Jakarta (ANTARA) - President Joko Widodo (Jokowi) has urged that the distribution of all direct cash social assistance to the public be accelerated to increase purchasing power in the third quarter of 2020.
During a limited meeting held via video teleconferencing at the Merdeka Palace in Jakarta on Monday, the President said that the end of September, 2020 is nearing, which will also mark the end of the third quarter of 2020, so all stimulus to drive public consumption and purchasing power must be channeled to build momentum for economic recovery.
"We still have time until the end of September, 2020 to increase our leverage, increase people's purchasing power, increase household consumption in the third quarter, so I ask all cash transfer incentive programs to be accelerated," the President said.
The third quarter of 2020 must serve as a momentum for economic recovery as well as an opportunity for Indonesia to avoid an economic recession, he added.
In the second quarter of 2020, Indonesia's economy had contracted to minus 5.32 percent. If the country experiences negative economic growth again in the third quarter of 2020, it will enter a recession.
Several types of social assistance has been provided by the government during the six months of the COVID-19 pandemic, including basic food assistance, cash social assistance, and Village Fund Direct Cash Assistance, under which a portion of the budget was transferred to beneficiary families (KPM).
The government has also provided discounted tariffs to free electricity, subsidies through pre-employment cards, salary subsidies for workers earning less than Rp5 million, and Productive Presidential Assistance (Banpres) of Rp2.4 million for micro and small businesses.
President Widodo has also launched monthly wage subsidy assistance of Rp600 thousand, which is meant to be disbursed for a four-month period, for 15.7 million workers drawing a monthly salary of less than Rp5 million.
While launching the cash assistance-based incentive at the State Palace in Jakarta on Thursday, President Jokowi revealed that the salary subsidy will initially be distributed to 2.5 million workers and thereafter, dispensed gradually to another 15.7 million formal workers. The aid will be distributed stage-wise until the end of September, 2020.
Under the first stage, salary subsidies were to be distributed via bank transfer every two months, for a period of four months. Thus, in the first stage, salary subsidy assistance of Rp1.2 million has been distributed, while the rest will be disbursed over the next two months.
“Today, I think workers, who receive wage subsidy assistance, include honorary teachers, honorary firefighters, honorary hotel employees, and nurse medical personnel, what else? There are cleaners, hotel employees, and others. Those actively paying the Workers Social Security Agency (BPJS Ketenagakerjaan) fees will be offered wage subsidy assistance," President Jokowi informed.
The launch of the scheme was also attended by Coordinating Minister for Economic Affairs, Airlangga Hartarto, State-Owned Enterprises Minister Erick Thohir, and Minister of Manpower, Ida Fauziyah.
One of the criteria for workers to receive subsidized wages is they need to be active participants of BPJS Ketenagakerjaan and diligent about making contributions.
President Jokowi said he is optimistic that the salary subsidy assistance would encourage public consumption.
"We are upbeat that, once again, household consumption will not be disturbed, and the people's purchasing power will increase. We are optimistic that our country's economic growth will return to normal," President Jokowi stated.
The head of state remarked that the salary subsidy is part of a series of aids that the government is providing to the public to reduce the social and economic burden caused by the COVID-19 pandemic. (INE)
EDITED BY INE
