The Geo-economy of the Pandemic: Indonesia’s Respond The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung. Imprint ©2020 Friedrich-Ebert-Stiftung Indonesia Office Jalan Kemang Selatan II No. 2 A| Jakarta 12730 INDONESIA Responsible: Sergio Grassi| Resident Director Phone:+62-21-7193711 Fax:+62-21-71791358 Email: info@fes.or.id Website: www.fes-indonesia.org Commercial use of all media published by the Friedrich-Ebert-Stiftung(FES) is not permitted without the written consent of the FES . Friedrich-Ebert-Stiftung(FES) is the oldest political foundation in Germany. The foundation is named after Friedrich Ebert, the first democratically elected president of Germany. With an international network of more than 100 countries worldwide, it contributes to fostering the core of social democracy – freedom, solidarity and social justice. FES established its Indonesia Representative Office in 1968 and since 2012 has been in cooperation with the Coordinating Ministry of Human Development and Culture(Kemenko PMK) Republic of Indonesia in order to pursue social justice in politics, the economy and in the society as one of FES leading principles worldwide, FES Indonesia has been conducting various activities in recent years to support the Social Security Reform, Welfare State, and Social Economic Development in Indonesia as well as promoting Indonesia as a reference to other countries in the region and at the international level for democratization, socio-economic and peaceful development. www.fes-indonesia.org

Contents The Geo-economy of the Pandemic: Indonesia’s Respond 1 1. From Geopolitics to Geo-economics: An Evolving Discourse 2 2. Indonesia’s Pandemic Response Policy So Far 10 3. The Domestic Impact of the Pandemic 13 4. Development of Cooperation in the Context of Pandemic and Trade 16 a. Regional and Multilatera l 16 b. Bilateral Cooperation 19 5. A number of Achievements and Future Tasks 21 a. Notes on Achievements 21 b. Notes on Poor Performances 22 Reference 23 List of Abbreviation 27 Profile of Writers 30

Friedrich-Ebert-Stiftung Indonesia- 2020 The Geo-economy of the Pandemic: Indonesia’s Respond Makmur Keliat, Malinda Damayanti, and Reyhan Noor This paper aims to identify Indonesia’s policy response to the COVID-19 pandemic from a geo-economic perspective. For this purpose, this text is divided into five main parts. The first part begins by describing the geo-economic perspective as the analytical tool used in this paper. Next, the second part describes the Indonesian government’s strategy in responding to the pandemic by making adjustments in fiscal policies. Meanwhile, the third part specifically discusses the impact of the pandemic on the components of the domestic economy. The fourth part describes policies and economic diplomacy strategies taken by the Indonesian government in responding to the global impact of the SARS-CoV-2 virus. As the final part, the fifth part concludes and evaluates the government’s handling of the pandemic. The COVID-19 pandemic, which was caused by the SARS-CoV-2 virus, has indeed posed challenges in the context of academic discourses and ideas. Before the COVID-19 pandemic emerged at the end of 2019, the most prominent discourse on a model of economic development to be recommended for many countries, especially for developing countries, was a more market-oriented model built on cost efficiency considerations. Several key words emerged in relation to efforts to achieve efficiency, for example the importance of global connectivity and global supply chain. The COVID-19 pandemic, however, has pulled some of those keywords backward, not to say that they have all disappeared. It is also interesting to note that previously the media focused their attention more on how to increase economic growth, whereas this 1

The Geo-economy of the Pandemic: Indonesia’s Respond year the media has been reporting a lot about economic contraction experienced by many countries. If previously the issue of economic development was better understood from the technical economic issues favored by the market, for example, saving-investment gap, technology and physical infrastructure, the COVID-19 pandemic has changed all of those. Now the media is filled with reports about death rate, mortality rate, and transmission rate (R0). In summary, the current dominant discourse today is how to find a balance between protecting lives and protecting livelihoods. The paradigm that dominantly stood out before the pandemic occurred was to spur growth, where for the purpose of this growth liberalization was carried out in many sectors. Among the keywords that came up for this paradigm, for example, were how to create a better ranking for ease of doing business and strengthen global supply chains. However, these key words can no longer be effective in attracting investment, as they have been overruled by reports on death rate, mortality rate, and R0(transmission rate). Given such condition it is not surprising that the COVID-19 pandemic has indeed led to a market shock, both from the demand side(demand shock) and the supply side(supply shock), possibly even leading to a financial shock. The above surprises occur because human activities as economic agents have become very limited, even more so in order to prevent the spread of transmission. The policy prescriptions offered have also been varied, both ranging from a very strict one, such as lockdown or quarantine of particular areas, to a moderate one, such as social distancing or maintaining distance between individuals. Yet, all of them are actually in contradiction with the grand idea of globalization. Globalization is experiencing a pause because of the COVID-19 pandemic. Various reports truly indicate that projections for foreign direct investment globally are showing a drastic decline. Under such greatly uncertain situation every government is forced to put priority on approaches that tend to be inward looking. The state’s priorities in protecting the livelihood of its citizens involve policy intervention and provision of stimulus. In this momentum, it is neither a negative nor a bad issue, if in the context of providing intervention and stimulus, the government borrows more and hence widens the budget deficit. 1. From Geopolitics to Geoeconomics: An Evolving Discourse Concept-wise, geo-economic studies the originated and developed from geopolitical studies. The basic assumption of geopolitical studies is that the behavior, orientation and management of power are strongly influenced by its geographical environment. As a consequence, understanding politics must begin with understanding the geography in which 2

Friedrich-Ebert-Stiftung Indonesia- 2020 various groups of communities live. Given geographic environments vary, it is not surprising that the behavior, orientation and management of power among communities are also not single, instead varies from one region to another. The behavior of the people who live in coastal areas is likely to be different from that of the people living in the mountainous highlands that are based on dry agriculture. For example, for inter-island and intercontinental traders and also for fishermen the sea is the place where exploration and expansion began. Naturally, this kind of power orientation is unknown to the peasants who lived in the highlands. On the contrary, for them the coastline is the end limit of exploration and expansion. The sea is generally a mystery to people who live in mountainous and highland areas. In is likewise in the management of power. Strong cooperation and a solid hierarchical structure are the basic characteristics of power management for communities whose economic life depends on the sea. This is slightly different from the farmers in the highlands. They have a more individual character, especially when their residential areas tend to be scattered and when the location of their agricultural land is far from their residential areas. Similarly, the management of power for peasants living in the lowlands is different from that of the peasants who live in the highlands. Even though they are both agricultural-based farmers those who live in the lowlands are always faced with challenges in managing and controlling the wetlands that affect their lives. An irrigation system is one of their solutions. Once irrigation system is established the management of power becomes more complicated since irrigation requires greater bureaucratic power management due to the need to distribute water regularly, fairly and efficiently to farmers. The character of power management based on a large bureaucratic organization like this certainly does not appear to emerge strongly among peasants who live in the highlands with dry land characteristics. It was through the meta-narratives about the influence of geography on political behavior like this that geopolitical studies have developed. Such studies have also influenced the perspective of the discipline of international relations in its early stages of development. For example, geography is said to be a permanent factor in relations between countries. It means geography is very difficult to ignore, because it will always be present when analyzing state behavior. It is believed that the behavior of a country with a continental geographical landscape will be very different from the behavior of a country with an archipelagic area. In addition, it is also believed that there is a very close interaction between geography, history, culture-identity, and the economic base of each nation. Geography is believed to form the history, culture, identity and economic basis of a nation. Therefore, geopolitical studies have a strong tendency to be very national biased because it is not the same between one nation and another. 3

