The targeting of the government’s economic stimulus targets required careful handling as their impact would be a key determinant in a post-pandemic era, experts said Thursday (16/7).
Fitrian Ardiansyah, Country Director of the Indonesia Green Trade Initiative Foundation, said in an online discussion entitled “Navigating the New World” that the government must consider whether its plans for a sustainable economic stimulus could reach farmers and rural communities, who are now experiencing problems that disrupt their logistics and distribution channels.
“Can the economic stimulus reach farmers and rural communities? The problem they’re facing right now is that their logistics is interrupted, the food distribution chain is disrupted, creating less demand from local or overseas markets, “said Fitrian in the discussion that was organized by DBS.
Gita Syahrani, Executive Director of Lingkar Temu Lestari Kabupaten, said that the government’s current economic stimulus program was too urban.
She said that the stimulus should not only provide economic assistance to large companies, but also had to think about people on the poverty line, the middle class, and also the aspiring middle class. Because in times of pandemic, these types of community would be the most affected.
People in districts in the region were not only facing currently an economic crisis but were also starting to feel the impacts of a disaster crisis such as caused by landslides, floods and also forest and land fires in the dry season this year, she said.
“Why is the economic stimulus setting so urban? Because in the districts, not only are they facing an economic crisis but also a disaster crisis. Forest and land fires are starting to be felt around in this dry season” said Gita.
“Many people who were affected by the pandemic and lost their jobs have returned to their villages and are trying to clear land in an unsustainable way, hence leading to landslides or floods,” she added.
The official website of the Coordinating Ministry for Economic Affairs of Indonesia showed that the government has designed a fiscal stimulus to deal with the impacts of COVID-19.
The stimulus includes the relaxation of income tax Article 21 and Article 22, the acceleration of export and import procedures for reputable traders, increase and accelerate export-import processing services, and better supervision through the development of the National Logistics Ecosystem (NLE).
Regarding the 21 PPh scheme, the government will 100 percent bear the income tax for workers for up to Rp. 200 million in the relevant processing industry sector while in relations to the 21 PPh scheme, tax relief would be accorded to 19 particular sectors.
Gita said that in allocating its economic stimulus the government must prioritize the ecological function of the environment. It not only should protect beautiful trees, but also focus on the function of water, soil quality, and also the quality of air.
Gita also said the government must design programs that met the needs of the community while prioritizing domestic supply chains at the provincial and district levels.
For Agus Sari, Chief Executive Officer of Landscape Indonesia, one of the crucial factors in determining the placement of a sustainable economic stimulus is the availability of the asset itself.
“The availability of the asset will be a factor, which sector should receive a stimulus, the indicators must be closely monitored, and used by our financial sector to determine which sectors and companies will be given the stimulus, especially in the era of ‘New Normal’ or I called it a ‘Better Normal’ era,” Agus said.
The government, especially in the financial sector, will be able to determine the placement of the economic stimulus more easily if it had made a special planning, said Agus, who also added that if the stimulus was aimed at companies, those companies that have been proven to implement the sustainability system should be the ones entitled to receive it.
“Companies that implement sustainable systems should receive the stimulus,” he added.
Fitrian added that if the private sector had a good business model, they would not need any stimulus to survive the pandemic era.
“If the private sector really has a good business model, their productivity will certainly increase and also social or land conflicts as well as forest and land disasters can certainly be minimized,” he said.
“This pandemic era could be an opportunity to reshape our business model, infrastructure, or even our market,” Fitrian said.