FIRST LOCKDOWN in 2021: Is It Possible For Economic Recovery in INDONESIA?

Lockdown plan is going to apply in some regions. A new development of the virus has made lockdown in many countries including several countries in Asia: Indonesia and South Korea. Government in some countries has legally assigned someregulations to ban all activities outside the house. In Indonesia, lockdown or commonly named PSBB (Pembatasan Sosial Berskala Besar) begin on tomorrow until January 25, 2021. It has been going third lockdown for capital city of Indonesia and other regions. Business in retail, hospitality, tourism will be getting huge impact because of this rule. Now, people must stay at home except for a permitted reasons and school have closed for students. For food industry, this decision wouldn’t make any changes because anyone can make order from home and technology has helpedto survive in second wave of the virus. The lockdown maybe will leave many firms fearing for the future.

In Indonesia, government has prepared special funds to overcome covid-19 problem and national economy recovery. On this year, government give financial support up to Rp 403,9 trillion. In England, government provide financial grant for retail, hospitality and leisure industry up to £9.000. Some companies are calling to get financial aid in order to survive during lockdown. Is it sufficient to burn out the virus and resolve economic problem? Corona virus are developing rapidly and much more easily transmitted to other people. In Indonesia, 836.718 confirmed cases were announced on Monday (01/11) by government. This number is continualy growing day by day. Many hospitals has filled with patients during the second wave in 2021.

Economist from Indonesia feels confident for national economic recovery in 2021by strengthening domestic economy. It will happen when vaccine was injected to people and people are obey to covid-19 protocol. The new restrictions were necessary to control corona virus outbreak. But, lockdown has an impact on national economy because some regions (case in Indonesia: Java and Bali region) give large contribution to gross domestic product (GDP). The government plans to vaccinate million people on January. It will begin with health workers followed by government officials, and religion figure. People who will get vaccine is anyone aged 18-50. Currently, Indonesia has own 125 million doses vaccine from Sinovac, 50 million from Astra Zeneca and 50 million from Novavax. So, total 225 million doses of vaccine has provided by the government. When vaccine is injected, the impact on economic has been appearing lately.

Today, Indonesian president, Mr. Joko Widodo become the first person who receive covid-19 vaccine (Sinovac vaccine). This decision was beginning of mass vaccination in order to clamp down on soaring confirmed case. He has got first injection, the second one wil given the next few days. He has injected at the state palace along with indonesian health minister and several senior officials as well as business and religious leaders. Indonesia was targeting to inoculate 67% of the population in stages over next 15 months. When first vaccine was giving to mr. president, capital market has gave signs of recovery. US dollar was weakenening.

In 2021, several policy strategy were published to become part of solution, such as: open several productive sectors, accelerating fiscal stimulus (budget realization), increasing credit from demand and supply side, monetary stimulus and macroprudential policy and digitizing economic and finance for micro businesses. In 2021, economic growth in Indonesia has predicted to growing 4,8-5,8%, supported by export performance, private and government consumption, investment value from government capital expenditure and foreign investment. It is positive response from new job creation law.

On the other side, fiscal policy priorities in 2021 divided become 4 section. First of all, continuing and accelerating the national economic recovery. This priority is going to achieve with eradication of corona virus and recovering the economy as soon as possible. Second, strengthen and structural reforms. Government will improve investment climate, economic competitiveness and increase quality of human capital. Third, budget reform related to revenue sector and quality of spending (corona virus has eliminated some government activities, switch to virtual activity). Forth, accelerating development priorities in several important sectors such as education, health, infrastructure, information technology and food security.

World bank has stated global economic growth in 2021 is 4 percent. This year, World bank assesses that economic performance is still low compared to economic growth before corona virus pandemic attacked. Despite economic has been recovering, the global economic is still full of uncertainty. However, the vaccination become a main solution to restore global economic in the future.

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