The Geo-economy of the Pandemic: Indonesia’s Respond In the early phase of its development, this study was also known as classical geopolitics. Several strategic and substantial concepts have been raised for each country, such as control over territory and space. It is called strategic and substantial because territorial control is seen as closely related or attached to the concept of sovereignty, as well as with the concept of territorial boundary. Control over a territory is said to provide justification for developing land, sea and air power for defense purposes, as well as of course for expansion purposes. Authority over space provides justification for developing the carrying capacity of living space. Before World War II there were several classical geopolitical figures who were known as great strategic thinkers. One of them was Friedrich Ratzel with his idea of t​​ he organic nature of state. Similar to that was Rudolf Kjellen with the idea of ​a​ biological organism for each nation to become an advanced culture. Not to mention Sir Halford Mackinder with his heartland theory. Of course one cannot leave behind Karl Haushofer with his idea of ​le​ bensraum. However, after the end of World War II, these strategic thinkers based on geopolitical studies were no longer the mainstream in the studies. One of the main reason for the shift was that these geopolitical strategic thinkers had influenced and inspired political leaders who sparked the second world war. There is a hidden danger behind the argument that the state has a need for living space and continues to develop like a biological entity. It was based on such thoughts that wars had been chosen by states as a means to expand their territory. The bad reputation they earned had led to geopolitical thinking experiencing a long phase of slumber after World War II. Geopolitical studies re-emerged in the 1990s along with the rise of the critical- constructivist paradigm. There is an academic belief in the tradition of critical-constructivist thinking that the geographical component is not something physically permanent, but rather a sociocultural construction and a political resource. Geography may denote different things to different people at different historical times and places. Because of the strong influence of this criticalconstructivist paradigm, geopolitical thinking that emerged after the 1990s is often referred to as critical geopolitics. The critical geopolitical thinkers include John Agnew, Klaus Doods and David Atkinson (Agnew dan Corbridge, 2003; Dodds dan Atkinson, 2003). One of the hallmarks of post-90s critical geopolitics lies in the recognition of the importance of the concept of discourse in social and political sciences. In this critical geopolitical perspective, discourse is seen as a way for theorists to practice their views with certain goals and interests. Therefore, the idea of t​​he importance of geographic factors in global politics is not something that is certain or inevitable, but is rather the result of cultural constructed that is politically supported through discourses and state practices. Almost every country 4

has its own unique geopolitical and geostrategic views in the face of threats from the outside world. This also shows that a state’s geopolitical discourse is deeply affected by the character of its national bias. Likewise, critical geopolitics questions previously coined terms such as“heartland” and“rimland”. As a result, there are also some academics that view geopolitics as a discourse with two overlapping components. The first component is the praxis component, which basically supports foreign policy. This component divides the world space into various regions with various attributes such as threats, dangers, vulnerabilities, and others. The second component is the“formal” component. This component was established by “security intellectuals”, of which the aim was to produce theories and strategies to justify the actions of the first component. This critical geopolitics also results in a discussion that the discourse on geopolitics has a strong tendency to produce a division of space. In turn this division of space has the consequence of creating the issue of identity politics, the boundary between “our” and“their” spaces. In this case, the issue of identity politics is not only related to the issue of knowledge from the elite, but it has also found its expression in everyday cultural products such as television, novels, newspapers and so on, which give birth to the term“geopolitical culture”. By using the tradition of the critical thinking paradigm, the bipolarity of Friedrich-Ebert-Stiftung Indonesia- 2020 terminology during the Cold War was actually inseparable from the geopolitical way of thinking, albeit in a concealed form. Geographically, bipolarity of ideas have, for example, separated or drawn a demarcation line between“us” and “them”. Likewise, the term cold war in the bipolar context also had to do with identity issues, because it tends to be understood in terms of the division of identities between the communist blocs versus the democratic blocs. However, due to the bad name it earned after World War II, these geopolitical views and ways of thinking were concealed behind the term“bipolar”. What is also interesting to unravel is that as the classical geopolitical way of thinking fades away, the term geo-economics has become increasingly popular in the tradition of critical geopolitical thinking. Further literary tracing shows that the term geo-economic is a product of the long period of peace after the end of World War II. This term emerged when the wars that we are familiar with as those in the past are no longer possible to emerge. However, this by no means indicates that competition between countries has disappeared. In the geo-economic context, countries compete for economic power. Within this understanding, geo-economic terminology can also be referred to as economic geo-politics, which is replacing the military geo-politics that was very dominant in the past. The long period of peace after World War II had become the basis to launch liberalization. The collapse of the Soviet 5

The Geo-economy of the Pandemic: Indonesia’s Respond Union had led to strong liberalization. After that, came an overwhelming optimism that the world had come to the end of history. The world became universal. This optimism, however, had no solid foundation. In fact, some academics, such as Robert Gilpin(2002), for example, argue that global liberalization has created greater competition between countries. Not all countries will end up being winners. The potential for conflict in this liberalization situation cannot be completely eliminated. Those who feel left out in the process, both state and nonstate actors, have responded negatively to this liberalization. These negative attitudes towards global liberalization may be expressed in a variety of actions, ranging from the soft ones, such as a more closed regional framework, through bilateral frameworks, to the very violent ones such as retaliation through protectionism and unilateralism. This negative attitude can even be adopted directly by national leaders to get electoral support, by manipulating political issues through religious conservatism. What is then unique about this is that the entire potential conflict does not lead to largescale military conflicts as happened in the past, but instead to conflicts in the economic sphere, such as finance and trade. So far the institutional framework at the international level has succeeded in accommodating these conflicts hence making geo-economic terminology more relevant. Basically, a geoeconomic analysis framework is oriented towards obtaining markets for goods and services in potential or new regions at global level. Therefore, the geo-economic perspective is more interested in controlling economic and financial assets as well as mastery of technology than in controlling territories. This method of control is not carried out through military force, but rather through economic instruments such as investment, loan assistance, bilateral cooperation frameworks and even through unilateral instruments such as blockades and even embargoes. The actors can be countries, transnational corporate networks with global supply chain strategies and, of course, what is equally important is the fact that it is carried out driven by the ambition of national leaders. There are five notes of reflection that can be examined by looking at the entire line of argument from the development of this geo-economic discourse. First, geoeconomic studies emerge from the “long period of peace” that followed immediately after the Second World War. Second, geoeconomic studies appear to have replaced the“bad reputation” attached to geopolitical terms. Third, the emergence of critical geopolitical discourse has contributed to popularizing the framework of geoeconomic analysis. The four geoeconomic analysis frameworks are instrumental in line with the increasing competition between countries as a consequence of the actions that have been taken in relation to global liberalization. Fifth, the framework of geoeconomic analysis does not replace geopolitics, but instead puts more weight 6

