FRIDAY

2 JULY 23-29, 2021

How the Emergency PPKM

on the supply and demand side of the
Bali’s economy, potentially posing a
threat of recession due to depressed
demand for goods and services

adds to the economy’s woes

brought about by limited liquidity in
the market. On the supply side, it is
certain that the distribution of goods
will be hampered, as a result of dis-
ruption in production and sales re-
sulting from the restrictions in place
and their enforcement that come
with heavy penalties.
By Trubus Rahadiansyah Second, in the medium and long
term, even if the Emergency PPKM
What are the adverse impacts of is successful in inhibiting the latest
Emergency Public Activity Restric- outbreak and a safer, more condu-
tions (PPKM) on the economy? Here cive business climate emerges from
are some obvious ones: the ashes, and economic growth can
be maintained, it will still take longer
1. Downward revision of projected for Bali to recover, due to its outsized
GDP growth dependence on tourism, compared to
The Emergency PPKM enacted to other regions in Indonesia. Thus, as
control runaway infections caused a prerequisite for the tourism sector
mainly by the outbreak of the more to safely reopen, the Covid-19 han-
contagious Delta variant is certainly dling must be conducted efficiently
going to exert a profound impact on and effectively through, among oth-
this year’s economic trajectory. In fact, ers, Emergency PPKM with all its di-
Bank Indonesia (BI) has lowered its lemmatic consequences for ordinary
projection for Indonesia’s 2021 GDP people and small-time businesses, as
growth to 3.8%, from an earlier 4.1%- well as challenges in terms of govern-
5.1%. ment bureaucracy, budget ‘leakage’,
The policy has significantly im- inefficiency and misdirection of gov-
paired people’s mobility and dent- ernment’s aid to ineligible recipients
ed household consumption, with a – tendencies that can potentially re-
knock-on effect on the overall econ- sult in chaos in society.
omy. BI has voiced its concerns over Third, the increased budget for
the sharp decline in household con- the Emergency PPKM is necessary,
sumption resulting from tepid de- as long as its management and dis-
mand so far. tribution can be carried out in a
While the inflation rate is likely transparent, accountable, responsi-
to be as low as 3% this year as a re- ble and accurately-targeted manner,
sult, BI will focus its attention more to support businesses and economic
on stimulating the demand side and sectors struggling as a result of the
promote economic growth rather than pandemic. This is vital to foster the
controlling inflation. resilience of the national economy
The economy in the first and sec- and businesses – at least to survive

RAYI GIGIH/IO
ond quarter has been driven by an for now until they can thrive in the
export rebound, massive govern- aftermath of the pandemic.
ment spending and investment in the Can Bali’s economy recover? It is
non-property sector. In line with BI, ty-based tourism, as the government others, coordinating with the Trade hard to say at the moment, as the
the Finance Ministry also estimated has been earnestly promoting. They Ministry to improve the quality and Bali’s economy is heavily reliant on
that full-year economic growth for should also take advantage of tech- onboarding opportunity for creative a tourism industry which has seen
2021 is likely to hover in a range of nology to stay productive during the economy actors. We can see this the deepest contraction during the
3.7-4.5%. term of enhanced social distancing from the vigorous campaigns such as pandemic, but also because prior
Economic growth for the third and measures. ‘Proud of Indonesian-made Products’ to the pandemic (in early 2018) that
fourth quarter is expected to remain Minister Sandiaga encouraged and ‘Buy Local’, supported by influ- proposal that Bali should be given
positive, although it will certain- tourism and creative economy actors ential platforms such as GoJek, Grab, special authority by the central gov-
ly depend on the Emergency PPKM to see the crisis as an opportunity, as Shopee, and so on. ernment to manage its own tourism
scheme. In a moderate scenario, the the Emergency PPKM time frame can In addition, the government has industry was not granted, despite the
Q3 economy could grow by 4.6%. be used to improve skills and adapt sought to conclude innovation, ad- island contributing the largest foreign
However, in a worst-case scenario, business through digitalization. aptation, and collaboration partner- exchange (60%) to national tourism
if the Emergency PPKM is extended Technology, he said, can be used ships with other relevant stakeholders revenue.
until August, the figure might slide to to promote and sell creative econo- to assist creative economy, as well as Fourth, during the peak of the
4%. Likewise, an optimistic projection my products online. Thus, business tourism actors, in coping with the U.S.-China trade war in late 2018,
for Q4 is around 5.9%, and 4.6% in players in this sector must master Emergency PPKM. Bali was cautioned that it must re-
RAYI GIGIH/IO

