Directives of President of the Republic of Indonesia to Regional Heads across Indonesia, 28 April 2021, at the State Palace, Jakarta
Assalamu’alaikum warahmatullahi wabarakatuh,
Peace and prosperity be upon us all,
Greetings of Virtue.
Distinguished Vice President, Ministers;
Honorable Governors, Vice Governors, Regents, Vice Regents, Mayors, Vice Mayors and all ranks of Forkopimda (the Regional Leadership Communication Forum);
Ladies and Gentlemen.
I would like to deliver few things, especially on the soon approaching Eid al-Fitr in mid May. Why do we have this meeting? There are two important things; first related to COVID-19 and second related to the economy. I will constantly repeat these issues.
Why COVID-19? Because we know the development of COVID-19 cases in India. I need to remind you this, because we are also approaching the Eid Al-Fitr. India in the month leading to October, November, December to January, managed to flatten the curve and I even remember that in January we called the Indian Minister of Health, on what is the key? He said that the key is micro lockdown. So, we adopt it here, that is the micro-based activity restrictions (PPKM Mikro) policy.
At that time, India managed to reduce up to 10,000 cases per day, but we know that these days there is a very exponential surge in India to 350,000 active cases per day. This is what we must be careful with. Be careful with developments in India and also not only in India but also in Turkey, in Brazil, and some countries in the European Union. Be careful, no matter how small the active cases in the province, in the regency, in the city where you lead, don’t lose your guard. Monitor the numbers, monitor the curve, monitor them daily. Once it rises in a small number, immediately press it down again, so that it continues to decline.
Be careful with long holidays, the long holiday of Eid al-Fitr is approaching. Remember last year, there were four long holidays, the spikes were high. Last year’s Eid al-Fitr, the number rose to 93 percent, last year’s August holiday, it rose to 119 percent, October holidays, it rose 95 percent, the last New Year holidays, it rose to 78 percent. Therefore, be careful, be careful. Easter Holiday two weeks ago, it increased by more or less 2 percent, be careful. I see that some of these regions, the number has started to increase, be careful. In the regions of South Sumatra, Aceh, Lampung, Jambi, West Kalimantan, East Nusa Tenggara, Riau, West Sumatra, Bengkulu, Riau Islands, be careful, there is an increase, because we always follow the daily graphics and curves.
I remember very well, in January (of 2021) we had reached 14,000 to 15,000 daily active cases. Now, we are at 4,000, 5,000, 6,000, we managed to suppress it in January. Our Bed Occupancy Ratio (BOR) is above 80 percent and I also always monitor it. This is what I always monitor daily, at Wisma Atlet (the BOR) has reached 92 percent at some point, but now, two weeks ago it has dropped to 21 percent. Now, it has risen a little back to 25-26 percent, but we will continue to press it down.
So once again be careful with Eid mudik (annual exodus), be careful. Check, control, the arrangement for the mudik is very important. On survey related to mudik, before the mudik ban, there are 89 million people who wanted to go on a mudik, 89 million people, approximately 33 percent of our population. Once there is a ban on it, it decreased to 11 percent, but the figure is still 29 million (people). Once we implement a dissemination on mudik ban, we did it, the governors, regents, mayors also did it, it decreased to 7 percent, but the figure is still high, be careful, 18.9 million people will still go on a mudik. Therefore, we should continuously disseminate the mudik ban to reduce the number even further.
The most important thing is how we emphasize once again on discipline, strict discipline of health protocol, the key is there, the key is there. Do discipline the community strictly on health protocols. I am really still worried about the upcoming Eid al-Fitr mudik, but I believe that if the regional governments are assisted by Forkopimda, everyone is active to regulate, control the discipline of health protocols, I am sure the increase will not be like last year’s 93 percent.
Second, on vaccination. I hope that mass vaccinations, vaccinations in the regions do not stop. The task of the Central Government is to prepare the vaccine, but if there is a vaccine, don’t let it get stocked up. A five-percent stock is enough. Do give the community the injections immediately, give the priority targets immediately, I repeatedly told you about the injections. Because until 27 April (2021), we have only administered 19 million doses of vaccine and we must continue to pursue (the number), so that in July we can meet the target of approximately 70 million people. Who should receive the jabs first? I think I have said it many times and I don’t need to repeat it.