Friedrich-Ebert-Stiftung Indonesia- 2020 on the economic dimension rather than the dimension of the armed-military race. Against this backdrop, the COVID-19 pandemic has presented its own challenges in the framework of geoeconomic analysis. It is almost indisputable that the COVID-19 pandemic has brought shocks to the global market. An important question, for example, is whether the global market shocks will bring about changes in competition between China and the United States. The answer to this question is of course problematic. Answers to that question will largely depend on how long will the COVID-19 pandemic last. Will it last in the short term or in the long term? Which countries have been most affected? The main difficulty is that the COVID-19 pandemic has made medium and longterm strategic perspectives extremely difficult. Almost all governments are forced to think in a very short term due to the very short incubation period of the corona virus, which is only around 10 to 14 days. As long as the vaccine has not been found, there is no highly effective way to overcome it other than by putting limit on human interactions globally. In other words, the COVID-19 pandemic has given birth to what the authors call a “globalization pause” until the discovery of a vaccine. Some pundits did say that a shift would take place, but others said there a substantial shift would not be happening. See for example the piece of writing by Nicholas Crawford(2020) from IISS. According to him, China does not yet appear to have the ability to offer alternatives as a source of liquidity support for developing countries that are undergoing economic difficulties as a result of the COVID-19 pandemic. Most of these developing countries turn out to still rely on liquidity support from financial institutions from the legacy of the Bretton Woods agreement, such as the IMF and the World Bank. Rival institutions that have been pioneered by China, such as the Asian Investment Infrastructure Bank (AIIB), have not been able to become an alternative to the IMF and the World Bank. In fact, the AIIB, which was set up to provide project funding assistance rather than liquidity assistance to support government budget, has turned out to have constrained the AIIB’s strategic capacity. Taking into account facts like this, Crawford states that precisely with the COVID-19 pandemic an opportunity has come up to strengthen multilateral cooperation that has existed since Bretton Woods. In contrast to Crawford, an observer from CSIS, Michael J. Green(2020) states that it is too early to project that China will become a hegemonic country after the COVID-19 pandemic. Although China has reportedly been more successful in managing the economic impact of the COVID-19 pandemic compared to other countries, Green states that many other factors must be put into consideration in predicting whether China will emerge as a hegemonic power in the future. These factors include, for example, decisions made by leaders of other countries, as 7

The Geo-economy of the Pandemic: Indonesia’s Respond well as those related to the ability to find a vaccine. According to Green, what we can imagine is to build several scenarios that might emerge in the future after the COVID-19 pandemic. First, the scenario of increased strategic competition between the US and China, while the intermediate countries are not said to have undertaken a major re-orientation. Second, the scenario of reviving the leadership of the United States and strengthening multilateral institutions, in which the US reaffirms its support for allied countries and strengthens existing multilateral cooperation. Third, is the Pax-Sinica scenario in which China as one of the actors has become a revisionist, albeit limited in Asia, while Russia as a hegemony will dominate Eastern Europe and the Gulf region. Slightly different from the two analysts above, Mohammed Cherkaoui from the AlJazeera Center for Studies(2020) mentions that the corona virus has had a serious impact at the level of ideas. According to Cherkaoui, the COVID-19 pandemic is not simply a matter of possible changes in the geopolitical map of the world, but what is equally important is the pandemic that is posing a threat to the sustainability of the idea of neoliberalism. In his opinion, relations between countries that were built under the framework of Westphalia and have now had a neoliberal orientation, have not prepared a deterrence strategy against the corona attack. The existing institutional framework only provides a framework for deterring the possibility of armed conflicts. Such disagreement in the framework of an analysis is something that is easy to understand, given the shocks that the COVID-19 pandemic has brought in the economic sphere. Starting from supply shock, demand shock, and possibly even financial shock. International financial institutions such as the IMF and World Bank as well as the Asian Development Bank have revised their reports three times this year alone. From these reports we can see that the economic impact on each country is different. The ability of each country to contain the spread of COVID-19 also varies widely. Most of those reports also raise concerns about the possible geopolitical impact of the COVID-19 pandemic. So far, there have been no surprises that have led to political shocks, such as the absence of regime change through abnormal political processes, at the national, regional, and international levels. Each government, both individually-nationally, collectivelyregionally and through the international regime, is trying to adapt and make adjustments to the effects brought about by COVID-19. Beyond the framework of state actors, a report from UNCTAD(2020) states that the COVID-19 pandemic is likely to have an impact on the existing global value chain (GVC) pattern. At least there have been four variations of the GVC that can be identified until now. First, the value chain that emphasizes regionalization, such as extractive industries and agriculturebased industries. Second, the value chain that emphasizes diversification, which 8

Friedrich-Ebert-Stiftung Indonesia- 2020 is mainly found in low and medium technology industries such as the textile industry, as well as in the financial and business services industry. Third, the value chain that emphasizes reshoring, mostly in high technology industries such as automotive, machinery and equipment, electronics as well as wholesale and retail trading, and logistics and transportation. Fourth, the value chain that emphasizes replication, especially in areas that are hubs and spokes such as the pharmaceutical industry. Regardless of the pattern that emerges, the COVID-19 pandemic is said to be likely to create an increasingly shorter value chain. The following text seeks to look at Indonesia’s capability in dealing with the COVID-19 pandemic from a domestic policy perspective, and to take advantage of opportunities for international cooperation based on a geo-economic framework. For the first time since the 1998 crisis, Indonesia is experiencing a technical recession due to the COVID-19 pandemic even though such economic impact was not solely felt by Indonesia alone. In responding to the direct economic impact of the pandemic and the indirect impact as the consequences of social restriction policies, the government has yet to produce a clear and targeted long-term strategy and policy design. So far, various mechanisms to finance economic recovery are still well managed and credible. The main problem that still needs to be seriously paid attention to lies in the effectiveness of the implementation of the policies of providing stimulus in handling the pandemic, considering the increased workload on the government as an institution in an extremely uncertain condition. On the other hand, the flexibility of the pandemic policies has made the impacts of the shock to the economic sector neither too significant nor longlasting. Geoeconomically, Indonesia is taking advantage of its bilateral and multilateral cooperation to build financing capabilities, explore potential investment from corporations that wish to relocate their production from China, and taking advantage of the opportunities for vaccine development cooperation. Among other things, this is marked by fiscal and monetary cooperation with the United States, Germany and Australia, as well as loan assistance mechanisms from international financial institutions such as the World Bank and the Asian Development Bank. Several foreign investment commitments originating from Japan, South Korea, and the United States have been made due to the increasing trend of moving production centers away from China, and the existence of attractive production facilities for investors in the Batang Integrated Industrial Zone. Meanwhile, vaccine development is pursued through cooperation between the state-owned company Bio Farma and the private sector with several partners, namely with China and South Korea, in addition to the option of importing vaccines from countries that are already ahead in producing or testing the vaccines. 9

