- The government prepares a roadmap to deal with the scenario if corona virus last year.
- Pa forms a curve W.
- Case control which, among other things, depends on speed vaccination determine the economic recovery of a country.
The government’s hope that the economic recovery from the Covid-19 pandemic will fully occur this year is starting to fade. Although the economy grew at an annual rate of 7.07% in the second quarter, the domestic economy is faced with the threat of the Covid-19 virus, which may not disappear in a matter of years.
Minister of Health Budi Gunadi Sadikin last week said he was not sure the Covid-19 pandemic would pass quickly. For that, the government is preparing a road map or roadmap to face a scenario if this virus persists for years.
“The president gave directions that it is very likely that this virus will live with us long enough. So, the president’s directive, there must be roadmap, ”Said Budi.
Budi said the government would immediately implement pilot project which governs the implementation of health protocols in the six main activities as part of this roadmap.
The six activities include modern trades such as malls, shopping centers and traditional trades such as wet markets or grocery stores. Then, offices and industrial areas as well as land, sea and air transportation. Furthermore, road maps for tourism locations such as hotels, restaurants, and events; religious activity; and education will also be arranged.
Later, visitors will be scanned to find out whether they have been vaccinated against Covid-19. If they have been vaccinated, visitors can relax health protocols.
Budi gave an example, restaurant visitors who have been vaccinated can sit four of them at one table so they can remove their masks. Meanwhile, visitors who have not been vaccinated will be placed in an open space with a capacity of two people at one table.
In addition, the government will use the Peduli Protect application to implement a health protocol roadmap to monitor the vaccination status of visitors. The government also hopes that this health protocol can accompany people’s daily lives.
The steps to coexist with Covid-19 have already been taken by many countries, one of which is Singapore. The Singapore government even believes that Covid-19 may never disappear from the world. However, humans can coexist with this virus.
Since the end of June, the Singapore government has been preparing its residents to be able to face Covid-19 as part of their daily life. They designed a roadmap containing guidance on ways to live with the new normal. In roadmap In the statement, it was explained that Singapore would handle Covid-19 like other endemic diseases, namely the common cold, or hand, foot and mouth disease.
Although it is still in accordance with the plan to coexist with Covid-19, new cases in this neighboring country are also still up and down. The Singapore government will implement a regional quarantine or lockdown partial second this year from July 22 to August 18.
Can recover even though there is still a pandemic
CORE Indonesia Research Director Piter Abdullah explained that the economy still has the potential to continue to improve even though the Covid-19 virus will last a long time in Indonesia. He is optimistic that the pandemic will subside and even end with the achievement herd immunity.
“Covid events will probably be normal, just like the flu, not dangerous. So even though the virus will still be around for years, economic activity will not be limited,” Piter told Katadata.co.id.
For that, according to him, the government must prepare a road map to the new normal. The economy has the potential to grow positively if the pandemic is under control, even if it is not completely over. This can be seen in the second quarter economic performance which has grown positively reaching 7.07% on an annual basis.
“Especially if roadmap prepared and the adjustments are really well prepared, the economy will be able to recover and bounce back,” he said.
CSIS economist Fajar Hirawan said that 7% economic growth in the second quarter of 2021 became the government’s capital this year. However, the economy will indeed slow down in the third quarter with the restrictions.
“With the development of Covid-19 like this, indeed we must be prepared for the possibility of mobility restrictions that always occur within a certain period of time,” he said.
This condition causes economic conditions to also fluctuate. Economist Chatib Basri estimates that Indonesia’s economic recovery will resemble a W curve, like many developing countries.
“In the case of Indonesia, we came out of recession in the second quarter but we must anticipate a decline in economic growth in the third quarter due to the implementation of restrictions,” said Chatib in the Webinar From Pademi Towards Smart Nation on Sunday (15/8).
Chatib explained that the economic recovery in developed and developing countries has differences. This is mainly due to access to vaccines and the implementation of strict health protocols. The economic recovery in most developed countries, according to him, is forming a V curve. This means that the economy has fallen or contracted quite deeply due to COVID-19 but recovered very quickly to pre-pandemic levels.
While in most developing countries where vaccine shortages and health protocols are more lax, the economic recovery curves like the letter L, shaped like the Nike logo, or the letter W.
“Countries that have problems with access to vaccines, economic recovery is like the letter L, which means the economy goes down and then stagnates, or like the Nike logo, namely the economy goes down and then goes up but very slowly, or the letter W, which means the economy goes down, rises a little and then goes down again,” he said.
This shows that economic recovery is highly dependent on handling the Covid-19 pandemic. One of the most crucial things to do, according to him, is to speed up vaccination.
“To control this pandemic, restrictions are needed that must be accompanied by social assistance. In addition, if you want to focus on controlling the pandemic, costs such as PCR tests must also be affordable,” he said.
The former Finance Minister of the era of President SBY proposed strict restrictions to control cases. However, social assistance should be provided not only to the poor but also to the vulnerable who cover 160 million people or 40 families. In addition, the government must also provide assistance to MSMEs.
“Each family is given Rp. 1 million to Rp. 1.5 million, so it takes a budget of Rp. 40 trillion to Rp. 60 trillion in one month or at most Rp. 180 trillion in 3 months,” he said.
If the pandemic is really under control, according to Chatib, the government needs to provide support to industries that have the potential to develop such as technology as people’s behavior changes. “Then how to make green recovery,” he said.
He proposed the government to make an excise policy on mineral fuels (BBM), which is mostly consumed by the upper middle class. This excise fund can be used for health financing that requires a large budget allocation for handling the Covid-19 pandemic.
“This fuel excise is also good for the environment and can generate more income to finance the needs of handling Covid-19,” he said.
INDEF economist Faisal Basri also emphasized the importance of health care to restore the economy. In addition to this, according to him, the government has underestimated the Covid-19 pandemic. This can be seen from the 2021 APBN budget allocation, which initially cut the health budget but increased the health budget. The government assumes that Covid-19 will no longer be a big problem this year.
“In the 2021 State Budget, initially the budget for infrastructure rose sharply, while health fell. However, the government finally changed it again due to a spike in cases,” he said.
He also assessed that the economic recovery in Indonesia was relatively slow compared to other countries. As a result, the Indonesian economy, which had been upgraded in 2019 to the upper middle income group, was again downgraded.
Faisal also considered that it would be difficult for Indonesia to return to class if it was not able to control Covid-19. In addition to vaccination, the government needs to improve the level of testing which is still low and lagging far behind many countries.
Bappenas previously even warned that the Indonesian economy could potentially be overtaken by the Philippines and Vietnam in the next few years. This will even happen if the average economic growth reaches 5%.
“Without redesign In economic transformation, Indonesia’s per capita income will be overtaken by the Philippines in 2037 and Vietnam in 2043,” said Deputy for Economics at Bappenas Amalia Adininggar earlier this month.
He emphasized that it would be difficult for Indonesia to get out of the trap of middle-income countries or middle income trap with an average growth of 5%. In fact, Indonesia targets to become a developed country by 2045.
He estimates that Indonesia needs to achieve an average economic growth of 6% to become a developed country with 100 years of independence. A more aggressive 7% growth could even help Indonesia achieve the title of a high-income country before 2040.
To achieve this, according to him, it is necessary to go through a post-Covid-19 economic transformation. There are two steps that can be taken. First, changing the structure of the economy from a low-productivity economy to a high-productivity economy. Second, increase productivity within the existing sector.
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