Then, on the economy. With the current conditions on the results of our efforts to reduce the rate of COVID-19 spread, to reduce daily cases of COVID-19. In March, April, it is already visible. The economy is almost back on track, our national target in 2021, our growth target of 4.5 to 5.5 percent, we can achieve it. It will depend on our economic growth in the second quarter of 2021. What does that mean? April, May, June are the deciding months.
If we can suppress the COVID-19 without causing a shock to the economy, this is a success. Our target of approximately 7 percent must be achieved. If that can be achieved, God willing, in the next quarter it will be easier.
Why are we optimistic? Because it can be seen now that factories, industries, manufactures, are already moving. This is reflected in the so-called Purchasing Managers Index (PMI), which before the pandemic was at 51 percent, now it is already above the norm before the pandemic, which is already at 53.2 percent, before the pandemic, it was at 51 percent.
Then on electricity consumption, there has been a growth. Electricity consumption has increased, usually it was negative. This time, it has increased by approximately 3.3 percent, be it those in industries, in households or in governments, all of which have increased consumption. This is also what we should be grateful for.
Then, on imports of capital goods. We are all aware that imports are important, but it must be capital goods, not consumer goods, it has increased by 33.7 percent, it was previously negative, it has grown 33.7 percent.
The consumer confidence index has also increased. The previous one was 84.9 percent, 85.8 percent, this time, it is 93 percent. This is something we should be grateful for. It means we have to be optimistic.
The retail sales index increased to 182.3 percent in March, meaning that there is demand, there is spending, there is consumption, it can be seen in the retail sales index. We need to know all of these numbers.
Therefore, I invite all provinces, regencies and cities to immediately spend the regional budgets. Because the figure that I saw, it was only for personnel spending, but also only 63 percent.
Capital spending as of the end of March was only at 5.3 percent when the money circulation in a region really determines economic growth. So the transfer from the Central Government to the regions is not spent but it is put in the bank. This is what will cause the slowdown of economic growth. Yes, be careful of this.
At the end of March, I saw that there were Rp182 trillion in regional banks, not decreasing but increasing by 11.2 percent. It means the budget is not spent immediately. How will economic growth in the regions increase if the money is deposited in the banks? Be careful, I have repeatedly told Minister of Home Affairs to remind all regions to speed up their spending, regional budget spending, both personnel and capital spendings. But most importantly, this capital spending should be prioritized so that there is a circulation of money in the regions. Be careful, Rp182 trillion, this is a substantial amount of money. If this is spent immediately, the circulating money in society will significantly affect economic growth.
Social assistance, MSMEs assistance, Direct Cash Assistance (BLT) for Villages, immediately push the agenda to disburse them to the community, so they can spend them. If there is spending, it means that there is demand. If there is demand, it means that there will be economic growth in the region. So immediately disburse the BLT for Villages, because as of last April, only 32 percent had been distributed, 32 percent was still a very small one, only Rp1.5 trillion. I always monitor these figures. So this afternoon I remind you again because it is important for regional and national economic growth. If there is economic growth in the regions, then in aggregate it will become national economic growth.
What I also need to remind you, the last one is about investment. I also repeatedly stated that the ease of service, speed of service shall be provided by the regions, especially those related to permits. I keep repeating this because I still hear that matters related to permit are delayed and take a long time, so investments, be it small, medium or large are stalled because of slow permits.
The Job Creation Law mandates us to grant permits quickly. Once again, the key to our economic growth, our national economy, the regional economy is very dependent on investment, because the State Budget cannot grow significantly. See the regional budgets, the year-on-year (you) does not grow significantly as well. This means that we need investment from the private sector. Investments from the private sector will spring if we can provide fast licensing services. The key is there, the key to our national economic growth is investment. Through investment, there will be additional money circulation at the regional and national levels. Through investment, our tax income will increase. Investment in a region means the widest possible job opportunities will be available.
This concludes my directives in this afternoon.
I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh. (FI/MUR)