The Geo-economy of the Pandemic: Indonesia’s Respond 2. Indonesia’s Pandemic Response Policy So Far The outbreak of SARS-CoV-2 virus has so far been a global catastrophe that has triggered a health hazard in a very short time. States have been compelled to safeguard their citizens’ health, while at the same time safeguarding the economic-business activities in the short, medium and long term. The obligation to save public health situation has collided with the interests of maintaining the smooth mobility of goods and services at regional and international levels. As a consequence, the implementation of policies in managing the pandemic, both in developed, medium developed and developing countries, is reaffirming the character of geo-economic competition. Economists and academics from various multilateral institutions have projected that the impact of the pandemic and the policies made to deal with it have the potential to trigger twin shocks on both the demand and supply sides simultaneously. Harvard University Professor Kenneth Rogoff(2020) explained that the fundamental difference between the COVID-19 pandemic and the Spanish Flu pandemic that occurred in 1918 was the debate over the policy of lockdown that had not been raised during the latter, given the much lower living standards and purchasing power compared to they are now. According to him, at that time debates with regards to regional restrictions and quarantine did not dominate policy-making processes, because the majority of the people were still willing to face the risk of contracting diseases in their work and daily activities rather than having no money or dying of starvation. So, at that time, the pandemic was positioned as a health problem. In contrast to the context, the current demand for regional quarantine is considered to be an integral part in solving public health problems. Of course, the cost is very high as it is maintained to sustain the supply and demand structure so as to survive until the pandemic is overcome. A study by Veronica Guerrieri et al(2020) at the National Bureau of Economic Research (NBER) uses an economic model to track the potential for a recession caused by a decrease in demand(demand-deficient recession), as a result of disruption in all business sectors which results in disruption of supply in almost all business sectors. As a consequence, economicbusiness activities will shrink and workers’ consumption and household aggregates will also be negatively affected. In responding to the existing risks, multilateral institutions provide recommendations that intervention in the form of fiscal stimulus is very important for the survival of vulnerable communities in periods of social restriction and handling of a pandemic. Financial institutions such as the World Bank and the International Monetary Fund(IMF) emphasize the importance of prioritizing socio-economic assistance to vulnerable groups, by providing loan facilities for policies to deal 10

Friedrich-Ebert-Stiftung Indonesia- 2020 with COVID-19 in countries in need. Overall, developing countries have increased their debt amounting to US$ 124 billion in the first semester of 2020. This amount may not be sufficient considering that the pandemic will not be fully controlled at least until 2022 according to the WHO. Not all pandemic management policies face problems in terms of financing or implementation, as has been proven by China. Having previously dealt with the 2002-2003 SARS outbreak, the Chinese government has had the experience in preparing public health policies, strict quarantine protocols, and public health facilities in handling the COVID-19 outbreak. A centralized leadership system also has advantages, for example, restrictions on mobilization can be stopped and regulated in an orderly manner to separate affected areas. Issues of financing do not hinder policy execution, due to consistent investment in infrastructure to support policies in the public health sector after the SARS outbreak. Apart from budget readiness, training for medical personnel and an integrated outbreak monitoring system also contribute to increasing the government’s capacity to act. Thus, when the pandemic occurs, logistical pressures that remain to have to be fought for in planning and adjusting the state budget will no longer be a problem. Unlike China’s experience, in Indonesia’s case, the government has had limited funding to protect the physical and material survival of its people. Compared to China, Indonesia does not have the optimum capacity to handle a pandemic outbreak. In terms of providing health services, the WHO report calculates that the bed capacity in Indonesian hospitals is only 6 units per 10,000 of the population, while the ratio of health workers(including doctors, nurses, and midwives) is only 9.5 people per 10,000 of the population. The unpreparedness of these medical facilities will be even more worrying when compared to their geographic distribution. On the issues of state financing, in order to help and protect the affected people as suggested by the multilateral institutions, a large amount of fiscal allocation is needed. When designing stimuli for affected groups, the Indonesian government was aware of the fiscal limitations of the provisions of the State Finance Law, as well as structural constraints in tax ratios that are lower than the average for Asia Pacific countries. Therefore, the initial policy priorities focused on budget reallocation of ministries and institutions, as well as the issuance of Government Regulation in Lieu of Law(Perppu) No.1 of 2020 concerning State Financial Policy and Financial System Stability for Handling the 2019 Corona Virus Disease(COVID-19) Pandemic and / or in the context of Facing Threats that Endanger the National Economy and/ or Financial System Stability to accommodate the rapid easing of the limit on state borrowing. A regulation in the form of a Perppu allows for a temporary easing of the budget deficit threshold of above 3% 11

The Geo-economy of the Pandemic: Indonesia’s Respond until 2022, which was previously regulated through Law Number 17 of 2003 concerning State Finances. The Perppu, which was later ratified as Law Number 2 of 2020, also regulates the provisions for the purchase of government bonds on the primary market by Bank Indonesia. The Ministry of Finance as the fiscal authority has taken several financing mechanisms as an alternative, such as issuing debt securities, formulating burden sharing with the central bank, and increasing bilateral and multilateral loans. In April, the government obtained US$4.3 billion or IDR68.6 trillion from the issuance of three types of global bonds with tenors of 10.5 years, 30.5 years and 50 years. The government also issued the samurai bonds in July denominated in yen, with five maturity periods. With the agreement to share interest expenses in financing economic recovery, Bank Indonesia has also contributed IDR380.74 trillion, consisting of purchases of government securities(SBN) on the primary market of IDR 60.18 trillion, funding of public goods interest rates of IDR 229.68 trillion, and funding for interest on non-public goods or MSMEs of IDR 90.88 trillion. Chart 1 Pandemic Management Timeline and Official Government Visits 12

Friedrich-Ebert-Stiftung Indonesia- 2020 The first chart shows that the Indonesian government has allocated a budget of IDR695.2 trillion or US$49 billion for the National Economic Recovery Program(PEN) as of May 2020. Based on a study of fiscal costs compared GDP conducted by Albert Cavallo and a team from Harvard Business School(2020), the total PEN budget is already bigger than that of the developing country average. The amount of PEN funding with a percentage of 4.05% of GDP has exceeded the average budget for pandemic management programs in developing countries, which is around 3.64%. On the financing side, the government has put serious and credible pandemic management on top of its priority. Based on monitoring, the total realization of PEN has only reached 49.54%(IDR344.42 trillion from the total of Rp695.20 trillion) as of October 14, where the largest absorption was in the components of social protection programs(81.94%), and MSMEs (74.38%). Thus, improvement in budget realization is required for programs under the corporate financing allocation ceiling that are still awaiting regulatory approval (0%), business incentives(24.61%), sectoral and local governments(26.4%), and health (31.77%). 3. The Domestic Impact of the Pandemic The economic impact of COVID-19 is relatively more massive compared to those of other crises that have been experienced by Indonesia before, due to the shock effect that has not only affected the supply side, but also the demand side. Indonesia experienced the first technical recession since the Asian financial crisis in 1997-1998. As a result, economic recovery cannot be expected to have effects in a short time. Some analyzes suggest that economic growth rates will return to pre-COVID-19 levels once a vaccine has been found and distributed. The director of research of the Center of Reform on Economics(CORE) Piter Abdullah predicts that Indonesia’s economic recovery will take three to six months since the vaccine is ready for distribution(Habibah, 2020). At least these ideal conditions require that 70% of the population is injected with the vaccines in order to be effective both to protect the health of the population and to restore the economy. Economic recovery in Indonesia has begun to take place based on data from the Central Statistics Agency(BPS) that shows an economic growth of 5.05% occurring in the third quarter compared to the previous quarter(BPS, 2020b). This is also marked by the increase in various other macroeconomic indicators in the same period, such as consumption and investment components as the largest components of Gross Domestic Product (GDP), which grew by 4.7% and 8.45% respectively compared to the previous quarter. The significant increase in government spending of 9.76% in the third quarter on an annual basis and 16.93% on a quarterly basis is also a cushion for economic growth considering that all social assistance from the National Economic 13

