Wednesday, 20 Jan 2021

Indonesia president Jokowi calls to 'reboot' economy amid coronavirus pandemic

JAKARTA (REUTERS, BLOOMBERG) – Indonesia must use the coronavirus pandemic to reboot South-east Asia’s biggest economy, including by improving food and energy security, as well as processing more natural resources at home, President Joko Widodo said on Friday (Aug 14).

Likening the current economic situation to “a computer crash” causing stagnation, Mr Joko, popularly known as Jokowi, said in his State of Union address in Parliament that Indonesia, along with other countries, must “shutdown, restart and reboot”. 

“We must not let the crisis bring about setbacks. In fact, we must capitalise on the crisis as a momentum to make a big leap,” said Mr Joko who was wearing a traditional outfit from the Sabu people in the eastern part of the archipelago.

“And 25 years from now, at the centenary of the Republic of Indonesia, we must achieve great progress and make Indonesia a developed country.”

Due to coronavirus precautions, less than half of the lawmakers were present for Mr Joko’s address, with the rest watching online.

Indonesia has struggled to contain a surge in infections that followed the easing of social distancing rules since the end of May with the death toll nearing 6,000, the highest among South-east Asian nations.

The virus has also infected more than 130,000 people, with the confirmed cases more than doubling since the end of June, official data show.

Mr Joko’s administration has set aside about US$50 billion (S$68.66 billion) in fiscal stimulus to counter the impact of the pandemic after temporarily scrapping a fiscal deficit limit and getting the central bank to directly finance government spending.

Indonesia’s economy shrank 5.32 per cent year-on-year in the second quarter, its first contraction in more than two decades, as movement restrictions to contain the coronavirus outbreak decimated business.

The government expects the economy to post near flat growth this year due to the pandemic.

Under energy reforms, Mr Joko highlighted plans to slash expensive oil imports by using fuel made from palm oil. 

Indonesia’s Pertamina produced a first batch of biodiesel made fully from palm oil last month and is set to produce 1,000 barrels of the fuel at its Dumai refinery. 

The so-called D100 would absorb a minimum of one million tonnes of farmer-produced palm for 20,000 barrels of production capacity per day, Mr Joko said, without giving a timeline. 

Indonesia currently has a mandatory use of biodiesel with 30 per cent palm oil content. 

The president also stressed a need to push forward the downstream processing of raw materials including converting coal into gas and nickel ore into ferro nickel and stainless steel, as part of government efforts to create jobs.

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