Indonesia rolls out nearly US$25 bil more spending for coronavirus

Joko Widodo says new regulation enables financial authorities to protect public health, save national economy. (Twitter pic/jokowi)

JAKARTA: Indonesian President Joko Widodo declared a public health emergency over the coronavirus epidemic on Tuesday and said an additional US$24.9 billion would be spent to cushion its impact.

Widodo said he signed a new regulation that “gives financial authorities the power to take extraordinary steps to ensure public health, save the national economy and the financial system”.

The regulation would waive a cap on a maximum budget deficit for three years, he said.

“The government decided that the total additional spending to manage Covid-19 is as much as 405.1 trillion rupiah,” he said adding that this will widen the 2020 budget deficit to as much as 5.07% of gross domestic product, the widest in more than a decade.

The stimulus package includes a 3 percentage point reduction in the corporate tax rate to 22%, he said.

Other measures include expanding social welfare to benefit up to 10 million households, food assistance and electricity tariff discounts and waivers, he told reporters.

Medical experts have said the world’s fourth-most-populous country must impose tighter restrictions on movements as known cases of the highly infectious respiratory illness have gone from none in early March to 1,528, with 136 deaths.

Indonesia suspended all foreign arrivals on Tuesday after a study showed more than 140,000 people in the Southeast Asian country could die of the virus.

Fear about the disease and its impact on livelihoods is spreading.

“The impact of the virus can be felt a lot already,” said Ajun, 46, a motorbike driver for ride-hailing app Gojek.

He said he used to get up to 20 jobs a day before the outbreak but now got five at most.

“I’m scared … but I have a family that I have to provide for … where would I get money from?” said the father of two.