COVID-19 SPECIAL

Indonesia to assess easing of curbs

Study on which cities should lift restrictions amid fiscal squeeze, which sectors to reopen first

Indonesian police yesterday conducting an operation against clothes vendors in a market area who were defying a partial lockdown in Jakarta. PHOTO: AGENCE FRANCE-PRESSE
Indonesian police yesterday conducting an operation against clothes vendors in a market area who were defying a partial lockdown in Jakarta. PHOTO: AGENCE FRANCE-PRESSE

Indonesia has set up a team to gauge which cities should ease restrictions amid growing financing pressures that are affecting many of them, after the coronavirus outbreak caused their tax revenues to plunge to a level that could jeopardise day-to-day governing activities.

The team, part of Indonesia's Covid-19 task force, will also study which sectors should reopen first.

The national government has previously prepared plans to let tourists start heading to a few main destinations - Bali, Yogyakarta and North Sulawesi - when conditions improve.

These three provinces have recorded relatively lower infection rates than most others.

Four provinces and 26 cities that had higher-than-average infection rates have large-scale social distancing measures equivalent to a semi-lockdown.

The tourism sector in Indonesia provides millions of jobs in wide-ranging industries. The country saw 16 million foreign arrivals last year.

The timing on when the restrictions could be eased would depend on later evaluations, head of the task force Doni Monardo said, stressing that the possibility of having to continue to live with the coronavirus should not be ruled out.

President Joko Widodo has separately discussed strategies to deal with the challenge of having to start a new normal with the deadly virus.

"As directed by the President, we won't ease restrictions in the coming week or two. We did discuss plans, scenarios whose realisation would be dependent on data and information from the ground," said Lieutenant-General Doni.

Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan expects conditions to improve in the coming weeks.

"No one could give exact predictions, but from the data that we currently have, our preliminary calculations show that the trend would improve (in a matter of weeks)," Mr Luhut told The Straits Times last Thursday.

"We have geared up for when it happens, to welcome people who may then be able to go to Bali," he added, describing the conditions in Bali and two other destinations, Yogyakarta and North Sulawesi, as better.

Indonesia's stance towards easing restrictions is in line with other countries in South-east Asia that are lifting lockdowns in a gradual manner amid the coronavirus outbreak.

For Indonesia, there is a push factor to promptly start a new normal and ease restrictions as some of its cities have witnessed tax revenue dropping by as much as 90 per cent.

The world's fourth-most populous nation started a decentralisation drive at the turn of the century, reducing Jakarta's control over the regions that since then could start levying their own respective taxes and issue regulations.

A senior government official in Jakarta told ST that many regional governments at the provincial, city and regency level are facing challenges in funding their budgetary plans.

Jakarta's municipal government has slashed staff salaries by half for this month and is withholding annual bonuses, according to two municipal officials contacted by ST.

"Jakarta is among those facing fiscal problems. Our annual budget must be massively adjusted," a senior city official said.

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A version of this article appeared in the print edition of The Straits Times on May 21, 2020, with the headline Indonesia to assess easing of curbs. Subscribe