Bambang Ismoyo, Jakarta – Indonesian business groups are raising concerns over a government plan to expand work-from-home (WFH) arrangements, warning the policy could weigh on household consumption and slow economic activity despite its intended energy-saving benefits.
Indonesian Chamber of Commerce and Industry deputy chair Sarman Simanjorang said the proposed WFH policy for both government employees and private sector workers risks dampening spending, particularly in urban areas where office activity drives demand across multiple sectors.
"The discourse on implementing WFH in both government and private sectors will also suppress household consumption, as transportation and related sectors will be under pressure," Sarman told Beritasatu.com on Monday.
The government is considering the policy as part of efforts to curb domestic fuel consumption after global oil prices surged due to conflict in the Middle East. Prices at one point climbed above $100 per barrel, significantly exceeding the government's assumption of $70, prompting authorities to seek ways to reduce energy use.
Chief Economic Affairs Minister Airlangga Hartarto said the shift could reduce national fuel usage by as much as 20%, largely by cutting daily commuting.
President Prabowo Subianto has approved the plan in principle, with authorities proposing a flexible scheme requiring employees to work from home one day a week. The policy is expected to be rolled out after the Eid holiday, depending on global energy market conditions.
While the measure aims to improve energy efficiency, businesses warn it could trigger a broader economic slowdown by reducing mobility. Lower commuter traffic would likely hit public transportation, ride-hailing services, and other mobility-linked industries, which rely heavily on daily office flows.
Micro, small, and medium enterprises (MSMEs), particularly food and beverage vendors operating in and around office areas, are also expected to face declining revenues as fewer workers commute. Office canteens and street vendors could see a drop in foot traffic, amplifying the impact on the informal sector.
The potential domino effect – reduced mobility leading to weaker consumption – poses a risk to Indonesia's economic growth, which has long been supported by strong household spending. Any sustained slowdown in consumption could ripple across sectors and weigh on overall output.
Separately, the government is also planning budget cuts across ministries and agencies, including reductions in official travel and equipment spending. Sarman said such measures could further disrupt domestic productivity if not carefully managed.
He urged policymakers to design mitigating strategies to ensure that businesses are not disproportionately affected and that Indonesia's growth targets remain within reach.
"The government must anticipate the economic impact of these policies so that national growth does not deviate significantly from its target," he said. Indonesia is aiming for a 5.4%-5.6% growth this year.
Authorities have said technical details of the WFH scheme are still being finalized, with further announcements expected once the framework is complete.
Source: https://jakartaglobe.id/business/businesses-see-downside-to-indonesias-wfh-plan-to-tackle-oil-shoc