Indonesia needs to “protect the people” and spend more to support them during the pandemic — and it’s not likely to impair the economic recovery, the country’s finance minister, Sri Mulyani Indrawati, claimed on Tuesday.
The so-called social safety net for Indonesians has been increased by 20% while health-care expenditure has been upped by nearly 19%, Sri Mulyani told CNBC’s “Squawk Box Asia” on Monday. Indonesia’s social safety net policies extend government support to the poor and those impacted by economic crisis.
“This is definitely shifting on our focus on the budget to protect the people,” she said. “Certainly, we want this not to be too long and that’s why it’s not going to affect our third quarter performance of the economy.”
Indonesia’s economy showed a “very strong rebound and recovery” in the second quarter, the minister said, adding that the focus is now on ensuring that the highly virulent delta virus can be contained.
“At the same time, also making sure that the normalization of the economic activity will not (be) at the cost of the increasing Covid (cases),” she said, adding that a spike in infections can overwhelm the health-care system.
Covid spike in Indonesia
Indonesia is grappling with the highly transmissible delta variant, which has pushed daily cases to record highs in recent weeks.
According to statistics site Our World in Data, Indonesia has seen a tremendous spike in Covid deaths, with a seven-day rolling average of 3.95 daily new confirmed deaths per million people as of Monday, up from 0.69 deaths per million people on June 16.
To put that in context, India’s worst figure on the same statistic, reached in May, was 3.04 deaths per million people.
The pace of vaccination in Indonesia has lagged globally, a trend that is largely seen in most of Southeast Asia.
As of July 16, about 5.89% of the Indonesian population has been fully vaccinated against Covid-19, according to Our World in Data.
In comparison, Thailand has fully inoculated nearly 5% of its population while the Philippines has reached almost 4%. In Malaysia, another country in the region facing a resurgence, 13.3% of the population is vaccinated. Singapore stands as an outlier regionally with one of the fastest vaccination rates globally — more than 44% of the population has been fully inoculated.
Indonesia imposed emergency measures earlier this month in a bid to contain the sharp spike in infections. Those restrictions are set to last until July 20, though preparations are being made for an extension, according to Mulyani.
“The president is still discussing with the cabinet precisely how long it will be extended,” she said.
She listed three factors that will likely influence the length of the extension: the number of virus cases, healthcare facilities’ ability to cope with new infections, as well as the vaccination rate.
“It is a good sign that we’re now seeing a tendency of declining of cases, especially in Java area — including Jakarta. And in Bali the vaccination has already reached … almost more than 80% of the population,” the minister said.
With the country now having secured more than 150 million vaccine doses, the race is now on to reach “at least 2 million” inoculations per day as the military, police and nurses at the village level are mobilized for the effort, she added.