Indonesia Forms Panel to Revive Virus-Hit Economy as Cases Jump

Indonesian President Joko Widodo will chair a new task force to lead efforts to contain the biggest outbreak of coronavirus in Southeast Asia and monitor spending of $47 billion in fiscal stimulus to revive the nations economy.

The panel will integrate various existing programs to mitigate the pandemic and ensure good governance in allocating 695.2 trillion rupiah ($47 billion) of recovery funds, the State-Owned Enterprises Ministry said in a statement Monday. Coordinating Minister for Economic Affairs Airlangga Hartarto will head the panel‘s policy committee, with State-Owned Enterprises Minister Erick Thohir overseeing the task force’s daily operations.

Thohir is picked to coordinate economic recovery efforts as his ministry drives one-third of Indonesias economy, with a multitude of state companies dominating sectors from public services to healthcare and distribution of goods, the ministry said. The task force will also coordinate various ministries virus-related efforts, it said.

Virus Shock

Nomura forecasts Indonesias economy to contract 3.2% in 2020

Badan Pusat Statistik Indonesia, Nomura Holdings Inc.

New cases have surged in recent weeks across Indonesia after social-distancing rules were eased to prevent Southeast Asias largest economy from slipping into recession. The pandemic has battered the economy, spurring policy makers into action with more government spending, interest rate cuts and loan moratoriums and interest-rate waivers.

Jokowi, as the president is commonly known, has said the pandemic is having a bigger impact on Indonesia than the Asian financial crisis in the late 1990s. The outbreak has clouded the timeline for resuming normal economic activity and weighed on household consumption, which makes up almost 60% of Indonesias economy.

“Many countries have seen success in repressing the virus and reviving their economies. Seeing that, we know that it is possible and can be replicated,” Thohir said in the statement. “But there are others that see recession. They also suffice as examples as to what we must avoid.”