tax incentive realization and other regulation relaxations. Not only to reduce the jobless and work termination but it also aims to encourage the companies to produce and reap benefit amid the pandemic.

Third, Faisal admitted that COVID-19 needs to be handled as soon as possible. If the positive case keeps hiking, it will affect people’s trust to continue their activities, hence there will be no productivity. On the other hand, Faisal also worried that the bad management of COVID-19 only deal another blow to Indonesia’s economy because as the pandemic goes on, then the fiscal stimulus also has to be given continuously.

Next, Faisal also suggested Indonesia to keep the export and investment going. However, the investment depends on how the Indonesian government is addressing COVID-19, as it will also affect investors’ trust. Moreover, Faisal also said that the investment is not limited to Java island only, but also to other regions to create labour-intensive and manufacturing industries. Meanwhile, it is possible for Indonesia to continue exports as other countries, such as China, already recovered from the pandemic.

Fifth, by creating job and consumption for middle-upper classes to decrease fiscal expense, and lastly, the government also needs to realize sustainable development, such as prioritizing renewable energy. Thus, Indonesia could adopt the green investment trend, a priority to foreign investors.

Source: https://bit.ly/2I5m0JW