Indonesia needs to “protect the people” and spend more to support them during the pandemic – and this is unlikely to hurt economic recovery, the country’s finance minister Sri Mulyani Indrawati said Tuesday.
The so-called social safety net for Indonesians has increased by 20% while health spending has increased by almost 19%, Sri Mulyani told CNBC’s Squawk Box Asia on Monday. Indonesia’s social safety net policy extends government support to the poor and those affected by the economic crisis.
“This definitely shifts our focus to the budget to protect people,” she said. “Of course we don’t want this to take too long, so it won’t affect our economic performance in the third quarter.”
Indonesia’s economy showed “very strong recovery 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, to ensure that the normalization of economic activity does not come at the expense of the increasing Covid cases,” she said, adding that an increase in infections could overwhelm the health system.
Covid spike in Indonesia
Indonesia is struggling with the highly transmissible delta variant, which has driven daily cases to record highs in recent weeks.
According to statistics website Our World in Data, Indonesia has seen a huge surge in Covid deaths, with a seven-day moving average of 3.95 new confirmed deaths per million people daily on Monday, up from 0.69 deaths per million on June 16.
For comparison, India’s worst number on the same statistic, hit in May, was 3.04 deaths per million people.
The rate of vaccination in Indonesia has slowed worldwide, a trend that is largely observed in Southeast Asia.
According to Our World in Data, by July 16, around 5.89% of the Indonesian population had been fully vaccinated against Covid-19.
By comparison, Thailand has fully vaccinated almost 5% of its population, while the Philippines has reached almost 4%. Another country in the region poised for resurgence, Malaysia has 13.3% of the population vaccinated. Singapore is a regional outlier with one of the fastest vaccination rates in the world – more than 44% of the population are fully vaccinated.
Indonesia put in place emergency measures earlier this month to contain the surge in infections. These restrictions are due to run until July 20, although preparations are being made for an extension, according to Mulyani.
“The president is still discussing with the cabinet exactly how long it will be extended,” she said.
She identified three factors likely to affect the length of the extension: the number of virus cases, the ability of healthcare facilities to deal with new infections, and vaccination rates.
“It is a good sign that we are now seeing a trend decline in cases, particularly in the Java region – including Jakarta. And in Bali, vaccination has already reached … nearly 80% of the population,” the minister said .
Now that the country has secured more than 150 million doses of vaccines, the race is on for “at least 2 million” vaccinations per day as the military, police and nurses at the village level are mobilized for the effort, she added.