In Indonesia, State-Owned Enterprises (SOEs) Minister Erick Thohir recently stated that the government’s wage subsidy program may be extended into 2021 as the nation works towards boosting the purchasing power of the Indonesian people and stimulating consumer demand.

“We are hoping that the program turns out to be effective, we can continue it next year. But the decision now is that the program will run until December,” he told reporters.

The minister added that the government will also transfer cash aid for millions of stricken workers in September-October, as well as in November-December; as a response to the damage caused by COVID-19.

Approximately 15.7 million workers in Indonesia that are currently earning less than Rp5 million (US$339.6) and who are registered with the Workers Social Security Agency (BPJS Ketenagakerjaan) can expect to receive RP600,000 in monthly assistance over four months. The government has allocated Rp37.7 trillion from the state budget for the program.

The government began its cash aid disbursement in late August as part of its latest measure to boost consumer spending. It has also allocated about Rp695.2 trillion in stimulus to bolster the economy, which is currently expected to shrink by 1.1 percent at worst or grow by 0.2 percent at best this year, marking 2020 as the worst economic performance that the nation has faced since the 1998 Asian financial crisis.

The second quarter of 2020 saw Indonesia’s economy contract by 5.32 percent as household spending, which accounts for more than half of the nation’s GDP, shrank by approximately 5.51 percent.

Despite the falling consumer spending, the government had only disbursed 28 percent of the stimulus as of 2 September, five months after the start of the outbreak, as red tape and lack of citizen’s data held up the release of the much-needed assistance.


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