The Geo-economy of the Pandemic: Indonesia’s Respond Recovery(PEN) is budgeted through Ministerial/ Institutional spending. In addition, an increase in the Purchasing Managers’ Index(PMI) from 27.5 in April to 47.8 in October was also a sign of economic recovery(IHS Markit, 2020). Finance Minister Sri Mulyani said that the lowest point of economic contraction due to COVID-19 had occurred in the recent second quarter(Sembiring, 2020). Based on the data on the second quarter economic growth, transportation and warehousing sectors experienced the worst contraction by-29.2% quarterly or -30.84% ​o​ n an annual basis(BPS, 2020a). The main cause of the decline was the Large-Scale Social Restriction(PSBB) policy that was implemented at the beginning of the pandemic management. The impact of this policy is also reflected in the decline in accommodation and food and beverage sectors by-22.31% quarterly or-22.02% annually. Cumulatively, the economic downturn in the second quarter was more influenced by the decline in the three sectors, which also had the largest contribution to GDP, namely the industrial, trade and construction sectors, each of which fell by more than minus 5% both quarterly and annually. Amidst the decline in economic performance, there are still various business sectors that are experiencing annual growth, including agriculture, information and communication (infocom), health services, education, real estate, and water supply(BPS, 2020b). Among these sectors, agriculture has the largest share of the contribution to GDP, so even though the growth was not very significat, it was still able to support a more severe economic downturn. This increase is influenced by the cycle of the harvest season so that the peak annual growth always occurs in the second quarter, which leads to a significant increase in quarterly growth due to the pattern of decline that always occurs in the first quarter. Another cause is the increase in foreign demand for processed palm oil commodities. Increased demand from abroad was also detected for cocoa, rubber, cloves, and tobacco. These phenomena are alleged to have occurred as a result of the lockdown policy implemented by foreign governments. Meanwhile, the infocom and health services sectors are experiencing rapid growth thanks to the Large-Scale Social Restrictions(PSBB) policy, which requires people to do long-distance activities and maintain protective health measures with regard to the pandemic. The level of welfare in Indonesia has decreased due to the COVID-19 pandemic. Based on BPS data(2020b dan 2020c), open unemployment rate in Indonesia as of August 2020 increased to 7.07% or the same as the condition of Indonesia’s employment nine years ago. The COVID-19 pandemic has seen the number of unemployed people increase by 2.67 million. Meanwhile, the impact of the COVID-19 pandemic on Indonesia’s poverty level has yet to be seen because official data will only be released in January 2021. The worst simulation results conducted by Suryahadi et al(2020), show 14

Friedrich-Ebert-Stiftung Indonesia- 2020 that poverty rate in 2020 will reach 12.4%, or an increase from 9.2% in September 2019. In other words, Indonesia will have 8.5 million new poor due to this pandemic. One of the geo-economic impacts of the COVID-19 pandemic is the emergence of new economic powers. By looking at economic growth data from countries in ASEAN since the pandemic broke out, Vietnam is the only economy that has survived the technical recession(BPS, 2020b). It can even be said to be better than China because Vietnam’s economy did not experience a contraction at all. However, the credibility of the published data should be put into consideration given the quite different government regime compared to the other countries in the region. Even so, the Vietnamese economy, which began to be engaged in the global supply chain, was relatively successful in taking advantage of the momentum of massive factory relocation from China. Nonetheless, the COVID-19 pandemic is not the only reason behind the relocation, it is instead the climax point of the relocation momentum for the relocation that has actually started to be considered since the ongoing trade war between China and the United States, which has continued until now. In anticipating a wave of factory relocation, the Indonesian government has been relatively late compared to Vietnam. Indonesia is just starting to prepare a special industrial zone in Batang area, which is just entering the infrastructure development stage (Sebayang, 2020). Meanwhile, Vietnam’s infrastructure is relatively more ready to receive incoming investment, making it more attractive to investors wishing to relocate. The government considers that one of the main obstacles to realizing investment in Indonesia is the different bureaucratic problems between the central and local government levels (Puspita, 2020). Indonesia as a democracy with the principle of regional autonomy often confuses investors, both in the process of obtaining permits and for business expansion. This is also one of the reasons for the ratification of the Law on Job Creation Law(UU Ciptaker) or better known as the Omnibus Law on Job Creation. The Omnibus Law is a keyword in describing the second term of President Joko Widodo’s government, because the scope of the changes is broader than just labor regulations. Based on the design of the Priority National Legislation Program (Prolegnas) in 2021, another Omnibus Law will be processed, namely on reforms to develop and strengthen the financial sector(Sihombing, 2020). Previously, the government had also submitted an Omnibus Law regarding taxation. The Omnibus Law initiative seems to have received positive responses from the business world, especially investors. This is illustrated in the anomaly in which the Composite Stock Price Index(IHSG) that has actually increased during the protests that were staged against the Omnibus Law on Job Creation in October(Faruq, 2020). One of the obstacles came from the 15

