Coordinating Minister for Economic Affairs Airlangga Hartarto made the remarks at a press conference in Jakarta on Monday.
“To prevent the risks of potential short-term layoffs, the government will push the central and regional budgets to use domestic products,” he said.
To prevent lay-offs in the medium term, the government will encourage structural changes in the upstream and downstream industries through improvements in the supply chain and human resources (HR), research and development, and assistance in market access, he informed.
“This includes accelerating the completion of comprehensive economic cooperation agreements (CEPA), including a CEPA with Europe and several other non-traditional export markets,” the minister said.
In addition, the government will optimize central and regional government spending on work-intensive programs in both cities and villages.
“Government-to-government cooperation will also be expanded for the migrant worker program,” Hartarto said.
Meanwhile, financial inclusion will be increased through the Permodalan Nasional Madani (PNM) and People’s Business Credit (KUR) programs.
“Worker skills will also continue to be improved with upskilling and reskilling programs such as the pre-employment card program,” the minister disclosed.
In the near future, the government will revise Government Regulation (PP) Number 1 of 2019 concerning export proceeds of foreign exchange from exploitation, management and/or processing of natural resources, he added.
“Especially with the Law of the Financial Sector Development and Strengthening (UU P2SK), which has given authority to Bank Indonesia (BI) to regulate the flow of foreign exchange,” Hartarto said.
Under the revision that is being finalized by BI and the Ministry of Finance, domestic foreign exchange reserves can come from exports of manufactured products or downstreaming of natural resources.
“We will support investment credit and working capital credit, especially to encourage downstream operations. This aims to ensure the manufacturing sector can be encouraged by domestic banks,” he explained.