Stalled stimulus causes hardship for MSMEs

Tough impact: A vegetable seller arranges his produce at a market in Lhokseumawe, Aceh. Indonesia’s economy is struggling as the country continues to be ravaged by the pandemic. — AFP

JAKARTA: Slow stimulus spending threatens Indonesia’s recovery as smaller businesses that are the backbone of the economy have been kept waiting for much-needed funds to weather an extended lockdown.

Only about 30% of more than 186 trillion rupiah (US$13bil or RM55bil) of combined national and provincial government aid has yet been disbursed for micro, small and medium-sized enterprises (MSMEs), Finance Ministry data show. Stricter movement curbs imposed in early July are weighing on the economy in many parts of the archipelago, leading Finance Minister Sri Mulyani Indrawati to urge local governments to speed up spending, which was lower through mid-year than in 2020.