Workers assemble Polygon bicycles at bike maker Insera Sena's manufacturing plant in Sidoarjo, East Java on Monday. (Antara Photo/Umarul Faruq)

Free Cash: Indonesia to Transfer $82 to the Accounts of 13.8m Workers Every Other Month


AUGUST 06, 2020

Jakarta. The government would transfer a fixed amount of money to the bank accounts of 13.8 million workers every month for the next four months in an attempt to boost consumer demands and reinvigorate the economy, top officials said. 

The workers, who earn a monthly income of less than Rp 5 million ($345), would receive Rp 600,000 per month from the government over four months, said Erick Thohir, the chief executive of Covid-19 Handling and National Economic Recovery Committee, said on Thursday. 


"This stimulus program is being finalized so that it can be implemented by the Ministry of Manpower in September 2020," Erick said in a statement. 

Erick, who was also the minister of state-owned enterprises, said the stimulus comes with a catch as it requires the workers to have an active membership at Indonesia's social security program for workers, BPJS Ketenagakerjaan.

"The focus of government assistance this time are the 13.8 million workers at private companies or state-owned enterprises, who are registered with BPJS Ketenagakerjaan and actively paying their premiums of Rp 150,000 per month or less," Erick said. 

"The aid of Rp. 600,000 per month for four months will be transferred every two months to the bank account of each worker to prevent abuse," he said. 

Finance Minister Sri Mulyani Indrawati said earlier on Wednesday that the government may need to set aside Rp 31.2 trillion for the direct cash transfer. 

Indonesia's economy shrank by 5.3 percent in the second quarter from the same quarter last year, as the restrictions to curb the spread of the Covid-19 pandemic has ground the country's economic activities to a halt. In the first quarter, Indonesia still expanded by 2.9 percent.

Household spending, which accounts for 58 percent of Indonesia's economy, contracted by 5.5 percent in the second quarter, as opposed to a 2.8 percent expansion a quarter earlier. 

Eric said the government was now focusing on how to disburse the stimulus. 

"The economic recovery programs implemented by the government are quite numerous and support each other, such as cash social assistance, non-cash food assistance, family hope programs, and credit distribution in the MSME sector," Eric said. 

"But, they take time, accurate data, and coordination with many parties to realize this assistance on time," he said.