Indonesia Weighs Easing Lockdown From June to Save Economy

Indonesian officials have begun discussions about reopening Southeast Asia’s largest economy in phases starting from June, as job losses accelerate and businesses struggle to survive amid strict social-distancing rules against coronavirus.

The Coordinating Ministry of Economic Affairs earlier this week discussed an “exit strategy” from the partial lockdown imposed in large cities, including the greater Jakarta area. The strategy calls for social-distancing rules to be removed in five phases, with the economy completely reopened by late July or early August.

The proposals may still be modified as other ministries, and the task force dealing with virus response, need to agree on the course for reopening, said Raden Pardede, a special adviser to Coordinating Minister for Economic Affairs Airlangga Hartarto. The trajectory of virus spread will be a key factor in deciding the timeline, he said.

Authorities in Jakarta have extended the partial lockdown—which includes a ban on gatherings of more than five people, limited public transport and mandatory work-from-home—to May 22. More than 20 other cities and three provinces have similar restrictions in place through the end of May.

President Joko Widodo’s administration is preparing to ease curbs on mobility even as the virus continues to infect and kill people, echoing a push to gradually reopen economies from the U.S. to Britain amid massive job losses and damage to business. Widodo said Thursday that Indonesia was fortunate not to have imposed a nationwide lockdown, “but now we want the wheels of the economy to keep rolling” even as efforts to contain the pandemic intensify.

Jokowi, as Widodo is commonly known, has vowed to flatten the virus curve this month “at all costs and means.” Doni Monardo, chief of the virus task force, has said Indonesians can expect to resume their normal life in July, with some health protocols remaining in place.

The urgency to moderate social-distancing measures stems from the grim outlook for Indonesia’s economy, which grew at its lowest pace in almost two decades in the first quarter—even before data reflect the pandemic’s full toll. With much of the economy grinding to a halt, policy makers and the central bank are betting that a return to normalcy in the third quarter will trigger a rebound.

“The government should be focused on controlling the pandemic and widening the stimulus for the economy” as missteps at this stage can aggravate the crisis, said Bhima Yudhistira, an economist at the Institute for Development of Economics and Finance. “All the indicators should be clear before lockdowns are lifted.”

Indonesia had 13,112 confirmed virus cases and 943 deaths as of Friday, the most fatalities in Asia after China and India. Even with movement restrictions and a travel ban, the disease will ultimately infect about 95,000 Indonesians, according to officials. Jokowi said Thursday all efforts are directed at containing the spread, but the number of new cases may spike before trending down.

“Until the discovery of an effective vaccine, we must live in peace with Covid-19 for some time to come,” Jokowi said. “We are trying hard and hope that the peak of the Covid-19 pandemic will soon decline.”