Ghoida Rahmah, Jakarta – The Center of Reform on Economics (CORE) Executive Director Mohammad Faisal explained that the ongoing downturn of business performance and economy potentially triggers a massive wave of layoffs, which leads to a spike in unemployment and poverty rates.
"The government must respond by expanding the social assistance, increasing the budget, and expediting the distribution," said Faisal to Tempo on Wednesday, September 23, 2020.
Faisal explained that social aid must be targeted to the widest possible communities, especially those most affected by the pandemic, such as the micro, small, and medium enterprises (MSMEs).
"For example, the target of cash assistance for entrepreneurs is only 12 million, while the total number of entrepreneurs reaches 63 million," he said.
In addition, the wage subsidy program for workers earning below Rp5 million that only relied on data from the Social Security Administration for Employment (BP Jamsostek) and formal employees.
"Informal workers need to be included in the program, and the priority should be for those who are laid off."
An economist who was also a former finance minister Chatib Basri opined that social protection is the main weapon that needs to be optimized amidst the weakening economic performance. "The focus on the most effective programs should be expanded, rather than on unproductive programs," he said.