Government Affirms Commitment to Maintaining People’s Purchasing Power Through Economic Stimulus
By: Andhika Rachma *)
Amidst global economic uncertainty and various domestic pressures, the Indonesian government continues to demonstrate its commitment to maintaining people’s purchasing power. This is considered a strategic step in maintaining national economic stability, while avoiding potential social unrest that could arise due to increasing pressure on people’s lives, especially vulnerable groups. The government considers that in a situation like this, responsive and adaptive policies are very important, especially in ensuring that people continue to have adequate consumption capacity, as one of the main driving forces of the national economy.
The volatile global economic conditions are putting pressure on the Indonesian economy. Ongoing geopolitical conflicts, climate change that has an impact on agricultural output, and economic slowdowns in a number of major trading partner countries have forced the government to work extra hard to maintain domestic economic balance. Fluctuations in food and energy prices are a real challenge that cannot be ignored. Inflation that has been rising, although still under control, remains a major concern because of its very direct impact on household spending, especially in the group of spending on basic needs.
Coordinating Minister for Economic Affairs Airlangga Hartarto said that the stimulus prepared by the government is based on domestic consumption, with the main aim of maintaining people’s purchasing power amidst the declining consumption trend after religious holidays.
The government realizes that in this context, maintaining people’s purchasing power is not just an economic issue, but also a social and political issue that must be addressed seriously. People’s purchasing power is the foundation of sustainable economic growth. When people have the ability to buy goods and services, economic activity will continue to move, production will continue to run, jobs will be available, and ultimately, national stability can be maintained.
As a concrete form of this commitment, the government has rolled out various economic stimuli aimed at easing the burden on the community. One of the main instruments used is social assistance. Programs such as Direct Cash Assistance (BLT), Family Hope Program (PKH), and non-cash food assistance continue to be strengthened and distributed appropriately. The government has also expanded the scope of aid recipients in order to anticipate new vulnerable groups that have emerged due to post-pandemic economic pressures and price fluctuations.
In addition, subsidies remain a significant fiscal policy instrument. The government continues to provide subsidies for energy, especially fuel oil (BBM), 3-kilogram LPG gas, and electricity rates for low-income communities. The subsidies aim to keep the cost of living from rising sharply and remain affordable for the wider community. The government is also taking various steps to maintain food price stability, through market operations, strengthening food logistics reserves, and strategic partnerships with local business actors and farmers.
In the employment and small and medium enterprises (SMEs) sectors, economic stimulus is also directed at maintaining productivity and encouraging the recovery of people’s businesses. People’s Business Credit (KUR) continues to be expanded with low interest rates, some of which are even subsidized by the government. Various training and mentoring for MSMEs are also carried out massively to strengthen competitiveness and open wider market access, both domestically and internationally. Labor-intensive programs are also being intensified in various regions to absorb workers, increase income, and at the same time accelerate the development of basic infrastructure at the village and sub-district levels.
Efforts to maintain people’s purchasing power are also accompanied by strengthening coordination between government institutions, both central and regional. Regional governments are encouraged to be proactive in preparing programs that are directly related to the needs of the community, with budget support allocated through the Special Allocation Fund (DAK) and Village Fund. In addition, the central government continues to monitor and evaluate the effectiveness of ongoing stimulus programs so that they can be adjusted to the dynamics developing in the field.
On the other hand, the government also pays attention to the aspect of controlling inflation. In various national economic forums, the government has emphasized that controlling inflation, especially in the food group, is a priority. This is because the increase in food prices has a very large domino effect on people’s purchasing power. For this reason, the Central Inflation Control Team (TPIP) and the Regional Inflation Control Team (TPID) are strengthened with a broader mandate and closer cross-sector coordination, so that control measures can be carried out more quickly and effectively.
Finance Minister Sri Mulyani said that all of these stimuli can maintain household consumption amidst the potential for a global economic slowdown, as well as equalize public welfare.
Through these policies, the government has shown that maintaining people’s purchasing power is not just rhetoric, but a priority agenda in national development policies. In facing the challenging years ahead, economic stimulus policies will continue to be an important instrument relied on to maintain growth momentum, prevent inequality, and ensure that people’s welfare remains the main goal of development.
With the support of all parties, including the business world and civil society, efforts to maintain people’s purchasing power are believed to have a long-term positive impact, not only for post-pandemic economic recovery, but also in strengthening the foundation of a more resilient, inclusive, and equitable national economy.
)* Strategic issue observer