a pessimistic scenario. The economy, technology, and the skills needed to structure its economy to not just fo-
which performed robustly in April and create attractive content to attract 3. Bali’s deepening woes cus on the development of the south-
May, gave the government reason to consumers’ attention. He pointed Bali has been known as the heart ern part of the island, which had
be optimistic that Q2 economy might ly up and are thus forced to sell off Java and Bali, but also other favorite out that today creative marketing is and icon of Indonesian tourism. The started to create a property bubble,
well hit 7.1%-7.5%. their assets to pay mounting debts. destinations such as West Sumatra often what the customers appreciate island’s contribution to state revenue a ticking bomb that can shake the
The Emergency PPKM has put a During the Emergency PPKM, and West Nusa Tenggara. In this lim- more, in addition to the quality of the and national economic growth has foundation of its economy. Its prob-
stranglehold on people’s activities and traditional markets are only allowed itation persists, it is estimated that product itself. been crucial. The Emergency PPKM lems were worsened by the Covid-19
mobility, especially in the real econ- to stay open until 1 p.m. and only only 5% of businesses in this sector Indonesia is the largest e-com- affecting Java and Bali has had a outbreak in the first quarter of 2020
omy. Consequently, this has dealt a foods and medicine retailers are al- will be able to survive. The remaining merce market in Southeast Asia, so devastating impact on its local econ- and the island was caught unpre-
major blow to many economic sectors, lowed to open their stalls. Sellers of 95% have either shut permanently, the opportunity to dominate the do- omy. This can be seen from several pared in terms of emergency liquidi-
including: toys, accessories and clothes must closed temporarily, laid off their em- mestic e-commerce market is wide indicators: ty assistance for businesses facing a
a. Closure of shopping centers temporarily shut down, leaving them ployees or only retained a small num- open. Thus, the Tourism and Cre- First, in the short term, the eco- double whammy. This has made Bali
As markets and shopping centers with no income to scrape by. ber of essential workers. Their only ative Economy Ministry has been nomic slowdown at the national and worse off than any other province in
were ordered to close or limit their op- c. Tough times for hotel and hope is for the government to play an promoting digital literacy by, among regional level will put more pressure Indonesia.
erational hours, the retail sector has restaurants active role in creating demand when Compounded by the lack of se-
been seriously impacted. Hotels and restaurants are among the crisis subsides. riousness on the part of the central
A viral image of a number of cell
phone sellers and repairers – who
the sectors worst-hit by the imple-
mentation of the Emergency PPKM.
Many players in this sector have
asked the government to disburse as- How tourism and creative government in providing real assis-
tance (including stimulus to Bali’s
used to own a business inside the Cil- Theirs have been among the loudest sistance as soon as possible to help economy actors can survive business community and the border