The Geo-economy of the Pandemic: Indonesia’s Respond very democratic governance model itself: regional autonomy(Batang Region), a rigid labor market(Omnibus Law protest). However, achievements are still there with coordination between central and local governments. Evidence of investors welcoming the Omnibus Law on Job Creation is the positive movement of the JCI amid the protests. 4. Cooperation in the Development of Context of Pandemic and Trade a. Regional and Multilateral Globally, it can be understood that the processes in relation to the pandemic have led countries to respond with inward-looking policies by prioritizing the survival of their own domestic communities, and rethinking the priorities of cooperation between countries. Potentials for trade tensions could be triggered by the imposition of export bans for several categories of staple goods, because it safeguards the availability of basic domestic needs, such as rice and the needs for masks, medicines, vaccines and other medical devices. At regional level, Southeast Asian countries have ASEAN that contributes to coordinating pandemic management policies, and prepares the finalization of the Regional Comprehensive Economic Partnership (RCEP) agreement. In general, ASEAN has had an institutional ASEAN Coordinating Center for Humanitarian Assistance on Disaster Management(AHA Center) and the ASEAN Disaster Management and Emergency Relief(ADMER) Fund scheme of which the amount of portion is non-mandatory portion and it is open to parties outside the member countries, such as Japan, New Zealand, United States and the European Union. However, this mechanism has not been used in handling the pandemic. In April 2020, at the foreign ministerial level meeting, the proposal for the establishment of the ASEAN COVID-19 Response Fund was approved(Septiari, 2020b). This proposal was submitted by Thailand and Vietnam, which estimated that the contribution amount in the response fund would reach US$ 10 billion. This amount is calculated from 10% each of the allocation of the ASEAN Development Fund and the Cooperation Fund with ASEAN+ 3 partners, namely China, Japan and South Korea. The purpose of the response fund is to be reallocated to ensure that the needs for medical equipment and necessities of the member countries are met. During its development, there has been no clear mapping on the amount of contribution of ASEAN+ 3 partner countries and the absorption of the funds allocated by member countries. When compared at a glance with the European Union’s policy in coping with the pandemic, which is through a stimulus of US$ 2 trillion or€ 1.8 trillion, of course the amount of the COVID-19 ASEAN Response 16

Fund is indeed much smaller(Dendrinou, 2020). However, the scale and type of regional integration in Europe with its supranational institutions is more complex and very different from ASEAN integration, which still respects the boundaries of state sovereignty and emphasizes consensus as dictated by the philosophy of the ASEAN Way. Nevertheless, ASEAN also has the Chiang Mai Initiative Multilateralization (CMIM) mechanism as an alternative to finance the threat of financial crisis using the currency exchange facility among the ASEAN+ 3 countries. However, no party has utilized the facility due to the availability of the Foreign International Monetary Authorities(FIMA) provided by the Federal Reserve, and the Flexible Credit Line(FCL) from the IMF, which can be utilized by several CMIM member countries(Negus, 2020). Friedrich-Ebert-Stiftung Indonesia- 2020 Based on the agenda, the meetings held by ASEAN are still consultative and normative in formulating cooperation to overcome the impact of the pandemic. The first meeting held on 3 February 2020 at the senior official meeting with ASEAN + 3 partners had already started discussing developments in the COVID-19 case. However, it was only after March 31 that meetings began to be carried to deal with the pandemic as an emergency problem in the health sector, with member countries and partner countries outside ASEAN+ 3 such as the United States, Russia, Australia and the United Kingdom. In total, there have been 27 meetings in ASEAN that have specifically discussed COVID-19, including two ASEAN Special Summit sessions specifically for ASEAN member countries and ASEAN+ 3 partner countries(ASEAN, 2020). Chart 2- Comparison between CPTPP and RCEP Signatory Countries 17

The Geo-economy of the Pandemic: Indonesia’s Respond Within the Indo-Pacific region itself, two major trading blocs have finally been inaugurated in the last two years. First, the Comprehensive and Progressive Trans-Pacific Partnership(CPTPP), which was formulated through the Asia-Pacific Economic Cooperation(APEC) forums, led by developed countries such as Japan, Australia, New Zealand, Canada and Singapore. Second, the Regional Comprehensive Economic Partnership (RCEP), which was initiated by ASEAN member countries and supported by China, and was only signed on November 15, 2020. In addition to the countries participating in the two blocs of trade agreement as described in Chart 2, there are several countries that have expressed a desire to join forces that need to be observed in the future. The United States under the leadership of President Joe Biden is likely to rejoin the CPTPP, or, Indonesia and China have expressed interest in signing the CPTPP in 2018 and 2020. The context of competition in the trade war between the United States and China seems to still underlie the membership of the two major trade agreements in the region, although in the future the pattern of cooperation can be more flexible as the regime changes and the United States returns to the RCEP. Table 1 List of Loans from International Institutions No. Institution Amount 1. Asian Development Bank US$ 1.500.000.000 2. World Bank US$ 250.000.000 3. Asian Infrastructure Investment Bank Japan International Cooperation Agency& Asian 4. Development Bank 5. Australia& Asian Development Bank US$ 1.000.000.000 JPY 50.000.000.000 US$ 1.000.000.000 6. Kreditanstalt für Wiederaufbau& Asian Development Bank€ 550.000.000 Particularly in the context of funding assistance in coping with pandemics, several regional and multilateral institutions outside ASEAN have also been providing assistance for Indonesia. From external parties, through the COVID-19 Active Response and Expenditure Support (CARES) program, the Asian Development Bank(ADB) has provided a loan of US$ 1.5 billion to cope with the pandemic in Indonesia. Meanwhile, the World Bank has also committed to lend US$ 250 million. 18

Friedrich-Ebert-Stiftung Indonesia- 2020 The Asian Infrastructure Investment Bank(AIIB), which is owned by China, has approved a loan of US$ 1 billion. The amount of funds does not include bilateral swap facilities and repo line facilities owned by Bank Indonesia and several other central bank networks such as the United States Federal Reserve. The amount of funding assistance is useful to maximize the space for easing, which was passed thanks to the Perppu no. 1 or Law no. 2 of 2020. b. Bilateral Cooperation When compared with the context of the trade war until early 2020, Indonesia at that time tended to be more passive. Based on its development and investment interests, Indonesia has been trying to balance its position so as not to be too inclined towards China or the United States. With these efforts, the strategy pursued by Indonesia, for example, has been to direct foreign investment from China and the US to different projects. Meanwhile, in responding to COVID-19, Indonesia is playing an active role in securing the supply of health needs, including vaccine development. At the same time, it also continues to pick up potential investment in its main partner countries, namely China, South Korea, Japan, the United States and Australia. As the country that recorded the first pandemic case, China has been trying to carry out health diplomacy to various countries, such as Italy and Indonesia, as a demonstration of accountability efforts. Negative sentiment at the global level has been influenced by the words of the United States President Donald Trump who was saying that COVID-19 was a virus that was owned and originated from residents in China(Chinese virus). Then, the Chinese government sent a team of doctors who handled the COVID-19 virus in Wuhan to Italy and medical equipment, such as personal protective equipment(PPE), given that in the first quarter of 2020 Italy was severely affected by the pandemic. In addition, China was also noted to have provided PPE equipment for the Netherlands and Spain. The PPE equipment provided also came from donations from large Chinese corporations such as Huawei and other informational companies. Albeit the interest of donations from China has been pointed out as an entry point to enter the domestic market related to information and technology(Lequesne and Wang, 2020). In helping Indonesia, China has sent medical supplies and PPE since last March. On March 23, 2020, Defense Minister Prabowo Subianto received donation in the form of 8 tons of medical supplies and equipment from non-governmental organizations in China. The second wave of supplies arrived on May 12, 2020, and was also received by the Minister of Defense. On the same day, a virtual meeting was also held between health experts with military backgrounds from China and Indonesia(Yeremia, 2020). Meanwhile, cooperation in relation to vaccine development in the two countries began in May 2020 at the initiative of Bio Farma, which then partnered with Sinovac, 19

