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Supporting National Economic Recovery during the Covid-19 Pandemic

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By: Achmad Faisal

The Covid-19 pandemic that has been taking place since 2020 has resulted in a multidimensional crisis. The economic sector is the sector that has been hit as a result of this incident. Fortunately, the government has swiftly issued a fast and measurable economic policy in the face of the Covid-19 pandemic. This policy has brought the trend of Indonesia’s economic growth to improve since the second-fourth quarter of 2020.

Most recently, the government has allocated a 2021 National Economic Recovery (PEN) fund with an amount of IDR 699.43 trillion. The 2021 PEN Fund is an increase from the previous allocation of Rp695.2 trillion or an increase of 20.63 percent of the 2020 PEN budget realization. The increase in the PEN budget is expected to maintain the momentum for national economic recovery, especially encouraging economic growth in the first quarter of 2021.

Specifically, the government has allocated the PEN 2021 budget for five sectors. Those sectors are health Rp. 176.3 trillion, MSME support and corporate financing Rp. 186.8 trillion, priority programs Rp. 125.1 trillion, social protection Rp. 157.4 trillion, and business and tax incentives Rp. 53.9 trillion.

President Joko Widodo explained the national economic recovery policy (PEN) by continuing the social assistance program from 2020 to 2021. According to the President, the social assistance program helps lower-level communities meet people’s needs and purchasing power.

To be more effective, the social assistance program is complemented by continuous job creation. The expansion of continuous employment opportunities can be carried out by business actors, including UMKMN. For this reason, the government provides assistance to MSME actors across the country.

The purpose of providing assistance is so that MSMEs can reproduce optimally and give priority to government spending on domestic products and build an ecosystem that is conducive to new investment and the rise of large-scale businesses.

Based on data from the Committee for Handling Covid-19 and National Economic Recovery (KPCPEN), the realization of the PEN program by the end of 2020 reached IDR 579.8 trillion. This figure is equivalent to 83.4 percent of the total budget allocation amounting to Rp.695.2 trillion.

Expert Staff for State Expenditure of the Ministry of Finance of the Republic of Indonesia, Kunta Wibawa Dasa Nugraha said, in general, PEN is optimal in boosting the economy. It’s not bullshit. This is because based on several surveys, namely Indonesia High Frequency, World Bank, and others, the social protection program contained in the PEN budget is able to help people’s purchasing power in the midst of a pandemic.

The PEN fund also succeeded in making social protection coverage and targeting better. Meanwhile, for the MSME sector, intervention was able to make the majority of MSMEs survive.

Kunta said that PEN funds were absorbed 100 percent in the MSME cluster and corporate financing. The UMKM sector absorbs a budget of IDR 12.44 trillion or 96.7 percent of the ceiling. Meanwhile, in the corporate finance sector , PEN funds are used to solve problems in cash flow management, restructuring, debt consolidation, and providing working capital for national companies . Meanwhile, the Investment Financing Program for Cooperatives has Rp.1.29 trillion, and the Banpres Program for Micro Businesses reaches Rp.28.80 trillion.

All these government economic policies succeeded in bringing the Indonesian economy from difficult times. Bank Indonesia noted that the Indonesian economy grew in the range of 4.1 percent to 5.1 percent. Inflation is also kept below 2 percent. Other data show that Indonesian banking is very strong, liquidity is abundant, and the interest rate trend continues to decline .

This development is certainly very encouraging. I am optimistic that the national economic recovery affected by the Covid-19 pandemic will soon materialize. Thus, Indonesia can rise again with a healthier economy.

) * The author is a former journalist

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