WB suggests four policies to facilitate Indonesia's crisis recovery

WB suggests four policies to facilitate Indonesia's crisis recovery

Screenshot of the Head of the World Bank Representative for Indonesia and Timor Leste Satu Kahkonen at the Indonesia Economic Prospects event in Jakarta in Thursday (6/17/2021). (ANTARA/AstridFaidlatulHabibah)

Jakarta (ANTARA) - The World Bank, through the Indonesia Economic Prospects (IEP) report titled "Boosting The Recovery," has put forward four policies to boost recovery to enable Indonesia to recover from the impact of the COVID-19 pandemic crisis.

"We will discuss priority policies," World Bank Country Director for Indonesia and Timor Leste Satu Kahkonen stated here on Thursday.

Kahkonen pointed out that in the past year, the pandemic had caused nearly all countries worldwide to experience a recession of up to three percent, including Indonesia, although its percentage was at a smaller level.

According to Kahkonen, Indonesia experienced lesser recession than other countries in the world, but millions of people became jobless, and incomes also dripped, thereby resulting in some three million people have fallen into poverty.

Nevertheless, the Indonesian government’s policy response managed to avert a worse economic and social downturn.

However, Kahkonen believes the government still requires to put in place other policies to drive faster recovery.

Hence, the World Bank recommends several policies to accelerate recovery, comprising the government's hard work in fighting the spread of COVID-19, so as to end the health and economic crisis.

Such efforts can be undertaken by accelerating the vaccination program, ensuring sufficient capacity for testing and tracing, as well as stepping up efforts to limit community mobility.

The next recommendation is to maintain the monetary policy and stimulate credit to continue to grow by managing external financial processes.

"Several programs that provide support, such as subsidies and interest rates, can also be implemented to continue to increase credit," she explained.

The third recommendation aims to provide short-term fiscal support while maintaining medium-term fiscal sustainability.

Kahkonen expounded that the medium-term fiscal strategy will offer fiscal space and boost investor confidence.

"We also need to continue to support poor and vulnerable households and small firms, so that the recovery could run well," she emphasized.

The final recommendation is to increase productive employment opportunities for both genders.

"The pandemic poses a challenge to Indonesia's job opportunities. However, in the midst of a crisis, we have the opportunity to reform and become even better," she remarked. Related news: WB approves US$400-million to facilitate Indonesia's financial reform
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