Jakarta. President Joko "Jokowi" Widodo has told Finance Minister Sri Mulyani Indrawati to divert Rp 40 trillion, or around $2.7 billion, from non-urgent government budget to increase spending in programs that could provide direct support to household consumption or increase people's purchasing power during the Covid-19 outbreak.

A demand and supply shock in Indonesia is becoming a growing possibility as the Covid-19 pandemic continues to spread in the country and its main trading partners, threatening the livelihood of many vulnerable groups, such as low-income farmers, fishermen, workers, laborers and small business entrepreneurs, Jokowi said on Monday. 

"We're in an unusual situation, a very particular situation [where we're facing both] economic slowdown and the Covid-19 pandemic," the president said.

Jokowi said government travel, meeting and conference budgets need to be suspended for now.

"Ministers must have the courage to withhold budgets from existing programs so they can be redirected to help the people," he said.

The president has told Finance Minister Sri to disburse a second round of the government's Family Hope Program (PKH), a monthly cash transfer for low-income families.

"It's important to strengthen people's purchasing power and consumption. We hope our economic growth won't suffer too much," Jokowi said. 

The president also ensured that another government program – a pre-employment card that jobseekers can use to get a cash transfer and training – would still begin this month as planned. 

"We should finish setting up the program soon. We should be able to start distributing the [pre-employment] card this week. This program costs around Rp 10-12 trillion, not a small amount of money," Jokowi said. 

Jokowi has also ordered the Villages, Development of Disadvantaged Regions and Transmigration Minister Abdul Halim and Home Affairs Minister Tito Karnavian to convince regional and village heads to redirect the village fund – a Rp 1 billion direct transfer program for villages set aside for discretionary spending – to cash-for-work activities. 

"That way village communities can benefit directly from the Rp 72 trillion fund. It should not be used for programs that will not increase household consumption or people's purchasing power," Jokowi said.