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Indonesia to boost social, health spending amid COVID-19 battle

Indonesia will increase social assistance and healthcare spending in response to a spike in COVID-19 cases and to soften the economic blow of tougher restrictions taking effect this week, its finance minister said on Friday (Jul 2).

Indonesia to boost social, health spending amid COVID-19 battle

A young boy holds a cat as he waits to take a swab sample to test for COVID-19 during mass testing at a school in Jakarta on Jul 2, 2021. (Photo: Reuters/Ajeng Dinar Ulfiana)

JAKARTA: Indonesia will increase social assistance and healthcare spending in response to a spike in COVID-19 cases and to soften the economic blow of tougher restrictions taking effect this week, its finance minister said on Friday (Jul 2).

Battling one of the Asia's worst coronavirus outbreaks, the world's fourth-most populous country has seen record new infections on eight of the past 12 days, including 25,830 on Friday, and a record 539 deaths.

"Emergency" curbs will be imposed from Saturday, including tighter restrictions on movement and air travel, a ban on restaurant dining and the closure of non-essential offices.

"There is a potential for the economic outlook to weaken in the third quarter due to the mobility restrictions," Finance Minister Sri Mulyani Indrawati told a news conference, adding that the impact would depend on how long they last.

Fawziah, a one-year-old infant, reacts as a healthcare worker takes a swab sample to test for COVID-19 during mass testing at a school in Jakarta on Jul 2, 2021. (Photo: Reuters/Ajeng Dinar Ulfiana)
A healthcare worker in personal protective equipment takes a swab sample from a young girl to test for COVID-19 during mass testing at a school in Jakarta on Jul 2, 2021. (Photo: Reuters/Ajeng Dinar Ulfiana)

Southeast Asia's biggest economy suffered its first recession in more than two decades last year due to the pandemic, but Sri Mulyani said that a recovery had been gaining momentum prior to the latest flare-up.

The economy likely grew for the first time in over a year in the April to June quarter, and the government had expected 6.5 per cent growth in the third quarter before the curbs were announced.

READ: Indonesia 'emergency' COVID-19 curbs to take effect on Jul 3

READ: Indonesia business warns risk of layoffs, bankruptcies from new COVID-19 curbs

The highly transmissible Delta variant that caused a spike in cases in India, where it was first identified, is spreading in Indonesia and pushing hospitals across the most populous island Java to the brink.

Health Minister Budi Gunadi Sadikin on Friday said that Delta variant outbreaks happen primarily on Java.

That includes the capital Jakarta, where some emergency wards have been moved to tents in hospital car parks, with a surge in COVID-19 patients stretching medical care capacity.

A man wearing a protective mask sits on a pedestrian bridge in Jakarta on Jul 2, 2021, while Indonesia prepares to impose emergency measures tightening restrictions in Java and Bali as COVID-19 cases surge. (Photo: Reuters/Willy Kurniawan)

Sri Mulyani said that 126.79 trillion rupiah (US$8.72 billion) of social assistance would be provided to help tens of millions of households, through cash transfers, electricity discounts and by accelerating food aid programmes.

Healthcare spending will rise 8 per cent to 186 trillion rupiah, including on adding more staff for vaccinations and COVID-19 treatment, she said.

The government has pledged to boost testing and speed up vaccinations, with just 7.5 per cent of the targeted 181.5 million fully vaccinated.

READ: Indonesia's COVID-19 situation nears 'catastrophe', says Red Cross

READ: Bali reopening to foreign tourists delayed as COVID-19 surges

Indonesia has relied mainly on the Sinovac vaccine, but authorities are looking to diversify sources. Budi said that the Pfizer-BioNTech mRNA vaccine could be administered to those under 18, when delivered in August.

He also said that Indonesia was committed to invest in producing mRNA vaccines locally.

The food and drug agency on Friday approved the Moderna mRNA vaccine, ahead of the arrival of 4 million doses via the international COVAX scheme.

The Netherlands will also donate 3 million doses of COVID-19 vaccine, Indonesia's Foreign Minister Retno Marsudi said.

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Source: Reuters/kg

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