Indonesia Under the New Normal: Challenges and the Way Ahead

Robert Sparrow, T Dartanto, Renate Hartwig

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99 Citations (Scopus)
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Abstract

As the Covid-19 crisis deepened in 2020, President Joko Widodo announced that Indonesia should prepare for the ‘new normal’. But when social distancing restrictions were relaxed in June to encourage economic recovery, the virus was not yet contained in Indonesia. Since then, the rate of infection has been rising faster than in many neighbouring countries. The pandemic has hit the economy hard, with a 5.3% reduction in GDP in the second quarter, the worst economic slump since 1998. In this Survey, we look at how Indonesia is preparing for the new normal. We argue that the government is focused on short-term recovery and does not have a clear strategy to address the medium-and longer-term implications of Covid-19. The response to the virus relies on public compliance to public health measures. There is a clear lack of emphasis on reducing the rate of infection through effective testing and tracing and enforcing social distancing and mobility restrictions. The government has developed an economic recovery plan that concentrates on cushioning the short-term impact of the crisis and supporting the poor and near-poor, rather than reducing long-term poverty and preventing structural changes in unemployment. Finally, we find that the pandemic is undermining the long-term financial sustainability of Indonesia’s social health insurance system. The education sector is reasonably prepared for extended school closures and distance learning. Yet there is no strategy to address the accumulated learning losses resulting from this crisis.

Sejalan dengan semakin dalamnya krisis Covid-19, Presiden Joko Widodo mengumumkan agar Indonesia bersiap menyambut kondisi normal baru. Namun ketika pembatasan sosial dilonggarkan di bulan Juni demi mendukung pemulihan ekonomi, penyebaran virus sesungguhnya belum bisa dikendalikan di Indonesia. Sejak saat itu, tingkat infeksi terus naik, lebih cepat dari banyak negara tetangga lainnya. Pandemi Covid-19 telah memukul ekonomi dengan keras, dengan kontraksi 5,3% pada PDB Indonesia di Triwulan II, kondisi ekonomi terparah sejak 1998. Dalam survei ini, kami melihat bagaimana Indonesia mempersiapkan diri menuju kondisi normal baru. Kami berpendapat bahwa respon pemerintah berfokus pada pemulihan jangka pendek, namun tidak memiliki strategi yang jelas untuk menyasar dampak jangka menengah dan panjang dari Covid-19. Respon terhadap virus bergantung pada kepatuhan publik terhadap aturan-aturan kesehatan. Terdapat kelemahan penekanan dalam mengurangi tingkat infeksi melalui uji efektif dan pengecekan (testing and tracing) atau dalam memberlakukan pembatasan sosial dan restriksi mobilitas. Pemerintah telah membangun rencana pemulihan ekonomi yang lebih berkonsentrasi kepada upaya mengatasi dampak jangka pendek dari krisis serta mendukung orang miskin dan rentan miskin, dibandingkan upaya penanggulangan kemiskinan jangka panjang dan potensi pergeseran dalam komposisi pengangguran. Akhirnya, kami menemukan bahwa Covid-19 juga melemahkan keberlanjutan finansial jangka panjang dari sistem jaminan sosial kesehatan. Sektor pendidikan cenderung lebih siap untuk perpanjangan penutupan sekolah dan penerapan sistem Pendidikan Jarak Jauh (PJJ). Namun demikian, tidak ada strategi untuk mengganti akumulasi pendidikan yang hilang sepanjang krisis ini berlangsung.
Original languageEnglish
Pages (from-to)269-299
Number of pages32
JournalBulletin of Indonesian Economic Studies
Volume56
Issue number3
DOIs
Publication statusE-pub ahead of print - 4 Dec 2020

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