Government to issue bonds to help business world withstand COVID-19

Government to issue bonds to help business world withstand COVID-19

Secretary of the Coordinating Ministry for Economic Affairs (ANTARA/AstridFaidlatulHabibah)

The government is mulling (over an option)  to issue new debentures or bonds to be called recovery bonds.
Jakarta (ANTARA) - The Indonesian government is planning to issue recovery bonds to help the business sector withstand the coronavirus disease (COVID-19) outbreak.

"The government is mulling (over an option) to issue new debentures or bonds to be called recovery bonds," Secretary of the Coordinating Ministry for Economic Affairs Susiwijono noted during a press conference at the National Disaster Mitigation Agency (BNPB) in Jakarta on Thursday.

He affirmed that the bonds will be issued to Bank Indonesia (BI) or private companies that still have liquidity funds.

Proceeds from the issuance of the bonds will be channeled to the business world through special loans offered at low interest, he stated.

"Entrepreneurs can obtain special credits to revive their businesses," he remarked.

To obtain special credits to maintain their cash flow, entrepreneurs must meet several criteria, including refraining from laying off their workers, he pointed out.

"If they insist on laying off their workers, they must retain 90 percent of their workforce without reducing their salaries," he explained.

He revealed that the government is drafting a regulation in lieu of the law to serve as a legal basis for the issuance of recovery bonds.

"The regulation will be changed since BI is only allowed to buy bonds in the secondary market," he stated.

The government is also mulling over an option to maintain the purchasing power of employees in the formal sector by providing them social assistance through the social security program (BP Jamsostek).

"We will increase the operating fund of BP Jamsostek to provide Rp1 million in social assistance along with Rp1 million of incentives for four months, so the total amount will reach Rp5 million for each worker," he remarked.

The government has also readied to distribute pre-employment cards to hone the skills and quality of workers.
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