Rector Ari Kuncoro in Berita Satu TV: The President’s Speech, Financial Memorandum and 2021 State Budget
Hana Fajria ~ PR of FEB UI
Jakarta – (14/8/2020) BeritaSatuTV broadcasted the speech of the President of the Republic of Indonesia regarding the 2021 State Budget Draft (RAPBN) and Financial Memorandum at the DPR-MPR Building, Jakarta, on Friday, August 14, 2020. The Rector of Universitas Indonesia was one of the speakers at a question and answer session of the speech. One of the issues that was questioned concerned the economic growth that was stated to be positive 4.5-5,.5%.
The Rector of Universitas Indonesia, Professor Ari Kuncoro, presented a response to the president’s speech, saying that long-term growth (steady state growth) does exist at 5% since 2012. Currently, it has momentarily dropped to -5.32% due to Covid 19. But this is a temporary equilibrium, and the possibility of a return is convincing, because (one) we have a sizable domestic population, (two) consumption and investment are controllable, and (three) there is government spending. But because of Covid 19, as the uncertainty component, the growth range is at 4.5-5.5%.
This wide range indicates a situation full of uncertainty. Therefore, the Government is conducting various things to show that we are doing something (expectation realignment), this is necessary to raise people’s expectations, because the situation has not improved. Several indicators, for example the consumer confidence index, the durable goods purchasing index, the job growth index, the purchasing manager index, all improved between June and July. If the government takes note of this, like surfers taking advantage of the waves, it is possible that the waves will be amplified again. Because, if you say that the situation is okay, that’s not true. Instead, you should take a position in the middle to rally the public to encourage the people.
How to deal with uncertainty or minimize risk? We need to know what gives rise to uncertainty. The response to the news about vaccines in Russia was not appropriate Likewise to statements of the virus spreading through the air. All of these do not provide solutions, only phenomena. This creates fear. Unlike the statement that from OTG (Non symptomatic patients), we can extract something to study the disease. This is what we want to hear. So as long as there is uncertainty and fear, middle-class consumers will not spend normally, they will save, they will not travel, they will not have fun. We need positive narratives that something is being done. There is a Snovac vaccine, there are clinical trials These need to be delivered to show that there is progress. It is like saying there is a light at the end of the tunnel, because humans need hope.
Seeing the structure of the RAPBN presented by the president, Prof. Ari said there were elements in the speech that showed an understanding of Covid 19 as a momentum for economic transformation. ew tourism destinations, for example, can be opened with new habits, such as keeping safe distance. Then, connecting the supply chains, from traditional ones, for example from offline meetings between MSMEs and buyers at the market, to online meetings. Infrastructure has also been interpreted in new ways. Productivity can also be increased through social assistance, which will be channeled through public works, for example by building irrigation channels. The key is stimulus, production capacity and new technology, all were mentioned in this financial note, which referred to Indonesia as an upper middle income country. Covid 19 is real, but we can use the momentum for economic transformation.
With regards to the stimulus in the RAPBN, Ari said that there are two important issues. First, the stimulus is important for restarting the economy. The type of stimulus does not matter, because the most important thing is a stimulus. Second, it has to be an appropriate stimulus . For example, a stimulus for MSMEs. Enabling them to produce, and hence maintaining the supply chain. For this, it is important to have the right data, on which MSMEs need to be provided. Thus, use the data to identify which MSMEs have participated in KUR, Mekar, and micro credits. Stimulus is important to increase production capacity and purchasing power.
In his closing statement, Ari said that in order to achieve the government’s targets and projections, all sectors had to be regulated, such as productive social assistance, corporate assistance, and relaxation. Everything can move again when people shop. As long as there is fear, people will not go shopping. Health procedures are therefore important. This can be applied through creating an index, which shows safe places for people to shop. An index that states which places are safe, that will build people’s confidence. (hjtp)
complete video at the following link: https://www.youtube.com/watch?v=QUgfLBKya-o
(am)
