Febrio N. Kacaribu: Prodeep Institute Holds Public Discussion on How to Ensure National Economic Recovery Program Meets Its Objectives
Nino Eka Putra ~ FEB UI Public Relations Officer
DEPOK, Saturday, 27/6/2020 – The government has launched the National Economic Recovery (Pemulihan Ekonomi Nasional, PEN) program to deal with the Covid-19 pandemic. The program should be closely monitored to ensure that it meets the objectives and brings benefits.
Febrio N. Kacaribu, the head of the Fiscal Policy Agency, Ministry of Finance of the Republic of Indonesia, who is also a lecturer at FEB UI, said Covid-19 has posed a threat to the consumption side of Indonesia’s economy. Consumption, including household consumption, grew 2.84% in Q1-2020, non-profit institutions serving households (LNPRT) -4.91%, government 3.74%, gross fixed capital formation (PMTB) 1.07%, and net export 0.45%.
Three sectors supporting the economy slowed. The first, the primary sector, which consists of acriculture and mining, grew 0.18% yoy. The second sector, which consists of manufacturing, electricity, gas, water, and construction, grew by 2.38% yoy, The third, the tertiary sector, which includes trade, transportation and warehousing, information and communication, financial services, insurance, and other services grew by 4.62% yoy.
“The government has allocated Rp695.2 trillion worth of fiscal support for Covid-19 handling. Of the total, Rp87.55 trillion was allocated for the health sector, Rp203.90 trillion for social security, Rp123.46 trillion for MSMEs, Rp120.61 trillion for business incentives, Rp53.57 trillion for corporate financing, and Rp106.11 trillion for sectoral/government ministries/institutions and regional governments. In addition, another Rp607.65 trillion was allocated to finance PEN. Of the total, Rp205.20 trillion was allocated for the demand side and Rp402.45 trillion for the supply side,” said Febrio in a public discussion held by Prodeed Institute to ensure that the PEN program meets its objectives. The discussion was moderated by Christine Tjen, Deputy Head of Administration at LPEM FEB UI, on Saturday (27/6/2020).
Febrio went on to say that the PEN program, which is stipulated in Government Regulation No. 23/2020, aims at protecting, maintaining and improving the economic capacity of business players. PEN is based on the principles of social justice, maximum welfare of the people, support for business players, implementation of policy principles (prudence, good governance, transparency, acceleration, fairness, accountability), not causing moral hazard, sharing of costs and risks among stakeholders according to their respective duties and authorities. PEN is implemented through Article 4 that stipulates state capital participation, fund placement and government investment, and Article 5, which stipulates guarantees.
A number of regulations, data collection, and supporting infrastructure/IT to support MSME programs, tax incentives, corporate and regional government financing are still in progress so they cannot as yet be executed optimally.
“Therefore, the follow-up plan is to immediately execute the support programs for MSMEs and corporations to drive the economy and support PEN, and increase the effectiveness of public communication to disseminate information on the PEN program and gain constructive input that can be optimally utilized by the public in supporting PEN,” Febrio concluded. (hjtp)
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