Introductory Remarks of President of the Republic of Indonesia at the Plenary Cabinet Meeting through Video Conference on the Indicative Ceiling of the State Budget Bill for 2021 Fiscal Year Wednesday, 6 May 2020 at the Merdeka Palace, Jakarta
Assalamu’alaikum warahmatullahi wabarakatuh.
Distinguished Vice President,
Ladies and Gentlemen, participants of the Plenary Cabinet Meeting,
Before I give the opportunity to Minister of Finance to explain the indicative ceiling plan for State Budget Bill for the 2021 Fiscal Year, I would like to explain several important things to the Ministers and Head of Institutions.
First, the report from the Central Statistics Agency (BPS) shows that the Indonesian economy in the First Quarter of 2020 grew 2.97 percent, year on year. Once again, it grew 2.97 percent. The delta fell 2 percent, slower than the growth in Quarter 4 of 2019, which grew 4.97 percent. Even though it only grew 2.97 percent, compared to other countries that have released growth rates report, our country’s economic performance is still relatively good.
Some countries experience contraction and of course record negative growth. China (economic growth) fell from plus 6 percent to minus 6.8 percent, meaning that the year on year delta is 12.8 percent; for France, the delta is 6.25 percent, minus; for Hong Kong, the delta is 5.90 percent; for Spain, it is 5.88 percent; and Italy’s delta grew negative 4.95 percent.
Second, COVID-19 has hit the economies of many countries, including our country, on two sides at once, namely the demand side and the supply side, and the production side. From the supply side, the Indonesian Manufacturing Index (PMI) in April 2020 also experienced the deepest contraction compared to other ASEAN countries. Indonesia was at 27.5 level, lower than South Korea (41.6), Malaysia (31.3), Vietnam (32.7), and the Philippines (31.6). We must pay attention to the Indonesian Manufacturing Index and find the solutions to overcome the contraction.
To that end, I ask Ministers who oversee the economy to take into account the figures that I have stated in detail. The sector and the subsector that experience the deepest contraction must be reviewed in detail and the stimulus policy must be designed. The economic stimulus program must be designed and it must be well targeted. We must design recovery scenario in each sector or subsector.
The data shows that there are subsectors that contributed negatively to growth in the First Quarter of 2020. Food crops recorded minus 0.31. Be careful with the number. Once again, be careful with the number. The food recorded minus 0.31. Once again, I have stated several times, the FAO has warned us against food crisis. What does it mean? The agricultural sector must be encouraged to produce while still complying with health protocols. Air transportation recorded minus 0.08; oil, gas, geothermal mining recorded minus 0.08; industrial goods, metals, computers recorded minus 0.07; accommodation sector recorded minus 0.03; machinery and equipment industry recorded minus 0.03.
(We must also take into account) the numbers of the demand side. The inflation rate in April 2020 was recorded at 0.08 percent, much lower than the period of Ramadan in previous years. In terms of expenditure, household consumption (2.84 percent) and Government expenditure (37.4 percent) are locomotive of growth. However, consumption for LNPRT (Nonprofits Entities Serving Households) contracted to minus 4.91 percent. It must be examined in detail. The consumption of the Nonprofits Entities Serving Households must be examined.
Therefore, the distribution of social assistance from the Central Government, social assistance from local governments, from the Village Fund as well as cash-intensive program must be implemented these weeks. The social assistance must be received by the people and the labor-intensive program must be running.
Third, I remind you that the focus of our work right now is to control COVID-19 as soon as possible, to reduce it as soon as possible. The country that will become the winner is the country that is successful in containing the COVID-19. To that end, I order all Ministers, Head of Institutions, Commander of the Indonesian National Defense Forces (TNI) and Chief of the Indonesian National Police (Polri) to mobilize all forces to control COVID-19 and overcome the impacts.
Our target for this May must be achieved, that is, the curve must go down, and we must enter a moderate stage in June and a mild stage in July. The measures should be taken not only by the Task Force but also by all elements of the nation, the Government, social organizations, volunteers, political parties, and the private sector. The measures must be well orchestrated. I am sure that if we are united, if we maintain our self-discipline in implementing health protocol and all the plans that we have prepared, we will be able to overcome COVID-19 as soon as possible.
Fourth, I remind you that in COVID-19 handling, all levels of Government must truly comply with the principles of good governance, and uphold transparency and accountability. Our target is the safety of all people, both in the health sector and in the socioeconomic sector. In achieving the target, once again, all of us, the Government, must move quickly because the situation is truly extraordinary and requires speed and accuracy. However, in carrying out this task, the Government, all of us, must also be ready to be monitored, ready to be controlled, not only by state institutions such as the House of Representatives (DPR) or the Supreme Audit Agency (BPK), but also by all citizens.
I think that concludes my introductory remarks.
Translated by Ridwan Ibadurrohman
Reviewed by Yuyu Mulyani