ABSTRACT
When the coronavirus disease (COVID-19) swept across the globe in 2020, Indonesia was not exempt from its impact. To soften the blow, the Indonesian government quickly mobilised its welfare system to act as a social safety net. The extensive breadth and coverage of the welfare programmes rolled out by the government in 2020 played a key role in mitigating Indonesia’s economic contraction to −2.07%, which is well below the global average of −3.5%. Despite the Indonesian social welfare system’s extensive role in providing a social safety net for the population, the response was not exactly smooth sailing. Two major issues that diminished the safety net’s efficacy were outdated social registry data that hampered beneficiary targeting and a highly bureaucratic system that posed a challenge in adjusting welfare programmes to respond to the crisis. Moreover, although deemed successful in minimising the impact of the crisis on the Indonesian economy, a strategy that relies on high spending on stimulus and aid when tax revenue is low is untenable in the long run. With the pandemic still not under control, the government needs to both reorient its recovery strategy and prevent lasting economic damage caused by the pandemic.
