Finance Minister: Countries Should Collaborate to Fix Supply Chains Issues
Date 27 Maret 2020
In a bid to fix supply chains problems especially on medical devices, all countries must continue to collaborate in increasing production capacity, Minister of Finance Sri Mulyani has said.
“The problem is bottlenecks in supply chains, especially in medical devices, therefore it needs to be upgraded,” the Finance Minister said after accompanying President Joko “Jokowi” Widodo at the Extraordinary Virtual G20 Leaders’ Summit from the Bogor Presidential Palace, West Java Province, Thursday (26/3).
China, the Minister stated, as the country that suffered the first Covid-19 attack, is now committed to increasing its production capacity for medical devices.
“Other countries such as Indonesia which have the capacity to produce medical devices will also increase (the production) so that it will allow supply chains to be restored,” Sri Mulyani said.
On non-health related matters, the Minister will monitor the trade barriers, many of which have been relaxed. “This must be increased so that the momentum for cooperation in the field of trade and especially on the supply of goods that are very important, needed by all countries, can be provided,” she said.
The 2020 condition, the Finance Minister said, has been negatively assessed by the IMF although it has not been predicted how deep and how long it will occur. This, she added, depends on the ability of all countries to jointly fight the economic downturn.
“For Indonesia, we will do the whole instruments together with Bank Indonesia, the Financial Services Authority (OJK), and all instruments in the economic field,” she stated.
Therefore, the Minister said, the Government has relaxed monetary and fiscal policies. “At the moment, we are finalizing the entire package resulted from the submission of various parties, various ministries, and local governments during the President’s meeting with the Governors, in hope to formulate an appropriate fiscal policy,” she added.
This, the Minister continued, includes a third package or a whole package in hope to support: first, the handling of Covid-19 problems in terms of health; second, protection of the poor and people who are liable to layoffs and liable in terms of livelihood.
“The sources of the livelihood of many people, due to a limitation in peoples’ activities including by isolation, self-distancing, social distancing and the decrease of peoples’ mobilities, are affected, she stated.
The Government, the Minister continued, is currently formulating policy in order to support those people which will soon be presented in the Cabinet Meeting and will certainly add to the deficit in the State Budget.
“We have also met with the House of Representatives to convey that if the deficit is above 3 percent, we will relax the deficit limit. This is being done by the Indonesian Government, us, in order to minimize the possibility of its impacts,” she continued.
On the other hand, she said, some of industrial sectors have the opportunity to increase the production capacity of urgently-needed medical devices.
The Finance Minister stated that in terms of multilateral institutions, the World Bank together with multilateral institutions such as ADB (Asian Development Bank), AIIB (Asian Infrastructure Investment Bank) and regional development banks, would increase its resources for countries facing the threat of the pandemic, in terms of health, social safety net, and supporting industry and trade.
“They can provide loan programs so that countries are able to prepare in terms of health, providing protection to the poor, namely social safety net, and ability to rebuild the industry,” she explained.
IMF, the Minister added, is currently making efforts to increase its resources in order to provide swap lines to all central banks in need of assistance.
China’s President Xi Jinping has also offered China’s knowledge and experience in dealing with Covid-19, including ways to improve production capacity.
This virtual meeting, according to the Minister, showed that solidity among countries remains strong, which was preceded by a G20 meeting for ministerial and central bank levels.
“This is reminiscent of events such as in 2008-2009, so actually in the difficult time that is global and knows no boundaries, the G20 and its cooperation with the United Nations, the IMF, World Bank, and WHO is very important and that is realized by all leaders,” she said.
In the short term, the Minister continued, the G20 will utilize all resources to jointly combat Covid-19.
“In the medium term, we will continue to support recovery in the health sector, the economic and social sectors, and in the financial sector so that they can support the recovery of all countries which are currently very negatively affected by Covid-19,” she concluded. (TGH/EN)
Translated by: Fairuzzamani Inayatillah
Reviewed by: Mia M. Bonaedy