Chairman of the Indonesian Red Cross (PMI) Jusuf Kalla (JK) considered it would be good if the people affected by Covid-19 were given Direct Cash Assistance (BLT) in order to keep moving the economic wheels in the surrounding environment. So, is the distribution of BLT better than the provision of social assistance in the form of groceries in the middle of the Covid-19 pandemic?
Abra P. G. The Economist sees JK’s ideas from both positive and negative sides. On the positive side, the distribution of aid in the form of cash will effectively reduce the crowd because it is provided by sending it directly to the recipient’s account.
“Because people will not be piled up to receive food assistance unless it is sent directly to homes,” Abra said when contacted by reporters on Tuesday (5/19/2020) night.
Then the other positive side of the BLT distribution will move the wheels of the economy in their respective regions. The money received will automatically be used by the recipient to buy daily needs sold by MSME actors.
“Compared to the current pattern with the help of non-cash food, food, it is certain that the goods are dominated by cities, even from SOEs and only revolve in large companies,” he said.
“So that aspect of creating income distribution to MSME entrepreneurs in the regions, at least, can sustain the regional economy so that it does not fall severely,” he added.
Meanwhile, when viewed from the negative side, the distribution of BLT will also face challenges from data curation. Similar to the distribution of non-cash assistance, validation of recipient data used must be absolutely accurate which is constantly updated.
Then the distribution of BLT also has risks because there is no monitoring mechanism in the field. If non-cash disbursements can be monitored in practice in the field while BLT disbursements will be difficult to monitor because they go directly to the recipient’s account.
“If he can, he can come back again and the neighbors can monitor. If it is cash, it can’t,” he said.
To note, JK considered that the distribution of aid to the people affected by the corona virus pandemic was better given direct cash or BLT assistance. JK said from the money it could increase purchasing power so that the economy’s wheels for the community continued to run.
JK said, the problem at the moment is that people’s purchasing power is declining. Of course the impact is felt by traders.
The solution JK has revealed for this problem is to increase purchasing power. According to him, the assistance provided by the government can be in the form of cash, so that affected communities can also buy needed goods.
“If BLT, in the relevant region can live. Buy rice in the stalls there, maybe buy fish, buy what,” said JK in a University of Indonesia Webinar discussion, Tuesday (05/19/2020).