The government has decided to hold off a stimulus for tourism and aviation sectors after it was announced that there were two confirmed cases of coronavirus in Indonesia, said the official today (03/03) - Photo by President Office

JAKARTA (TheInsiderStories) – The government has decided to hold off a stimulus for tourism and aviation sectors after it was announced that there were two confirmed cases of coronavirus in Indonesia, said the official today (03/03). The postponed, said tourism and creative economy minister, Wishnutama Kusubandio, would take place until the pneumonia-like illness is contained.

On Feb. 26, Indonesian government has established an incentive scheme for the tourism and aviation sector to overcome the impact of the coronavirus. As far, the epidemic has lowering the foreign tourists coming to the country.

According to the director general at the transportation ministry, Novie Riyanto, the government decided to give ticket fare subsidies up to 50 percent. The stimulus for full service airlines are given a 45 percent of discount, medium service 48 percent, and low cost airlines 50 percent. Its expecting these incentives will affect airline tickets.

“Additional discounts also gives from PT Pertamina, PT Angkasa Pura I, and PT Angkasa Pura II, making ticket discounts to consumers could reaches 40 percent,” he adds.

These incentives are delivered to 10 domestic tourism destinations. such as Batam, Denpasar, Yogyakarta, Labuan Bajo, Lombok, Malang, Manado, Silangit, Tanjung Pandan, and Tanjung Pinang.

Riyanto explained, this discount applies to 25 percent of seats, calculated from the total overall capacity per aircraft on each flight. The discounts will take place  from March to May 2020.

According to him, 30 percent of incentive came from the State Budget assistance. Then other incentives come from reducing aviation fuel costs and fees charged by airport managers such as Angkasa Pura (AP) I and II, as well as navigation services or PT Airnav.

In total, the incentives amounted to Rp910 billion (US$65.0 million), with details from the State Budget of Rp550 billion, from Pertamina through the reduction of aviation fuel costs of Rp260 billion and AP I, AP II and Airnav Rp100 billion, he concluded.

Indonesia rolled out a Rp10.3 trillion (US$735.71 million) stimulus package in an effort to cushion the blow of the coronavirus outbreak on its economy. The stimulus is channeled to a number of economic sectors affected by the virus and ensures that people’ purchasing power is maintained.

According to finance minister, Sri Mulyani Indrawati, the outbreak, an Indonesia’ top trade partner and a major source of investment and tourists, could further weaken Indonesia’ growth to 4.7 percent in 2020 from 5.02 percent in 2019.

While, deputy minister, Suahasil Nazara, added, this fiscal stimulus aims to ensure Indonesia’ economic growth does not come under pressure amid the prospects of a global economic slowdown. The stimulus in the tourism sector, for example, is expected to balance the potential for decline due to the significant reduction in the number of foreign tourists in this year.

The stimulus is in the form of discounted airline ticket prices for 10 major tourist destinations, incentives for airlines and travel agents that bring tourists, to the policy of hotel and restaurant tax-free schemes for a certain period in these 10 tourist destinations.

“So we hope that economic activity does not go down, the economy continues to spin like hotels can still operate, airlines can also continue to operate and so that we hope it can replace the potential for economic decline that impacted Indonesia,” he stated.

US$1: Rp14,000

Written by Staff Editor, Email: theinsiderstories@gmail.com