Indonesia needs to “protect the people” and spend more to support them during the pandemic — and it’s not likely to impair the economic recovery, said its finance minister, Sri Mulyani Indrawati.

The so-called social safety net for Indonesians has been increased by 20% while health-care expenditure has been upped by nearly 19%, Sri Mulyani told CNBC’s “Squawk Box Asia” on Monday. Indonesia’s social safety net policies extend government support to the poor and those impacted by economic crisis.

“This is definitely shifting on our focus on the budget to protect the people,” she said. “Certainly, we want this not to be too long and that’s why it’s not going to affect our third quarter performance of the economy.”

Indonesia’s economy showed a “very strong rebound and recovery” in the second quarter, the minister said, adding that the focus is now on ensuring that the highly virulent delta virus can be contained.

“At the same time, also making sure that the normalization of the economic activity will not (be) at the cost of the increasing Covid (cases),” she said, adding that a spike in infections can overwhelm the health-care system.

Covid in Indonesia

Indonesia is still battling with a deadly resurgence of Covid-19 nationwide, as the spread of the more transmissible delta variant pushed daily cases to record highs in recent weeks.

The pace of vaccination in Indonesia has also lagged globally, a trend that is largely seen in most of Southeast Asia.

It is a good sign that we’re now seeing a tendency of declining of cases, especially in Java area – including Jakarta.

Sri Mulyani Indrawati

Indonesia finance minister

She listed three factors that will likely influence the length of the extension: the number of virus cases, healthcare facilities’ ability to cope with new infections, as well as the vaccination rate.

“It is a good sign that we’re now seeing a tendency of declining of cases, especially in Java area – including Jakarta. And in Bali the vaccination has already reached … almost more than 80% of the population,” the minister said.

With the country now having secured more than 150 million vaccine doses, the race is now on to reach “at least 2 million” inoculations per day as the military, police and nurses at the village level are mobilized for the effort, she added.



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