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Indonesia

An independence day without the fanfare

Covid-19 casts a dark shadow and heralds economic gloom as Indonesia turns 75

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An independence day without the fanfare

Men perform Tarian Caci (a whip fighting dance), part of Manggarai culture in East Nusa Tenggara, to mark Indonesia’s Independence Day celebrations in Jakarta in August 2019. (Photo: Siktus Harson/UCA News)

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Indonesia will mark its Independence Day in a matter of days. But sadly, this year’s celebration is going to be a gloomy affair with no yummy birthday cakes or fancy gala dinners as the country stands on the brink of economic recession.

Indonesia declared its independence on Aug. 17, 1945, after centuries of Dutch rule and more than three years of occupation by Japan.

This year was supposed to be a good one economically for Indonesia, according to growth forecasts. However, with the country caught up in the tentacles of Covid-19, those hopes have evaporated.

Independence Day was expected to be a much-celebrated event, another milestone in Indonesian history with the laying out of a grand strategy towards “Indonesia 2045,” its centenary year. But this does not seem that important now.

Authorities have warned people to avoid extravagant celebrations and large gatherings. They may join a flag-raising ceremony livestreamed from the presidential palace via social media or television, or just pray at home.

In normal circumstances, the president’s State of the Nation Address on the eve of the big day would highlight the country’s achievements, reassess what has been done and map out what is to be done next.  

President Joko Widodo is scheduled to deliver his speech before parliament on Aug. 14. He will most probably speak about a nation obliterated by the pandemic.

The president’s speech is expected to try and calm an anxious nation and, most importantly, explain to the people what the government is doing to try and recover from the crisis, or as much as possible avert or cushion the blow from an imminent recession.

This independence anniversary was supposed to be special, a diamond jubilee year signifying Indonesia had survived its fledgling years and was more mature, stronger and more powerful.

But with the Covid-19 pandemic showing no sign of stopping, Indonesia is turning 75 at the wrong time. The pandemic has pushed the country into a multidimensional crisis and to the brink of an economic recession.

Before Covid-19, Indonesia enjoyed a stable economic growth rate above 5 percent. But things have changed completely since the coronavirus began infecting the country, prompting the government to impose months of social restrictions that have been enough to kill the economy.  

As a result, in the first quarter of this year, Indonesia’s economy began to suffer, with a growth rate of 2.97 percent.

On Aug. 5, the Central Statistics Agency announced an alarming slide in the second quarter with a deep contraction of 5.3 percent.

Although it’s better than some other countries, experts have warned that Indonesia is one step away from an economic recession, unless the third quarter sees a positive growth rate, which is impossible with Covid-19 restrictions still in place.

Analysts estimate that the country's overall economy would contract by another 2 percent, and that means the road to recovery becomes longer and steeper. With continued contraction, Indonesia, which was once called an “Asian tiger” for its strong and stable economy, will be on its knees.

So what’s left now for the country of nearly 270 million people?

Firstly, there are the people — the human capital. Indonesia remains the world’s fourth most populous nation after China, India and the United States, and it is one of the world’s biggest democracies.

It is indeed a daunting task for the government to sort out such a mess, more so when about 26.4 million people are poor, of which 1.63 million were added recently to this figure due to the pandemic, while more than 1.5 million people are jobless.

The government has budgeted 677.2 trillion rupiah (US$48 billion) for Covid-19 stimulus packages, of which $14.5 billion is for social protection, basic food assistance, pre-employment cards, discounted electricity bills, direct cash assistance and village funds.

The government has also allocated $8.7 billion to help small and medium enterprises (SMEs) affected by Covid-19. SMEs are crucial as they employ more than 90 percent of the labor force.

This stimulus package is certainly not enough to fix the damage, but this current crisis is not entirely about money. What the Indonesian public expects from the government is the assurance that the crisis is under control and will end soon.

The people want to hear that from Widodo in his Independence Day speech this weekend. Indonesians don’t mind if there is no party, but the government should be able to show them the way out of this misery.

Most importantly, the president must be able to provide hope with a focus on new economic gains, especially those that directly improve household earnings.

Even though statistically it is not possible to save the country's economy from recession, the president must convey this, yet boost people’s morale in this time of crisis.

People don’t want to hear too much political eloquence. Instead, the government should focus on a strategy to help labor-intensive industries so that people can get back to work.

A government remedy for a country suffering under Covid-19 would be the best gift for the people on Indonesia’s 75th independence anniversary.

The views expressed in this article are those of the author and do not necessarily reflect the official editorial position of UCA News.

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