the Emergency PPKM

ilitan Wholesale Centre (PGC) – now voices pleading with the government them survive the pandemic. In Bali, reopening promise in early July that
forced to hawk their wares and ser- to review the policy extension. where almost half of its residents de- never materialized). The Emergency
vice on the street in front of the trade While restaurants have fared a pend on the tourism sector, hotels PPKM is only the latest blow that
centre, East Jakarta clearly illustrates
the hardship faced by small-time eco-
little better, profiting from online de-
livery, this sector is nevertheless fac-
have been severely battered by low
tourist arrivals. The government has
1.Apply for Government adds to the Island of the Gods’ long-
list of woes with no end in sight.
nomic actors due to the temporary ing extremely tough conditions. As been put in a dilemmatic position. On Incentive Assistance (BIP)
closure of many business establish- for hotels, occupancy rate has been one hand, it has promised to imme-
ments. One PGC retailer revealed that in freefall, many to just under 10%. diately jumpstart the tourism sector. 2.Transition to digital marketing
he still has to pay an annual rent of They barely survive. If the Emergen- But on the other hand, anti-Covid
Rp11 million for two kiosks and utility cy PPKM is further extended, most measures, such as the strict Emer- 3.Create new, more cutting-edge
fee of Rp4.8 million even though the of them will certainly fold because gency PPKM, is said to be needed to products
mall is closed. they can no longer afford their steep stem multiplying infections and make
Due to Emergency PPKM, many operational costs. the tourism sector safer. 4.Run more attractive marketing
malls or shopping centres are in an d. Foods vendors’ income dry- Tourism and Creative Economy
even worse condition. A number ad- ing up Minister Sandiaga Uno did acknowl- 5.Join the ‘Proud of Local Products’
mitted that they are running low on
reserve funds, depleted by the pre-
Street foods vendors have vocifer-
ously expressed their objection to the
edge the suffering of this sector and
has voiced his concerns many times.
and ‘Buy Local’ campaign
vious rounds of restrictions taking extension of Emergency PPKM be- He has urged business players to
place since 2020 and are now merely cause their burden is getting heavier apply for tourism grants, for which Trubus Rahadiansyah is a public
surviving. by the day. They have pleaded with Rp3.7 trillion has been allocated policy expert. He is member of
Revenues in shopping centers have the government to relax the scheme in the National Economic Recovery the Executive Board of the Associ-
plummeted. Operators even have to by allowing them to operate in the (PEN) program. He also recommend- ation of Indonesian Policy Analysts
(AAKI), Head of the Constitution
help their tenants stay afloat by re- afternoons and evenings. ed the qualifications for beneficiaries
and Laws Research Center of Tri-
ducing or relaxing rent payments and to be expanded. sakti University, Jakarta, and Asso-
service charges, because the majority 2. Collapse of the travel and Other than digitization of the tour- ciate Professor at the university’s
of their tenants are simply unable to tourism sector ism sector, his ministry has also pre- Law Faculty. He lectures at the
operate during the Emergency PPKM. The travel and tourism industry pared a number of Emergency PPKM Indonesian National Police Crime
However, they are still required to and its ecosystem are reeling under mitigation measures, one being the Division Education and Training
meet their obligations to the govern- the Covid-19 pandemic. With the im- provision of incentives to increase Center, and serves as its cyber-law
consultant. He completed his un-
ment, by paying various taxes or oth- plementation of Emergency PPKM, the capacity of the tourism ecosys-
dergraduate degree at Gadjah
er obligations, even though they have their woes have been compounded. tem and the creative economy on a Mada University, Yogyakarta. In
practically no business, due to clo- The Emergency PPKM policy, im- targeted, practical and timely manner. 2012 obtained his PhD in public
sures or operational hours restriction. posed since July 3 and now extended Minister Sandiaga also hopes that policy from the University of Indo-
b. Bankruptcy of traditional mar- until July 25, practically reduces the tourism and creative economy actors nesia and Doctorate in Law from
ket vendors number of tourists to a trickle. The not give up during the Emergency tourism and Trisakti University. His work has
The impact of Emergency PPKM sector has been in the doldrums for PPKM. He urged them to make use creative economy been published and cited nation-
is also felt among traditional market one and a half years now. of the current situation to build a actors ally and internationally.
vendors. Many of these have gone bel- This affects not only tourism in foundation for sustainable and quali-