The Palm Scribe

Senior Indonesian Minister Airs Optimism of Economic Recovery in 2021

A senior Indonesian minister on Wednesday (2/12) opened an annual conference on palm oil, airing optimism that the country’s economy may see a return to its pre-COVID-19 growth level in 2021.

Indonesian Coordinating Minister for the Economy, Airlangga Hartarto, opening the 16th Indonesian Palm Oil Conference (IPOC) 2020, also stressed that the palm oil industry has contributed significantly to the economy amid the ongoing pandemic.

“With the stimulus and the implementation and the national economic recovery program, we project that Indonesian growth could return to the pre-COVID growth, namely at 4.45 percent to 5.2 percent in 2021, assuming that the spread of COVID-19 is under control on effective distribution of vaccine in early 2021,” said Hartarto. Because of the pandemic, this year’s conference was held online.

Hartarto said that the country posted a positive growth of 2.97 percent year-on-year in the first quarter of the year but in the second quarter, growth turned negative at -5.32 percent year-on-year because of the pandemic. 

He said that the agriculture sector, including the palm oil industry, together with the forestry and fishery sectors, represented the third largest contributor to the Gross Domestic Product.

And to support a recovery of the economy the government is supporting the palm oil industry by taking three specific policies. He cited them as the issuance of the Omnibus Law, a presidential instruction on the postponing and evaluation of oil palm plantation concessions and the Indonesian Sustainable Palm Oil certification.

“We hope that most people would understand the efforts of the government to support the palm oil industry in a sustainable manner, Let us join force in development this by embracing its environmental and social  aspects without sacrificing the financial aspect in reaching this goal,” Hartarto said.

Bustanul Arifin, a professor in agricultural economics at the University of Lampung, who spoke at a following session, also said that “agriculture has served as a cushion for economic recession.”

Arifin was also convinced that the Indonesian economy would recover next year saying that “the Indonesian economy will recover in Q2-2021 as household consumption rebounds and SME empowerment and debt restructuring succeed.”

“Most of us are still optimistic to welcome the opportunity in 2021. We believe the ongoing development of vaccines will succeed, so by early 2021 people can start to have the vaccines. We do hope the pandemic will be overcome soon,” said Joko Supriyono, Chairman of the Indonesian Palm Oil Producers Association (GAPKI) speaking at the same occasion.

A more conditional optimism was aired by economist Chatib Basri of the University of Indonesia, who said that a recovery was taking place but unevenly, but even that would depend on the country not being hit by another wave of COVID-19. 

“All in all, I can see the possibility of an economic recovery, Indonesia will post a positive growth by 2021,” he said adding however that “these projections are based on the assumption that there would be no second wave of the pandemic.”

A second wave of COVID-19, he said would lead to a drop in growth and therefore putting the pandemic under control should be the top priority for the government and the country as a whole.

Hartarto said that the government was doing its best to respond to the pandemic and keep the economy afloat. “To ensure that we can rise again as a nation we will need to put the appropriate measure in responding to the impact and chart a course for a transformative economic recovery,” he said.

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