[WEBINAR REPORT] Gita Wirjawan: The economic impact of COVID-19 in Indonesia

SGPP Webinar Series #1 (April 14th, 2020)

Three main elements addressed by Mr. Gita Wirjawan needed to underline for the COVID-19 pandemic, i.e. (1) how we were all shocked by all the information towards the pandemic of COVID-19 which was filled with anxiety and confusion in overcoming this pandemic; (2) second is how we were shocked to our lifestyle when there was a lot less physical, more mobile and inactive due to the intention to isolate ourselves in the house; (3) how we are shocked of policy responses from below even up to the government structure, in the family responses, RT, RW, kelurahan, kecamatan, and the government) is gigantic that is created not only confusing conditions but also anxiety as well in the environment.

The unprecedented nature of health and economic crisis, one of the toughest challenges is how we could we can come up with the solution, because the impact caused such as death is skyrocket invected by COVID-19 in the last three months. He said that we are confronted by near term solutions because of the anxiety. Based on the data itself, for example in Italy, the number of deaths reaches 10%, and in Indonesia reaches 9% mortality, this also occurs worldwide by having a variant of the number of deaths, which causes what about the importance of the degree of readiness in terms of facing COVID-19. On April 10, based on official data on COVID-19, in Indonesia confirmed cases reached 3,512, with a total of 306 deaths and 282 recovering.

As per March 31, the graph of the number of confirmed cases of COVID-19 in each country experienced differences, with countries such as the US, Spain, Germany, France still rising but Italy had begun to follow China with a declining graph. Then in the Impact on stock market factor, in this case the three largest stocks experienced a drastic decline (Nikkej -27%, Dow Jones -29% and FTSE -33%). He said there was no permanent recovery on the impact of this pandemic, as long as there was evidenced resolution in terms of medical issues, were not going solve the problem in the capital market around the world. Meanwhile, the unemployment rate in US was reaching 3.3% is an alarming number. US-based sampling, according to him, because the global economy was intertwined and more interconnected which the US was the center of economics and one of the biggest sources of investment and capital in the world. So that the impact will also be felt by most or even almost countries in the world.

In Public health measures, he chose the 4 countries that were discussed, first in the US with the CDC (Centers for Disease Control and Prevention) trying to develop vaccines, drugs, and diagnostic tests. US went from having no test to having multiple different tests in a few weeks including labs running more than 100,000 tests per day and 7,188 million population are being tested. Meanwhile in South Korea with the KCDC (Korea Centers for Disease Control and Prevention) developed diagnostic tests within 2 weeks after the first confirmed case. And also testing is at the heart of the country’s coronavirus strategy with tested over 500.00 people and 9,812 per million population are being tested, which also pioneered “drive-thru” tests. In Singapore, the National Center for Infection Diseases (NCID) adds more than 300 beds to surge capacity. They are developing diagnostic tests and drug trials for therapy. And Indonesia, quite disappointed that there are no independent centers for disease control and prevention and the health ministry is managing the health crisis. Even more worrying, Indonesia ranks among the world’s most worst COVID-19 testing rates, 113 per million population are being tested.

Moreover in terms of Border Control and Economic Stimulus, the US government has recommended limiting gatherings to 10 people until the end of April and also CDC urges all residents to avoid non-essential domestic and international travel. On April 10, Fed just announced another US$2T stimulus plan. South Korea government called on citizens to self-isolate, closed borders, put cities into lockdown and shut all but essential business and all travelers entering Korea must be tested and subject to mandatory 14-day quarantine. In Singapore, the government asked all short term visitors will not be allowed to enter or transit through Singapore and for returning citizens, permanent residents, long term pass holders will be issued a 14-day stay home notice at dedicated hotels. And in Indonesia, from March 8, foreign visitors from restricted countries (China, Iran, Europe, UK, and South Korea) will not be allowed to enter or transit in Indonesia, as well as foreign visitors, who must provide a certificate health issue by each respective country upon check-ins. All visitors subject to 14-day quarantine in government’s facilities.

He then continued, that Indonesia’s plan in stimulus package anatomy of the additional IDR 405 trillion maybe not enough to come back from the COVID-19 pandemic. Indonesia’s upcoming challenges, 1600 trillion expected needed with calculations of labor income of IDR600 trillion, health facilities and social needs of IDR400 trillion, MSMEs of IDR300 trillion and labor-intensive and strategic industries of IDR300. In the case of payrolls, Indonesian domestic workers are a complex issue, with the entire type of employment predicted to total annual salary with a whopping IDR 3,888.4 trillion. At present Indonesia has only turned the Athlete House into a recovery place for COVID-19 patients, but the government must prepare more than that, and think of broader effects such as the number of hospital beds and masks.

Mr. Gita Wirjawan also mentioned he didn’t see that China’s currency (Yuan) will overtake US $ dollars as a global currency and he also thinks that the IMF as a multilateral agency, probably will not think that is the right political choice to do so. Indonesia needs to re-industrialize in terms of economically after this COVID-19 Pandemic, but Indonesian products must be more productive and competitive, be able to process raw materials better and play a greater role in the global chain.