Page 291 - e-KLIPING KETENAGAKERJAAN 31 AGUSTUS 2020

The first phase of the program would see the government disburse cash transfers for 2.5 million
workers, said Manpower Minister Ida Fauziyah, adding that BPJS Ketenagakerjaan had so far
verified the data of 10.8 million workers or 69 percent of the target.

"The cash aid is expected to maintain people's purchasing power and boost spending so that it
would have a multiplier effect on economic growth and prosperity," she said during the same
event, adding that the cash transfers will take time, until the end of September.

The cash aid will be transferred to workers through state-owned banks under the auspices of
Himbara, she went on to say, adding that Bank Mandiri would disburse the money to 700,000
workers, Bank Negara Indonesia (BNI) to 900,000 workers, Bank Rakyat Indonesia (BRI) to
600,000 workers and Bank Tabungan Negara (BTN) to 200,000 workers during the first phase.

The government has allocated Rp 695.2 trillion stimulus to jack up the economy, which is
expected to shrink by 1.1 percent at worst or grow by 0.2 percent at best this year, marking the
worst economic performance since the 1998 and 1998 Asian financial crises.
The government has only spent 25.1 percent of the Rp 695.2 trillion stimulus as of Aug. 19, five
months since the start of the outbreak, as red-tape bureaucracy and lack of citizens' data held
up disbursement of the much-needed stimulus.

Former Finance Minister Chatib Basri has said that the government would need to allocate the
slow-disbursed stimulus to the social protection program, adding that it would boost consumer
demand, which is needed to revive the economy.

"The only spending that could achieve the level of absorption quite significant is the social system
and not tax incentives," he said on Aug. 19, adding that the government should be more
"pragmatic by allocating funding that [it] could spend".

"The government needs to bolster consumer demand by providing cash transfers for lower to
middle-income citizens, which in turn will boost the supply side of the economy." Providing cash
transfers to lower-middle income citizens will greatly enhance domestic spending, he added.

Meanwhile, University of Indonesia (UI) economist Ari Kuncoro said the government's stimulus
would only be effective if people were confident enough to spend their money without risking
COVID-19 infection, adding that implementing strict health protocols would be crucial to revive
the economy.

"If social restrictions continue and people are unwilling to go outside, then the economy will
suffer even more and the stimulus would not be sufficient," he told The Jakarta Post . "The key
to economic recovery is to encourage people to return to their normal activity by using health
protocols. That will make the economic wheels run and avoid a greater contraction.".

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