Sunday, September 24, 2023

Most Businesses in Indonesia Can Only Survive Until June Under Coronavirus Restrictions

Lona Olavia
May 11, 2020 | 5:04 pm
A cook in Cafe Selasar in Ciputat, Banten, prepares meals for donation last month. (Antara Photo/Muhammad Iqbal)
A cook in Cafe Selasar in Ciputat, Banten, prepares meals for donation last month. (Antara Photo/Muhammad Iqbal)

Jakarta. Most businesses in Indonesia only have enough cash to continue operating until the end of next month with little to no sales under large-scale social restrictions or PSBB, a top business lobby said on Monday. 

Sutrisno Iwantono, the deputy chairman of public policy at the Indonesian Employers' Association (Apindo), said the government needs to impose stricter lockdowns to stop Covid-19 from spreading, which will allow it to also end PSBB sooner. 

"President Joko Widodo said the pandemic might end in May, but that seems unlikely now," Sutrisno said. 

"The pandemic is going to go on for a while longer. We're still not testing enough people. This will complicate efforts to prevent the spread of the virus," Sutrisno said. 


Sutrisno said on average most Apindo members have just enough cash to continue operating until June. Large companies with good liquidity can last 3–4 months longer, he said. 

Indonesia's economy expanded only 2.97 percent in the first quarter, its lowest in almost two decades.

Household consumption, which accounts for more than half of the economy, grew at a slower 2.8 percent in the quarter, compared to 4.97 percent in the last quarter last year.

Bank Indonesia, the country's central bank, said the largest economy in Southeast Asia may stagnate in the second quarter before rebounding in the third and fourth. 

The capital Jakarta, where 17 percent of Indonesia's economic activities take place, has already extended its PSBB for the second time.

The last one will last until May 22.

Several other regions in the country have also imposed the PSBB. 

Sutrisno said businesses in the tourism, retail and transportation sectors, especially micro- and medium-sized ones, have been most affected by the coronavirus crisis.  

"Those sectors rely on traffic of people. Right behind them is the manufacturing sector, especially factories with a large number of workers," he said.

Last week, several manufacturing plants across Indonesia's most populated island Java had to cease or scale down their operations after some of their workers tested positive for Covid-19.

In Surabaya, more than 500 workers in tobacco giant Philip Morris' factory were forced to go into government-sanctioned self-isolation after two of their colleagues died from the disease.  

Sutrisno hoped the government would consider implementing a zoning system after the current PSBB period ends to allow some businesses to reopen. 

"When [businesses should reopen] will depend on their location. Businesses in the green zones can reopen immediately. Those in the red zones will have to wait," Sutrisno said.

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