Indonesia hands cash grants to workers and small business owners

In a bid to boost consumer spending and business continuity in the country, Indonesia has begun to transfer US$4.5 billion of cash to 15.7 million workers and 12 million small business owners.

First announced on August 6, the cash transfer plan will provide 1.2 million rupiah (US$81) on alternate months, to workers, including temporary teachers, who earn less than 5 million rupiah monthly (US$341).

37.7 trillion rupiah (US$2.6 billion) has been earmarked for the programme, while micro and small business owners will further benefit from a new programme that will see business owners get a one-off payment of 2.4 million rupiah (US$163) from the government.

Urging businesses to use the money for “productive activities”, Indonesian president Joko Widodo highlighted that this should be seen as a grant for businesses, and not as a loan.

An estimated one million business owners have already received the fund, while 11 million others will receive theirs in stages throughout September this year.

READ: Indonesia set for first recession in over two decades

Indonesia’s economy shrank by 5.3% in the second quarter of 2020, the first contraction the country recorded in over two decades. The finance ministry also expected Indonesia’s economic growth to hover between -1.1% and 0.2% this year, raising the real prospect of a first recession since the 1999 Asian financial crisis.