The Geo-economy of the Pandemic: Indonesia’s Respond a state-owned company. Tests have been carried out, and if the third phase of the tests is complete by the end of 2020, it is projected that in the first quarter of 2021 a vaccine can be produced. As illustrated in Chart 1, the visit by Foreign Minister Retno Marsudi and Minister of State-Owned Enterprises Erick Thohir to China was also aimed at exploring vaccine development, not only with Sinovac, but also with Cansino and Sinopharm. Nonetheless, the dosage calculation remains uncertain and there has been no progress regarding successful testing and logistics readiness with regard to the vaccines. Apart from teaming up with China, with South Korea, the Indonesian company Kalbe Farma is also collaborating with Genexine in vaccine development. In this case, Korea has not provided Indonesia either with funding or financing facilities. The majority of cooperation between the two is driven by industrial relocation efforts as well as investment. Head of the Investment Coordinating Board, Bahlil Lahadalia, said several South Korean companies had expressed their commitment to invest in a factory in the Batang Integrated Industrial Zone(KIT) that was recently inaugurated. Hyundai Group is one of the parties involved(Isna, 2020). With Japan, in the meantime, Indonesia has the opportunity to become the second country visited by Japanese Prime Minister Yoshihide Suga in his first overseas visit after taking office last October. After visiting Vietnam, the Japanese Prime Minister approved a loan of JPY50 billion or US$ 473.1 million or IDR6.95 trillion with low interest rates for handling the pandemic in Indonesia. Through ADB and JICA, Japan has also lent JPY50 billion with a loan period of 15 years and a grace period of 4 years. In the context of industrial relocation, such as the case with South Korean companies, the bilateral meeting with the Japanese PM also discussed the commitment of Japanese companies to relocate their factories from China, namely PT Sagami Indonesia, PT Kenda Rubber Indonesia, and PT Panasonic Manufacturing Indonesia, and Denso (Asmara, 2020). The Indonesian government also undertakes bilateral cooperation with the United States, both through government and monetary policies. The latest intergovernmental cooperation was marked by the signing of a memorandum of understanding regarding infrastructure and trade funding of US$ 750 million and an extension of the Generalized System of Preference(GSP) facility(Malik, 2020). Another collaboration that needs attention is the involvement of the United States through the International Development Finance Corporation(IDFC) in the formation of the Indonesian Sovereign Wealth Fund or the Indonesian Endowment Fund(LPI) (Sandi, 2020). On the other hand, Bank Indonesia has also entered into monetary cooperation with the central bank of the United States, the US Federal Reserve, through a repurchase agreement line(repo line) facility amounted to US$ 60 billion in April this year(Bank Indonesia, 2020). Cooperation within the private sector will also continue during the pandemic, 20

Friedrich-Ebert-Stiftung Indonesia- 2020 especially in the capital sector for startups. The pandemic has not prevented big companies from the United States such as Google, Microsoft, and Facebook from injecting fresh funds to unicorns from Indonesia such as Tokopedia, Bukalapak, and Gojek(Roy, 2020). Also, funding has not only been provided for unicorn startups, but also for other startups such as Kredivo, a financial technology company, which received fresh funds of US$ 100 million from Victory Park Capital Advisors, LLC. (Investing, 2020). The Indonesian government has also carried out other bilateral cooperation in order to deal with the COVID-19 pandemic. During November 2020, the government has received at least two countries’ loans, namely Australia and Germany. The loan from Australia, which supports the CARES program from ADB amounting to AU$ 1.5 billion or the equivalent of US$ 1 billion will be used by the Indonesian government to finance health care and national economic recovery(Fauzia, 2020a). Furthermore, in less than one week after that, the Indonesian government again announced a loan from Germany, which was also included in the CARES program from ADB amounting to 550 million euros, or the equivalent of IDR 9.1 trillion from the German Development Bank, the Kreditanstalt für Wiederaufbau (KfW), which was intended for supporting the expansion of teaching hospitals in Makassar and Malang, as well as assisting the provision of medical equipment and economic recovery including targeted assistance for vulnerable groups(Maulana, 2020). 5. A number of Achievements and Future Tasks a. Notes on Achievements In coping with the economic impact of the pandemic, the Indonesian government has succeeded in demonstrating strong political consolidation through the issuance of Perppu No.1/ 2020. This regulatory framework is the foundation of all economic stimulus policies. For example, fiscal management policies will no longer have to, at least until 2022, refer to international norms such as the Maastricht and Washington Consensus where a good budget deficit must be below 3% of GDP. On the monetary side, Bank Indonesia as the central bank has also undergone functional adjustments. Through the ratification of the Perppu, Bank Indonesia is no longer the lender of last resort, but has turned into the buyer of last resort to purchase governmentissued debt securities. Meanwhile, the role of the lender of last resort was added as one of the functions of the Deposit Insurance Corporation(LPS) for banks experiencing liquidity problems. In financing the various economic stimuli, the Indonesian government has also succeeded in managing debt quite well. In general, government debt has increased significantly, which is reflected in the increase in the debt-to-GDP ratio reaching 37.84% as of October 2020(Kementrian Keuangan, 2019 and 2020), or an increase from 29.87% in October 2019. Policy 21

The Geo-economy of the Pandemic: Indonesia’s Respond innovations in debt financing have also been carried out, including issuing international bonds(global bond) denominated in US dollars with a tenor of 50 years and debt conversion to international institutions (Fauzia, 2020b and Ramadhani, 2020). This bond tenor is the longest in Indonesia’s history with the aim of suppressing low and stable yields. Issuances denominated in US dollars are also carried out taking into account the pattern of bond buying in the domestic market, which generally prefers shorter tenors. The government has also converted its debts to the Asian Development Bank(ADB) to get a cheaper exchange rate. Good debt management is also demonstrated in the yield of around 6% in November, which is lower than it was the beginning of 2020(World Government Bonds, 2020). In addition, attempts to take up the opportunities for business relocation from China have increased investors’ confidence, which have led them to consider the Batang Integrated Industrial Zone as a potential production location. Another success gained the Indonesian government is the cooperation in vaccine development with China and the UK. Although the cooperation has only been established in the third testing stage of development, the government has at least secured vaccine stocks for health workers. The next issue that needs attention is the issue concerning the effectiveness of the vaccine and how distribution can be carried out given Indonesia’s demographic and geographic conditions. b. Notes on Poor Performances Overall the government policies during the pandemic have been reactive and sporadic by nature, or even raised questions with regard to the reliability of its scientific studies in the field of public health sciences. Issues that have been strongly criticized by the public include the inadequate political communication between the national and local governments regarding regulations on social restrictions between the national and local governments, the government giving false promises regarding the deadline of the completion of COVID-19 or the accumulation of combined employees’ leave at the end of the year, and the formulation of the team assigned to handle of a pandemic that has focused very much on issues of the economy rather health. In addition, the endorsement of the Omnibus Law on Job Creation and other laws, which was considered by the public to be too hastily done during a pandemic, has also contributed in eroding public trust in the government’s consistency in dealing with the pandemic. To overcome these problems, the government is hoping that vaccines will become the ultimate weapon, even though the acceleration of vaccines provision has caused new confusion among the people. 22

