Emma Connors, Singapore/Jakarta – Tens of thousands of new COVID-19 cases each day have forced the Indonesian government to suspend months of careful planning to reopen the economy as it struggles to deal with the crisis at hand.
Across the Indonesian archipelago, many who normally work in the informal economy are once again relying on government handouts to put food on the table as normal life is suspended by the pandemic. The government has extended cash transfers to 10 million families for a further two months, after restrictions were stepped up.
Residents of Bali had expected this week to welcome back international tourists, who have been absent for more than a year. Those hopes have been dashed by a flood of new cases of COVID-19.
The delay is one more blow for the government of President Joko Widodo, which had hoped the economy would return to its pre-pandemic growth trajectory this year.
The recent surge in cases – more than 55,000 people on Sunday tested positive for COVID-19 over the weekend – combined with a relatively slow vaccination rate will cast a long shadow, according to economists at Indonesia's largest bank, BCA.
India has demonstrated a devastating second or third wave may not be as crippling to growth as the economic shock that came in the wake of the initial wave of infections last year, the BCA economists noted, but the rise of more contagious variants is prolonging the pain.
"In the long term... a combination of a relatively slow pace of vaccination as well as newer, more virulent strains of COVID-19 means that Indonesia's prospects of an American or Chinese-style rebound appear to be slim," the economists wrote in a research note.
BCA expects year-on-year GDP growth of 4.5 per cent this year. The Indonesian economy shrunk by 2.1 per cent in 2020.
Few families untouched
Stepped-up restrictions on Bali and Java, home to the majority of Indonesia's 270 million people, have combined with illness that has left few families untouched to crimp the earning power of millions.
The resilience and initiative of Indonesia's poor is under extreme pressure, according to Opportunity International Australia (OIA). The organisation is funded partly by the Australian government but mostly by individual and corporate donors including Macquarie, TechnologyOne and King&Wood Mallesons.
In some villages on the more remote Indonesian islands, away from urban hubs, local organisers have erected bamboo fences in an effort to keep the virus at bay, said OIA Indonesia program director Simon Lynch.
"Once the virus is in a village or a slum area, where people live so close, it's impossible to socially distance in the way we can do in Australia," Mr Lynch said.
While some have managed to find earning opportunities in the pandemic – by switching food stalls to takeaway for instance or relocating a stall from a market to a busy roadside – the majority are struggling, Mr Lynch said.
"About two-thirds of our clients have seen their incomes decrease. The level of sickness is such that many are no longer able to earn an income and then there are the restrictions on activity that cut off the supply of goods needed to run a business and reduce customers.
"Indonesians are extremely resilient people, used to dealing with many challenges. There aren't usually many barriers to entry so they will switch to selling whatever is required, from bananas one month to fish few months later," he said.
"What we are hearing, however, is that the reported case numbers are much lower than the actual case numbers."
At this point in the emergency, IOA and its agents are doing anything possible to help, including connecting people with government assistance.
"We are really worried about the hoarding of oxygen. We know from India that this drives up the number of deaths because people, particularly the poor, are unable to access oxygen because the price is going through the roof," Mr Lynch said.