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Jakarta, CNBC Indonesia – The Finance Minister in the era of President Susilo Bambang Yudhoyono (SBY) Chatib Basri revealed that the Covid-19 outbreak caused the economy to stagnate. It is said that the economy cannot move 100%, so ‘Zombie companies’ or companies that are compared to the undead will emerge.
“Weak purchasing power, the behavior of the upper middle class who is careful due to health, changes in behavior [belanja online]. The health protocol makes the economy unable to operate at 100% because economies of scale are not achieved, “Chatib was quoted as saying on Tuesday (1/9/2020).
“If the economy only operates at 50%, then for many sectors the breakeven point will not be reached. Companies can survive as long as they can pay variable costs like wages, etc., but they are not profitable. Companies can become zombie companies.” he further explained.
Chatib conducts research based on data from Google and Humdata.org. Google Mobility shows that after the opening of the activity, the mobility of people increased considerably. However, it gradually flattens out and slows down.
Several community activities grew rapidly in June coinciding with the gradual opening of the economy and the relaxation of social restrictions. Then, it began to fall in July and August.
The movement of people to public office grew 13 percent in June. Then it fell to 1.4 percent in July, even down 0.2 percent in August.
Meanwhile, senior economist Faisal Basri believes that the Indonesian economy will rebound if the curve for Covid-19 transmission cases tilts or falls.
 Photo: M Chatib basri Photo: Detikcom / Ari Saputra |
Currently, Indonesia is still seeing an increase in the addition of Covid-19 cases every day. In fact, the number of patients every day increases by 2,000-3,000 patients.
As of August 31, 2020, there were 2,743 additional new cases. Therefore, the total number of Covid-19 patients in Indonesia is 174,796. Meanwhile, the number of patients who died from Covid-19 reached 7,417 people on Monday (8/31/2020).
According to Faisal, the key to boosting economic activity is to increase Covid-19 testing for all people in Indonesia. He is also concerned that the current government is no longer concerned about handling Covid-19, and more about prioritizing the national economic recovery (PEN).
“The key to increasing economic activity is to try. We are much smaller than our neighbors […] What I’m afraid of, the government’s response is that it doesn’t care anymore about Covid-19, however [lebih peduli] to economic recovery, “Faisal said during a hearing with Indonesian House of Representatives Committee VI on Monday (8/31/2020).
In addition, according to him, in the Presidential Regulation Number 82 of 2020 on the Covid-19 Management Committee and the National Economic Recovery (PEN), there is only one health element in it, namely the Ministry of Health. The rest is economic and political defense.
Looking at the structure of the Covid-19 and PEN Management Committee, it appears that Indonesia is only more inclined to restore the economy.
In fact, according to him, if Covid-19 transmission cases fell, economic growth would automatically increase. Therefore, according to Faisal, it is impossible for the government to want economic growth to increase, at a time when the transmission of the Covid-19 case continues to increase.
“First we have to control the transmission of cases, then the economy can go up. If the cases have gone down, automatically economic growth will also increase without momentum,” Faisal said.
So it’s not surprising, Faisal said, that economic growth in the third quarter of 2020 is likely to be -3%.
(dru)
