Remarks of President of the Republic of Indonesia on the Opening of the Brainstorming Meeting of 100 Indonesian Economists, 26 August 2021, at the State Palace, Jakarta
Assalamu’alaikum warahmatullahi wabarakatuh,
May prosperity be upon us,
Greetings of virtue.
Honorable Ministers of Indonesia Onward Cabinet;
Honorable Executive Director of INDEF (Institute for Development of Economics and Finance) Bapak Tauhid Ahmad;
Honorable 100 economists;
Honorable Commissioner of Transmedia, President Director of CNBC, , President Director of Detik Network, Editors-in-chief of media;
Distinguished guests, Ladies and Gentlemen,
COVID-19 pandemic has been pushing usto take extraordinary measures due to multidimensional critical situation. Measures that we have never taken before, or even measures that we have never thought about.
Our country and many countries in the world have been under unrelenting pressures. However, alhamdulillah, the number of daily cases in our country shows a better trend. Remember, in early February, the number of daily cases in our country reached approximately 12,800 daily cases per day. Later, on February, March, April, May, June, and even in 14 May, the number declined to 2,633 daily cases. Unfortunately, due to the Delta variant of Covid-19, the number jumped significantly. On 15 July (2021), it reached to 56,000 (daily cases).
At that time, the epidemiology team told me, “Pak, we should be careful because the number can reach to 80,000 daily cases, and then goes up to 160,000 (daily cases). If we cannot stop it, it can go up to above 400,000 (daily cases).” Alhamdulillah, after it reached to 56,000 daily cases, yesterday the number becomes 18,000. It means, there has been a decline in numbers.
Additionally,[there is] an update concerning Bed Occupancy Rate (BOR) nationwide. In December, at the end of December last year, our rate was up to 68 percent. Then, in May, mid-May, the rate went down to 29 percent. Then, in mid-July, 18 July, the rate jumped to almost 80 percent due to the Delta variant, and even some hospitals’ rate reached up to 100 percent. Alhamdulillah, today our BOR has declined to 29 percent nationwide. We should be grateful for this.
I usually set the BOR at Wisma Atlet as a standard. In last year’s September, the rate rose up to 92 percent, and then it came down gradually until mid-May, on 18 May it was down to 15 percent. Yet, the rate was skyrocketing in the end of June 2021. Even on 30 June, it was up to 91 percent. If the rate had continued to go up until the next two weeks, Wisma Atlet would have collapsed.
Alhamdulillah, this morning I have checked the BOR was down to 12 percent. We should be grateful for this low rate, but still need to be alert and careful in determining every policy because COVID-19 is unpredictable and leads to uncertainty, Delta variant in particular.
All things that are related to COVID-19 have impacts on economy. With the decreasing number of cases, we hope that our economy will gradually flourish. We are aware that in the second quarter of this year, our economy grew by 7.07 percent, and inflation reached 1.5 percent. We expect this economy’s trend will continue in the third quarter although it may be lower than that in the second quarter.
We need to know when “to use the gas and brake pedals” to have a good balance. It means that we can slow down the spread of COVID-19 in stages, so our economy will recover and return to normal or even better.
In the future, I think the key strategy designed for our economy, I would like to mention three things on the key strategy for business in this country, namely the first one is downstream industry, the second one is digitalization of Micro, Small, and Medium Enterprises (MSMEs), and the third one is we have to start green economy.
We have started downstream industry by not exporting nickel ore anymore, and followingly everything should be in downstream industry, and the results started to show. I think our export value, our iron and steel export in the first semester of this year was valued at approximately USD10.5 billion. Therefore, not only nickel ore, in the future we will have bauxite, gold, and copper ores, and also palm in downstream industry. We can have them processed from raw material to at least semi-finished products, or even finished products.
The second one is related to digitalization of MSMEs. Today, we have adopted e-commerce technologies with collective hard effort. Our 15.5 million MSMEs have used digital platforms. I think we are going to encourage this transformation because we have approximately 60 million MSMEs and we will encourage them to use digital platforms, be it regional or national platforms, or even global platforms.
The third one is related to green economy. I think we are aware that the future of green products is very promising and we have big opportunity in this area. Therefore, maybe in October we will start to establish Green Industrial Park that will create green products and use green energy. In the future, we expect to have a high strength for green products resulted from green economy that will be established this year.
On structural reformation, we are aware that we already have Law on Job Creation in order to build up speed. We want to provide ease in issuing business permit and we have already launched Online Single Submission (OSS). So, maybe you could find out whether getting permit can be really fast or not at the moment.
At the moment, I think it does not take long for micro and small businesses to get Business Identification Number (NIB). It can be done at home or in the office, and it takes only five to seven minutes. Therefore, our small and micro businesses can have NIB that will enable them to get access to banking services.
I would also like to highlight our Mekaar Program that we have started in 2016. It is a program for micro businesses to get credits from only Rp500 thousand, Rp1 million, and up to Rp3 million. Initially in 2017, it had only 1.5 million customers, and currently, it has 10.8 million customers. It is a huge rise that will hopefully generate micro businesses in our country. Almost 100 percent of the customers are women, and the number of the customers exceeds that of Grameen Bank that has probably around 6 million customers, if I am not mistaken.
Amid the challenging situation, the Government needs support from all elements, especially the economists. Thoughts and ideas that are applicable and also based on research and evidence, practical examples and formulas are encouraged to be shared to recover our economic growth.
I believe that with supports from the economists who are willing to propose their great ideas and thoughts, and also be part of the solution, we will get through this challenging time and prepare ourselves well to accelerate after we can survive this crisis.
On this auspicious occasion, I conclude my remarks by saying bismillahirrahmanirrahim, today I declare the Brainstorming Meeting of 100 Indonesian Economists open.
Wassalamu’alaikum warahmatullahi wabarakatuh. (AW/LW)