Saving lives will save Indonesia’s economy

There is no trade-off between human lives and economics. The economy is about the people who interact in it, and when prioritising policies in a pandemic, humanity must come first, Rizki Nauli Siregar writes.

Undertaking no, or only minimal, public health measures such as physical distancing would be enormously costly for the Indonesian economy. In the short term, it may look seem that this might actually help the economy, because people and businesses can still operate­ as usual. However, as more people get infected and the healthcare system is overloaded, many people of all demographics will not be able to get enough care, for COVID-19 and for other non-pandemic health problems, and will die.

This will involve losing more doctors and nurses which as well as being a large human tragedy, would be especially costly to the economy. In the short run, it would reduce the capacity of the already-strained health system to save lives.

While states may be able to increase the number of hospitals relatively easily, whether by transforming hotels to hospitals or increasing the production and imports of personal protective equipment, masks, and medicine, losing health care workers is an irreplaceable loss of human capital and expertise – one which takes a very long time to replace.

As COVID-19 overwhelms healthcare capacity and nations lose more people their societies and economies also lose more talent. Many of the minds who will help the world to get back on its feet again after the pandemic is over will be gone if the virus is not contained effectively. This means that saving lives is saving the economy, both now, and in the long term, in Indonesia and everywhere else in the world.

More on this: Podcast: Coronavirus and a state of unease

It is imperative in this situation for economic policies to support to public health policies. The sequence of decisions from here becomes clear. Governments must decide what public health measures must be taken to save as many lives as possible given the constraints of their healthcare capacity, and use economic policy-making to make this practically possible.

This is the only way to make the pandemic less painful, but the Indonesian government is not doing enough. As an example of using economic policy to support public health, the government should provide a safety net for daily-wage workers, so that they can afford to stay home. Businesses need more support too, so that they can go on hiatus in the short term, but get back up and running with as few barriers as possible as the economy recovers.

The economic policies during the pandemic must aim to let people and businesses stay afloat, and they should be temporary and targeted. Targeting is especially important for economies like Indonesia with limited fiscal space.

Basically, these policies should reflect that Indonesia, and the world, must enter survival mode. Once the pandemic subsides and the economy starts to recover, it can then return to more standard countercyclical economic policies which aim to boost productivity, pump aggregate demand, and remove structural barriers for business in the long term.

The next natural question is whether there is time. Already, Indonesian healthcare capacity is critically overwhelmed, especially in the epicenter of the pandemic, the Greater Jakarta area.

More on this: Sums, germs, and fear

Yet, just a couple of days ago, Indonesian President Joko Widodo argued that Indonesia has specific characteristics that have led him to decide not to pursue a lockdown policy. While Indonesia does have specific characteristics, it is precisely because of these that stronger containment policies are even so critical, on top of mass tests.

So, what makes Indonesia different? On the behavioural front, there is a huge knowledge gap in understanding what the COVID-19 pandemic is and what the public can do to protect themselves. Physical distancing in Indonesia is just a suggestion for now.

Meanwhile, as the pandemic worsens, so does the panic that surrounds it. While this may not be a true reflection of the situation, it does drive public behaviour. To combat this, people need clear, credible, and timely guidelines and information. The government can engage public figures and use their voices to engage the population. Engaging religious leaders is especially critical, especially as Ramadhan and Eid Fitri are approaching.

Another crucial issue for Indonesian policymakers is unequal healthcare capacity across Indonesia, and even within the most populated island, Java. There are between 0.6 and 4.6 hospital beds per 1000 population in the epicenter, with most regions having below 2.0. By comparison, this number is 11.5 in South Korea and 3.4 in Italy.

In Java, 39 per cent of districts – by Statistics Indonesia’s 2009 definition – are among the bottom 40 per cent of jurisdictions for hospital beds per capita in the country, and 16 per cent of districts are among the bottom 20 per cent.

The ratio of doctors per 1000 people is also dire, sitting at 0.01 in Central Jakarta and 0.02 in South Jakarta, while it is 2.37 in South Korea and 4.09 in Italy.

All parts of society must now make their first priority saving lives. Economic policies in a pandemic should be designed to support public health policies and ensure that people are able to adopt and afford public health measures.

For Indonesia, the pandemic has already overwhelmed healthcare systems at the epicenter of infections and other parts of Indonesia are also ill-equipped to face a pandemic. It is urgent for the government to implement stronger containment measures, especially for Greater Jakarta, so that it can sustain the healthcare capacity and flatten the curve. Successfully flattening the curve will, of course, lengthen the pandemic, and if this can be compared to a marathon, governments may need to sprint the first 10 kilometres if they hope to finish in reasonable shape.