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Friedrich-Ebert-Stiftung Indonesia- 2020 List of Abbreviation ADB ADMER AHA Centre AIIB APD/ PPE APEC ASEAN BI BPS BUMN CARES CMIM Asian Development Bank / Bank Pembangunan Asia ASEAN Disaster Management and Emergency Relief/ Pengelolaan Bencana dan Bantuan Kedaruratan ASEAN ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management/ Pusat Koordinasi Bantuan Kemanusiaan dan Penanganan Bencana ASEAN Asian Investment Infrastructure Bank / Bank Infrastruktur Investasi Asia Alat Pelindung Diri/ Personal Protection Equipment Asia-Pacific Economic Cooperation(APEC) / Kerjasama Ekonomi AsiaPasifik Association of Southeast Asian Nations / Persatuan Bangsa-bangsa Asia Tenggara Bank Indonesia/ Central Bank of Indonesia Badan Pusat Statistik/ Central Bureau of Statistics Badan Usaha Milik Negara/ State-Owned Enterprises COVID-19 Active Response and Expenditure Support / Tanggap Aktif dan Dukungan Pengeluaran untuk COVID-19 Chiang Mai Initiative Multilateralization / Chiang Mai Inisiatif Multilateralisasi 27

The Geo-economy of the Pandemic: Indonesia’s Respond CORE Center of Reform on Economics / Pusat Reformasi Ekonomi COVID-19 Coronavirus Disease 2019 / Penyakit Virus Korona 2019 CPTPP Comprehensive and Progressive Trans-Pacific Partnership / Kemitraan Trans-Pasifik yang Komprehensif dan Progresif CSIS Centre for Strategic and International Studies – Pusat Studi Internasional dan Strategis FCL Flexible Credit Line / Batas Kredit Fleksibel FIMA Foreign and International Monetary Authorities / Otoritas Moneter Luar Negeri dan Internasional GSP Generalized System of Preference / Sistem Preferensi Umum GVC Global Value Chain / Rantai Nilai Global IDFC United States International Development Finance Corporation / Kerjasama Keuangan Pembangunan Internasional Amerika Serikat IHSG Indeks Harga Saham Gabungan/ Composite Stock Price Index IISS International Institute for Strategic Studies / Lembaga Kajian Strategis Internasional IMF International Monetary Fund / Dana Moneter Internasional Infokom Informasi dan Komunikasi/ Information and Communication JICA Japan International Cooperation Agency / Badan Kerjasama Internasional Jepang KfW Kreditanstalt für Wiederaufbau/ Lembaga Kredit Rekonstruksi KIT Kawasan Industri Terpadu/ Integrated Industrial Area LPI Lembaga Pengelola Investasi/ Investment Management Institution LPS Lembaga Penjamin Simpanan/ Indonesia Deposit Insurance Corporation PDB Produk Domestik Bruto/ Gross Domestic Product PEN Pemulihan Ekonomi Nasional/ National Economic Recovery Perppu Peraturan Pemerintah Pengganti Undang-Undang/ Government Regulation In Lieu of Law 28

PMI PP Prolegnas PSBB RCEP Repo Line SARS SARS-CoV-2 SBN SWF UEA UMKM UNCTAD UU UU Ciptaker WHO Friedrich-Ebert-Stiftung Indonesia- 2020 Purchasing Managers’ Index / Indeks Manajer Pembelian Peraturan Pemerintah/ Government Regulation Program Legislasi Nasional/ National Legislation Program Pembatasan Sosial Berskala Besar/ Large-Scale Social Restriction Regional Comprehensive Economic Partnership / Kemitraan Ekonomi Komprehensif Regional Repurchase Agreement Line/ Perjanjian Pembelian Kembali Severe Acute Respiratory Syndrome / Sindrom Pernapasan Akut Parah Severe Acute Respiratory Syndrome Coronavirus 2 / Sindrom Pernapasan Akut Parah-CoV-2 Surat Berharga Negara/ Government Bond Sovereign Wealth Fund / Dana Investasi Milik Negara Uni Emirat Arab/ United Arab Emirates Usaha Mikro, Kecil, dan Menengah/ Micro, Small, and Medium Enterprise United Nations Conference on Trade and Development / Konferensi PBB untuk Perdagangan dan Pembangunan Undang-Undang/ Law Undang-Undang Cipta Kerja/ Omnibus Law on Job Creation World Health Organization / Organisasi Kesehatan Dunia 29

The Geo-economy of the Pandemic: Indonesia’s Respond Profile of Writers Makmur Keliat S erves as an Independent Commissioner of PT. Pegadaian. Bachelor’s Degree in Corporate Economics from Universitas Pembangunan Nasional“Veteran”(1984). Bachelor of Art in Social and Political Sciences/ International Relations Department from Universitas Gadjah Mada(1984). Drs. in Social and Political Sciences/ International Relations Department from Universitas Gadjah Mada(1986). Ph.D in School of International Studies from Jawaharlal Nehru University(1995). Lecturer in the International Relations Department of Social and Political Science Faculty of Universitas Indonesia(1999- Present). Head of Graduate Program in the International Relations Department of Social and Political Science Faculty of Universitas Indonesia(2002-2004). Executive Director of Global Society Studies Center(PACIVIS UI) (2002- 2004). Executive Director of CEACoS(Center for East Asia Cooperation Studies) of FISIP UI(2005-2007). Research and Publication Manager of Social and Political Science Faculty of Universitas Indonesia(2007-2008). Head of Graduate Program in the International Relations Department of Social and Political Science Faculty of Universitas Indonesia(2009-2012). Special Staff of Cabinets Secretariat of the Republic of Indonesia(May to August 2015). Independent Commissioner of Bank Mandiri(2015-2020). Malinda Damayanti Completed her undergraduate degree in International Relations Department, Faculty of Social and Political Sciences Universitas Indonesia. Previously, she had worked as research assistant to Makmur Keliat Ph.D. in political economic research division at Kenta Institute, ASEAN Study Center(ASC) Faculty of Social and Political Sciences UI, and Pokja 8(Kelompok Kerja 8). Her research interests focused on Indonesia’s economic diplomacy, fiscal policy, and strategic infrastructure projects. Since April 2020, she is a researcher at Laboratorium Indonesia 2045(LAB 45). Reyhan Noor In pursuing his career as a researcher, Reyhan Noor completed his bachelor’s degree in 2017 at the Department of Management at the Faculty of Economics and Business, Universitas Indonesia. Before diving in political economy studies, Reyhan began his career as an intern at PricewaterhouseCoopers, where he involved in creating management blueprint for a government agency. His career in political economics research began when he was appointed as a research assistant to Makmur Keliat Ph.D. in 2017. He also has conducted research around Indonesia’s General Election during his time as a research assistant to Andi Widjajanto in 2019. Currently, he conducts extensive research on fiscal and monetary policies, also financial sectors related to political economy under the supervision of Makmur Keliat Ph.D. at Laboratorium Indonesia 2045(Lab 45). 30