Jakarta (VNA) – The Indonesian Government on May 11 released a regulation on aneconomic recovery programme worth 318 trillion Rp (21.28 billion USD) whichfocuses on capital injections for State-owned enterprises and loan subsidiesfor small businesses, among others.  

Under Government Regulation (PP) No. 23/2020 which took effect on May 11, the government will carry out efforts tosupport the recovery of the COVID-19 - battered economy.

Accordingto the Jakarta Post, over 152 trillion Rp will be allocated for SOEs, with 8.5trillion Rp for the national flag carrier Garuda Indonesia, 3 trillion Rp for steelmaker PT Krakatau Steeland 13 trillion rupiah for the State Logistics Agency (Bulog).

The funds for the SOEs willalso be channelled to state-owned oil giant Pertamina (48.25 trillion Rp) andelectricity company PLN (45.42 trillion Rp) in the form of acceleratedcompensation payments. 

The regulation also regulates that the government can place funds withcertain interest rates at domestic banks, which provide loan restructuring anddisburse additional loans to businesses to provide more liquidity to the banks,or make long-term investments in stocks, debt papers and/or direct investmentto gain economic, social and other kind of benefits. It is also allowed to givefinancial guarantees, both directly and indirectly, to businesses impacted bythe outbreak.

The government can also provide loan interest subsidies for micro, small and mediumenterprises (MSMEs) using state funds, according to the regulation. Around 34.15 trillion Rp will be set aside for this purpose./.