Vice President explains gov’t’s efforts to handle scarring effect

Internal Affairs

Indonesian Vice President Ma’ruf Amin has said the government has carried out various efforts to handle the scarring effect as people are afraid to spend and invest their money due to the pandemic.

“Scarring effect is a concern harbored by most economic actors,” he noted during “the Economic Challenges, Special Ramadhan” aired on a private television station on Saturday.

“This happens in the face of uncertainty because of the pandemic,” he continued.

To handle this issue, the government encourages financial institutions to continue to distribute credit, especially to priority sectors such as tourism and Micro, Small, and Medium Enterprises (MSMEs).

The government also pushes the business world to utilize digital technology while conducting economic activities.

“Next, the government continues to bolster the people’s consumption activities through national economic recovery policy so that the people can develop their consumption,” Amin informed.

The government has among others increased the deficit budget to provide fiscal space.

The government also facilitates financing restructurisation extension and increases the social protection budget allocation each year.

“So that the people’s purchasing power does not decline,” the vice president said.

During the event, he also noted that risk sharing scheme is a development strategy concept to create a resilient and dynamic country.

“This risk sharing concept stresses that risk must be distributed to all parties involved so that not only one party has to bear the burden,” he said.

“The risk became lighter as a result,” he added.

Risk sharing scheme can be observed in insurance, banking, and infrastructure development schemes.

The concept of risk sharing is implemented in development as one of the solutions to avoid economic crisis and maintain financial system stability because it avoids excessive loss in one party.

Source: Antara News