Mardika Parama, Jakarta – Public Works and Housing Minister Basuki Hadimuljono announced on Monday a plan to accelerate infrastructure spending in the third quarter while ramping up the ministry's employment scheme for labor intensive industries to spur economic recovery amid the ongoing health crisis.
"The PUPR will expedite all of its work programs in the third quarter, and even [commence] programs that are set for the fourth quarter. We hope that the infrastructure development projects will help our economic recovery efforts," Basuki said on Aug. 17 during an interview with public broadcaster TVRI, referring to the ministry by its abbreviation.
To date, the ministry has spent 44 percent of its 2020 budget of Rp 83.97 trillion, or Rp 36.47 trillion (US$2.4 billion). The ministry's annual budget has already been cut from its initial Rp 120.2 trillion to reallocate resources to the government's COVID-19 response.
Data at the National Development Planning Agency (Bappenas) shows that at least 3.7 million individuals have been left jobless, with unemployment projected to reach around 10 million people by the yearend.
The Indonesian economy suffered its sharpest downturn since the 1998 Asian financial crisis in the second quarter of 2020, when its gross domestic product (GDP) contracted 5.32 percent according to Statistics Indonesia (BPS).
Government spending, which is expected to anchor the economy and increase purchasing power amid cooling private sector activity, plunged 6.9 percent year-on-year (yoy) in the second quarter.
The government has allocated a Rp 695.2 trillion stimulus package to revive the economy and strengthen its COVID-19 response, but slow disbursement due to red tape and the continuing rise in COVID-19 infections have hampered economic recovery efforts.
Meanwhile, Basuki said the ministry would "transform" a number of regular infrastructure projects this year to employ 80,000 workers in labor intensive industries, in addition to its regular cash for work (PKT) program that targets absorbing more than 600,000 workers. The minister planned to disburse Rp 11.5 trillion for the PKT and Rp 654 billion for its labor-intensive public employment scheme.
"Through the labor-intensive scheme [sic], we can reduce the use of heavy machinery and use more manpower. We want infrastructure projects to provide jobs during the pandemic," he said.
Separately on Monday, Finance Minister Sri Mulyani said in a statement: "The government, through the state budget, will keep on fighting using the allocated budget to restore purchasing power toward recovering household consumption."
Earlier this month, Finance Minister Sri Mulyani Indrawati pledged to spend Rp 1.4 quadrillion in the second half of 2020 to boost growth while promising to accelerate stimulus spending.