News analysis

Pulling emergency brake may be too little, too late as economic crash looms

A medical worker in a protective suit at Patriot Candrabhaga Stadium, which is being prepared as a Covid-19 isolation facility in Bekasi, Indonesia, on Sept 10, 2020.PHOTO: REUTERS

Tough restrictions will be reimposed in Jakarta from Monday, a move analysts have said is necessary but may be too little, too late as the number of Covid-19 cases in the Indonesian capital surges to a record high, pushing the healthcare system to the brink.

Some 50,000 residents have been infected so far, and more than 1,300 have died. But these are only confirmed figures and reports speak of cemeteries running out of space.

The city's governor, Mr Anies Baswedan, has warned that not a single isolation room in a hospital will be available by Sept 17 if tough measures are not reimposed.

"Jakarta doesn't have any choice other than pulling the emergency brake as soon as possible," he said in a Facebook live-stream video on Wednesday when announcing the reinstatement of restrictive measures in the city of more than 10 million people. Entertainment venues will be shut, restaurants and cafes will offer only deliveries and takeaways, and staff in non-essential sectors will work from home.

The reimposition of restrictions in Jakarta - even if limited - will have major repercussions, given the city's status as the country's financial hub and an engine of economic growth. More businesses can be expected to go bust and people will lose their jobs.

A recession is inevitable, and the road to recovery will be long and hard, analysts told The Straits Times. Most agreed that the central government and the city administration must now ensure that social assistance reaches low-income groups.

"There is not much time before Sept 14. The poor and those vulnerable to poverty must first be amply supplied with basic necessities so they can survive," said economist Bhima Yudhistira Adhinegara from the Institute for Development of Economics and Finance.

Jakarta was the first city to impose voluntary large-scale social distancing measures - better known here by the local abbreviation PSBB - on April 10 after the first Covid-19 cases in the country were detected in the capital in March.

The measures were gradually eased from June 4 after the city appeared to have managed to flatten the curve for new cases. At the time, fatalities stood at 523, and no new deaths were reported.

Workplaces, places of worship, shopping centres and recreational venues were allowed to open, with limited capacity and safe distancing measures in place.

But, even then, Mr Anies warned about the possibility of reimposing restrictions should there be a spike in cases.

Then came the much-feared resurgence of infections, which have grown rapidly recently.

One major reason (for the resurgence of infections) was the public's cavalier attitude towards the coronavirus... Many ignored the rules on mask wearing and social distancing. Crowds flocked to malls, markets, parks and tourist spots. The lack of manpower and the huge population also contributed to the surge.

One major reason was the public's cavalier attitude towards the coronavirus which causes Covid-19. Many ignored the rules on mask wearing and social distancing. Crowds flocked to malls, markets, parks and tourist spots.

The lack of manpower and the huge population also contributed to the surge. They made the job of nabbing those who flout the rules and fining them a challenging one. Police and soldiers, who were mobilised to enforce the rules, could be deployed only at strategic locations.

Finally, regulatory flip-flops on social curbs, work and travel did not help matters. "The easing of restrictions proved to be unsuccessful and catastrophic for both health and economic recovery," said Mr Bhima.

Analysts said part of the blame also lies with President Joko Widodo and his government, which has been widely criticised for apparently being more concerned about the economy than people's health and safety.

Last week, Mr Erick Thohir, executive director of the government's Response and Economic Recovery Committee, offered an apology of sorts.

"We, the government, have tried our best and worked hard with all of our shortcomings, and we apologise if it is not perfect," he said while pleading for more cooperation from the public.

Mr Joko has also admonished his ministers for the "lack of sense of crisis" and urged regional administrations to hasten budget allocations to bolster health and business sectors.

"It's too little, too late, but late is better than never," said Dr Firman Noor, head of the Indonesian Institute of Sciences' political research centre.

Mr Josua Pardede, an economist with Bank Permata, expects the latest round of restrictions to be in effect for at least a month to allow for the reduction in cases.

"One lesson we have learnt is that premature easing of restrictions was not doing us any favour," he said. The government should ensure discipline in the community, he added.

A version of this article appeared in the print edition of The Straits Times on September 11, 2020, with the headline 'Pulling emergency brake may be too little, too late as economic crash looms'. Print Edition | Subscribe