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Economist says Jakarta's WFH policy affects national economy

Tempo - August 24, 2023

Amelia Rahima Sari, Nur Khasanah Apriliani, Antara, Jakarta – Economist from the Center of Economic and Law Studies (Celios) Bhima Yudhistira mentioned that the work-from-home (WFH) policy implemented by Jakarta will affect the national economy.

"[The reason is] because Jakarta dominates 70% of the national money circulation," he said to Tempo on Wednesday, August 23, 2023.

In addition, Bhima explained that with the assumption of implementing the WFH to non-essential private sector employees as well as civil servants, the WFH policy is at risk of decreasing the economic indicators in Jakarta and its surrounding area. Private sector employees contribute to 40% of transportation household expenses.

"There is a risk of losing Rp215.8 trillion of regional GDP throughout 2023," said Bhima.

He explained that according to the data of Statistics Indonesia, the estimated average of household expenses for transportation, recreation, communication, and culture from 2018 to 2022 is 25.06%. Meanwhile, the estimated household consumption in Jakarta is Rp2,153 in 2023.

Bhima added that WFH could also decrease 30% of the hotel and restaurant sector's profit, adding Rp98.9 trillion of loss. The estimated expenses spent by Jakartans for hotels and restaurants from 2018 to 2022 is 15.3%.

"The calculation does not include the potential loss of regional GDP to the buffer cities surrounding Jakarta," Bhima remarked.

Previously, the provincial government of Jakarta is implementing a 50% capacity WFH policy for provincial civil servants from August 21, 2023, to October 21, 2023. The policy was implemented as a follow-up to the President's instruction to mitigate the effects of air pollution.

Source: https://en.tempo.co/read/1763475/economist-says-jakartas-wfh-policy-affects-national-econom