IO – The Coronavirus outbreak is spreading concern within the community as news of the number of affected patients continues to surge. In Jakarta, public transportations restrictions on Transjakarta and the MRT began to be put in place as an anticipatory measure to the outbreak of Coronavirus.
This policy clearly disrupts economic activity, because not all workers can “work from home”, aka “working at home”. The discourse on limiting people’s movements is moving wildly.
In fact, there are only a few countries that have imposed lockdowns, such as Italy and China, while Japan and Singapore employ different strategies to ward off Covid-19.
According to Lindsay Wiley, from the Washington Law College, the definition of lockdown is actually unknown in public health policy. In a general sense, the definition of lockdown itself is too broad, because it includes quarantines, restrictions on access to public spaces, closing of schools to limiting access to one specified area within a certain period of time.
The public view regarding a lockdown in Jakarta is certainly divided: there are those who propose to close a certain area – similar to what was done in Wuhan – with access in and out to other areas closed off. Another approach is to instruct employees to work from home, thus cutting operational hours of public transportation.
What happens if a lockdown is applied to Jakarta?
The economic impact on Jakarta will certainly be acute for the national economy. If Jakarta is totally isolated, the national economy could find itself in crisis sooner than initially thought.
As much as 70 percent of the money supply is in Jakarta; the stock exchange and the central bank are also located in the capital cit.
Panic could sweep the metropolis, triggering people to withdraw cash money from banks to purchase basic needs. Bank liquidity would be in danger of drying up, while hoarding and panic buying would crater food stocks.
We need to learn from the experience of fear-motivated purchases that already occurred in several areas of Jakarta. When the government announced diagnosis of the first Corona patient, it quickly became clear that both central and regional governments could do nothing to forestall such frenzied purchases.
Moreover, the holy month of Ramadan is fast-approaching, in April, when seasonal food demand needs soar. Public panic in buying up basic necessities, along with stock in pharmacies (medicines, masks, hand sanitizers) stokes the risk of high inflation.
A simple estimate of inflation throughout 2020 can break the 4-6 percent mark as a consequence of a lockdown in Jakarta. This figure does not take into account the specter of evil speculators, illegal hoarders who take advantage of the dire situation to withhold stock or deliberately hoard goods that people are searching for.
Who is thus most acutely affected by a lockdown? Obviously, the answer is not “…rich people in Jakarta”.
The wealthy control 46 percent of total consumption in Jakarta, and are thus able to hoard goods in large volumes, especially if prices of medicines, masks or hand sanitizers soar, as was recently evident.
Who can afford the price of a face mask on a shopping site when it hits Rp1 million per box? Only the upper middle class, while lower middle-class citizens must be prepared to tighten their belts.
While the upper classes go panic buying, the poor otherwise have no idea whether tomorrow they will have anything to eat or not.
When office employees in multinational companies take a paid leave of absence, or work from home, drivers of online transportation are confused, because orders suddenly dry up and this job certainly cannot be “done at home”: there are around 2 million online transportation drivers, most of whom are in the Jabodetabek area.
Rich people living in magnificent palaces: all they have to do is click to order food, made via e-commerce, and, voila, the foods will be magically delivered to their door, while the poor may have to pay excessive amounts, when many shops close.
In terms of health issues, health insurance with the finest hospital facilities is a privilege of the rich in Jakarta. If Coronavirus health tests are not all paid for by the state, this rich person does not need to worry – especially about the BPJS Health deficit; they just simply don’t care, while the poor are most vulnerable to any decline in health facilities, especially during a crisis.
It’s clear that any lockdown would mean a hellish situation for the lower classes. The vulnerability of the destitute will only widen the gap that is already there. In a pinched situation, it is not impossible that horizontal conflicts will break out.
How ready is the Government?
Neither central nor regional governments seem to be prepared if a lockdown is suddenly imposed, as can be seen by the chaotic coordination of central and regional policies.
Fighting for the Public Stage
The pattern of communication that competes for the stage between the regional heads, and the stuttering of economic stimulus 1 and 2 launched by the government, shows that a lockdown discourse would lead to total chaos.
The availability of hospitals, quarantines, and Coronavirus check tests is still inadequate. Singapore provides free masks, delivered from house to house; in Indonesia, the supply of masks is just a toy for illegal hoarders, as they disappear from the markets.
Readiness from the economic side is more concerning, as staples depend partly on the availability of imports.
Coronavirus outbreaks have disrupted import supply chains, especially from China – for example, garlic. It’s not that easy to look for import substitution, because the issue is so sudden. Indonesia’s food independence has become doubtful.
This is different from China, where the stock of food needs to supply citizens quarantined in apartments, houses, and buildings is supplied by the Chinese Government. In Wuhan, the state is there to fulfill the needs of citizens.
It’s no strange story when an Indonesian student isolated in his dorm room in Wuhan finds himself replete with food for weeks, supplied by the campus.
In addition to the lockdown method, is there another, more balanced, to cut down on transmission of the Covid-19 virus while still continuing to encourage the sustainability of the economic wheel.
Singapore provides an example, without any lockdown.
Singapore Prime Minister Lee Hsien Loong revealed that the focus of health care is on the elderly, because they are the most vulnerable to Covid-19. Restricting travel by foreigners from many countries and delaying public events are other measures.
In addition, Singapore also mixes fiscal and monetary policy very well, with the Singapore Government firmly allocating US $ 4billion, equivalent to Rp59.2 trillion, to support finance for companies affected by Covid-19.
Japan is more concerned with clustering and tracing the contact history of victims, rather than lockdowns.
As quoted by John Hopkins University data, the ratio of Covid-19 cases in Japan is 0.5 per 100,000 inhabitants lower than other OECD countries. In comparison, the ratio of China is 5.81 and Italy is 20.6 cases per 100,000.
So, considering the condition and readiness of Indonesia, a lockdown scenario should be weighed more carefully. Don’t follow along with other countries whose economic structure is stronger than that of Indonesia.
And most importantly, the most expensive price may be paid by SME entrepreneurs, online transportation drivers, lowly employees, and the poor – who never have enough stock during a crisis.