The Indonesian government has implemented the Community Activities Restrictions Enforcement (PPKM) policy since early July 2021 because the number of positive COVID-19 patients has reached more than 50,000 cases per day. The policy, which initially would only be implemented for two weeks until July 20, 2021, had to be extended every week because the daily positive cases of COVID-19 in Indonesia were still high, above 5,000 cases.
The policy taken by the government is certainly not without risk, if PPKM is carried out for too long it will have an impact on household consumption which in turn will cause a domino effect, which will ultimately have an impact on the national economy. This is because the continued sluggish purchasing power will have an impact on many vulnerable middle class who fall into the new poor category. Furthermore, falling consumption will make the demand for goods and services also decrease, so that the producer must reduce production if they do not want to lose more. With the decrease in production, the performance of the business sector will also decrease. This condition will make investors choose to postpone or even cancel their investment.
Therefore, it is estimated that Indonesia will certainly experience negative growth again in Q3/2021 if PPKM continues to be extended.
There are only two events if the economy is to recover, namely mobility must return to normal and people’s incomes to recover.
However, the decision not to extend the PPKM was not without the risk of seeing the high daily positive cases of COVID-19. If the transmission status drops quickly, then the leeway given will help the economy. However, if the transmission status slows down as it is today, loosening the PPKM risks rapidly worsening the transmission status.
Previously, the government through the Coordinating Minister for Maritime Affairs and Investment Mr. Luhut Binsar Pandjaitan said that a trial of mall openings would be conducted in stages in the PPKM Level 4 area. He explained that the trial of opening malls during the next week will be carried out in the cities of Jakarta, Bandung, Surabaya and Semarang. The provision for visitor capacity is only 25% with the implementation of strict health protocols. On the other hand, only people who have received the COVID-19 vaccination are allowed to enter the mall. This provision is to reduce the potential for COVID-19 transmission in shopping centers. Another requirement is that only people over the age of 12 and under 70 are allowed to visit the mall.