Indonesian Capital to Ease Lockdown to Help Restart Economy

(Bloomberg) --

The Jakarta government will begin easing restrictions put in place to counter the spread of Covid-19 as authorities in Indonesia push to reopen Southeast Asia’s biggest economy.

The capital will begin transitioning to a lifting of curbs with offices, restaurants and retail outlets permitted to open from June 8, albeit with a 50% capacity limit, Jakarta Governor Anies Baswedan said Thursday. It was still too soon to fully lift large-scale social distancing rules, he said, with the announcement coming as Jakarta continues to record new cases from the disease.

“Please be patient,” Baswedan said Thursday in a televised address. “If in the transition we see a jump in cases or deaths we will not hesitate to take emergency-break measures,” he said.

Jakarta, a city of about 11 million people, had until recently been the epicenter of the pandemic in Indonesia with almost 8,000 cases and more than 500 deaths from Covid-19 since the first confirmed infection in March.

While no new deaths were reported in the capital on Thursday, 94 new cases were added and total Covid-19 fatalities in Jakarta at 523 is the highest in the country, according to government data.

At the same time, measures put in place to counter the spread of Covid-19 in Jakarta and elsewhere in Indonesia, including restrictions on the movement of people and shutting of businesses, have weighed heavily on commerce, contributing to massive job losses. The national economy is expected to miss a revised estimate for growth for this year of 2.3%, Finance Minister Sri Mulyani Indrawati said Wednesday.

Transition to Recovery

The Jakarta administration will continue transitioning to a further lifting of restrictions with malls to be allowed to open from June 15 and tourism sites from June 20. Public transport services will resume operations, but will also have a 50% capacity limit.

The decision to ease restrictions in Jakarta, the financial hub and an engine of growth for the Indonesian economy, comes after a similar move in the country’s most populous province of West Java in recent days. The central government has separately announced it plans to reopen the country to foreign tourism as early as September and to domestic holidaymakers by the end of July.

President Joko Widodo also ordered his top economic officials to expedite an economic recovery program, while telling them to mitigate fiscal risk, amid warnings that the nation’s credit rating could be in jeopardy.

As of Thursday, Indonesia had 28,818 cases of Covid-19 while the death toll had risen to 1,721.

©2020 Bloomberg L.P.