Source: Katadata.co.id | 14 Jun 2020

The government has decided to implement a new normal policy to encourage economic recovery. Although, the Covid-19 pandemic has not shown any signs of ending.

President Joko Widodo explained that a new life order in the midst of the new corona virus pandemic is a necessity that must be lived. According to him, living side by side with Covid-19, taking into account the data and facts on the development of the pandemic, does not mean giving up.

He invited the public to fight the plague to do activities by prioritizing the Health protocol. That way, residents can return to productive activities and stay safe.

“Public safety must still be a priority. Our needs have definitely changed to address the risk of this outbreak. That’s a necessity, that’s what many people call a new normal, ”he said, last May 18, 2020.

One of the President’s considerations is a statement from the World Health Organization (WHO) which assesses that the corona virus originating from Wuhan will not disappear soon. The virus that attacks the respiratory tract is predicted to remain in society for quite a long time.

“This means that we must coexist with Covid-19. As I said before, make peace with Covid-19. Once again, the important thing is that people are productive, safe and comfortable, ”he said.

The president is optimistic that if people comply with health protocols, such as maintaining a safe distance, wearing masks, and frequently washing hands with soap, then transmission can be prevented.

The Head of State also stressed that the government will continue to monitor the best time for the start of the new normal. Some business sectors with a small risk of transmission, but with a large economic impact, can be a priority for returning to operations.

Coordinating Minister for the Economy, Airlangga Hartarto, said that the protocol for running the new normal was being made to get back the wheels of the economy. The strategy, said Airlangga, would include criteria that determine the readiness of each region.

The criteria that the government will use, among others, is the reproduction rate to see the development of a new type of Corona virus pandemic in a number of areas.

If an area has a reproduction rate or R0 above 1, then the area is still in a high transmission stage. Meanwhile, if R0 is below 1, it indicates that the spread curve of Covid-19 is starting to slope. “If there is less than one, it can be opened for a new normal,” he said.

Another criterion is regional readiness which is assessed based on epidemiological aspects. Local government preparedness and community discipline are also determining factors.

Later, the central government will give a score of 1-5 which represents the readiness of the region to enter a new phase of life. Stage 1 is not ready, while stage 5 is ready.

A number of industrial sectors are also preparing operational standards to enter a new normal life which will be coordinated with the Task Force for the Acceleration of Handling Covid-19.

According to the plan, the new normal as a new standard of activity will also apply in various sectors, such as tourism, education, restaurants, accommodation, houses of worship, transportation and others.

Based on data until mid-June 2020, only 92 urban districts in Indonesia have not been affected by Covid-19, the remaining 136 are low risk, 220 medium and 66 high.

The budget to support the implementation of new normal policies, the government has increased the budget for handling the Covid-19 pandemic to Rp. 677.2 trillion.

Of this amount, Rp. 589.65 trillion was intended for the implementation of the National Economic Recovery (PEN) program. Among them, for social protection assistance of Rp. 203.9 trillion, tax incentives of Rp. 123.01 trillion, restructuring of MSMEs and labor-intensive Rp. 82.2 trillion and interest subsidies of Rp. 35.28 trillion.

With the addition of the budget, the budget deficit will also be widened to 6.34% of the Gross Domestic Product (GDP) or Rp. 1,039.2 trillion.

The government realizes that this program needs to be implemented in parallel with the new normal because the Indonesian economy is experiencing heavy pressure from the production side. In addition, people’s income and purchasing power have also continued to decline, even though the biggest component that makes up the Gross Domestic Product (GDP) is household consumption.

This condition, if it occurs protracted, can lead to a decline in the class of society which has the potential to create new social problems.

However, the government also has limitations. Funding for the community or industry is only sufficient for about six months.

With the disbursement of various stimuli, the implementation of national economic activities in various sectors is expected to recover gradually.

Activities that are in line with the new normal are also expected to increase the return of tax revenues that occur through buying and selling transactions. This tax is important because it is impossible for the government to continue to rely on financing from debt or loans to deal with the impact of Covid-19.

The Assistance Team for the Coordinating Minister for Economic Affairs Raden Pardede confirmed that a new normal policy will occur until the corona virus vaccine is found. “Hopefully next year we will get the vaccine and it will spread to all Indonesian people,” he said in a webinar in Jakarta, Tuesday (9/6).

Later, when a vaccine has been discovered as early as 2021, this senior economist estimates that Indonesia’s economy will only partially recover. “This may take another half to one year, from 2022 to 2023 he will return to pre-Covid-19,” he said, quoted by Antara.

Previously, Indonesia’s economic growth was only 2.97% in the first quarter of 2020. In fact, the first case of Covid-19 in Indonesia was only announced on March 2, 2020. The economy is predicted to decline to its lowest position in April-May 2020 due to slowing household consumption performance. .

For this reason, the main targets in the new normal policy are to restore economic growth, create jobs and reduce poverty.

Not only from the government, Raden encouraged the private sector to also support the national economy after the pandemic ended so that the country’s economy could recover. “This is expected to be a trigger to move us to grow in the future,” he said.