Economic recovery not entirely reliant on fiscal, monetary policies

Economic recovery not entirely reliant on fiscal, monetary policies

A screenshot of Finance Minister Sri Mulyani Indrawati at the CNBC Debate on Global Economy held virtually on Friday (Oct 16, 2020). ANTARA/Dewa Wiguna/sh

Jakarta (ANTARA) - Indonesia's economic recovery from the COVID-19 pandemic would not solely rely on fiscal and monetary policies but also other instruments, including the omnibus law on job creation, according to Finance Minister Sri Mulyani Indrawati.

"In this time of crisis, the president and House of Representatives have approved the Omnibus Law that will facilitate investment climate improvement in Indonesia to create jobs," Indrawati stated here during the CNBC Debate on Global Economy held virtually on early Friday.

The minister highlighted that the omnibus law on job creation will ease the government's transition from fiscal deficit and monetary policy, as instruments for economic recovery, to structural transformation.

Indrawati also stressed on the need for the international community’s support to bring about economic recovery, particularly in poor nations, to help them survive the crisis and recover.

"For us, continued support from the international community is not only for (economic) recovery, but it is also critical for access to the (COVID-19) vaccine," she noted.

Another area that elicits attention is restoration of trade and capital inflow, especially foreign direct investment (FDI), deemed more valuable than short-term capital, in order to recover from the impact of the pandemic.

Indrawati noted that the economic recovery program is designed with the objective of providing most of the social safety net and small, medium, and enterprises’ support to benefit women.

"Do not forget that (the impact of) COVID-19 was felt mostly by women. Several medical workers are females," she emphasized.

The economic recovery design should also incorporate climate change to lower carbon emissions through fiscal stimulus or incentives.

"(The design) will create more renewable and green projects. This is one aspect that Indonesia has done. We are using this crisis to usher in economic transformation. I am optimistic that other countries would also begin to sense that," she affirmed.

Panelists at the discussion, moderated by CNBC anchor Geoff Cutmore, comprised IMF Managing Director Kristalina Georgieva, President of the European Central Bank Christine Lagarde, Indonesia's Finance Minister Sri Mulyani Indrawati, and Board Chair at GAVI/AU Special Envoy on response to COVID-19 Ngozi Okonjo-Iweala.
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