Finance Minister Sri Mulyani Indrawati, center, Bank Indonesia Governor Perry Warjiyo, left, and Heru Kristiyana, the Financial Services Authority's deputy chairman for bank supervision, attend a meeting with lawmakers at the House of Representatives on Monday. (B1 Photo/Ruht Semiono)

Gov't Starts $4.5b Cash Transfers for Workers, Small Business Owners Ahead of Schedule


AUGUST 24, 2020

Jakarta. The Finance Ministry has begun to transfer Rp 66.5 trillion, or $4.5 billion of cash to 15.7 million workers and 12 million small business owners on Monday, marking a rare occasion in which the administration was moving ahead of schedule in spending the government's economic stimulus package. 

"The Manpower Ministry had issued a ministerial decree and [the budget implementation list] so starting today, Aug 24, the first stage of the transfer can be disbursed," Finance Minister Sri Mulyani Indrawati told the House of Representatives on Monday.

The government first announced the cash transfer plan on Aug 6 aimed directly to prop up customers' spending, just days after President Joko "Jokowi" Widodo chastised his aides for being sluggish in disbursing the country's $47 billion stimulus programs. 

Erick Thohir, the chief executive of Covid-19 Handling and National Economic Recovery Committee, said at that time that the government expected to roll out the program in September. 


Under the program, the government would wire Rp 1.2 million ($81) to 13.8 million workers, who earned less than Rp 5 million a month, directly into their bank account every other month. The government later increased the number of beneficiaries to 15.7 million to include temporary teachers. 

Sri Mulyani said as long as the workers have an active membership at Indonesia's social security program for workers, BPJS Ketenagakerjaan — or being registered with Education Ministry for the temporary teachers — they could expect to receive the cash soon. 

The minister said the government had earmarked Rp 37.7 trillion for the program, up from an initial Rp 33.1 trillion budget. 

The government bank on the cash transfer program to boost household consumption in the third quarter this year and avoid recession after Indonesia's economy shrank 5.3 percent in the second quarter amid the Covid-19 pandemic.  

Finance Ministry revised down its estimation about Indonesia's economic growth to between -1.1 and 0.2 percent this year. The $1-trillion economy used to expand by more than 5 percent annually. 

Small Business Grants

Separately, President Jokowi launched on Monday a grant program for 12 million micro and small business owners across Indonesia. The government earmarked Rp 28.8 trillion for the program. 

Under the program, dubbed as the Presidential Grant, the business owners would get one-off payment Rp 2.4 million from the government with no string attached. 

"This is not a loan, but a grant," Jokowi told hundred of business owners logging in to a virtual meeting on Monday. "Do not use it for things that are not useful, but use it for productive activities," he said. 

Jokowi said a million business owners would receive the fund by tomorrow, while 11 million others should expect to receive the funds in stages by the end of September.