| Summary: | The COVID-19 pandemic has slowed regional economic growth of all 34 prov�inces in Indonesia. Indeed, the pandemic poses great challenges to all sectors and
governments at all levels.
Provinces that contracted economically by more than 5% in the last the three
quarters of 2020 are Riau islands, Special Capital City Region (Daerah Khusus
Ibukota or DKI) Jakarta, West Java, Central Java, Yogyakarta, East Java, Banten,
Bali, East Kalimantan, West Sulawesi, and West Papua. In the second quarter of
2020, in addition to Riau Islands, Bali, and East Kalimantan, all the provinces in
Java were severely affected by the pandemic. This large economic contraction in
Java was mainly due to the implementation of large-scale social restrictions and
lockdowns in the first half of 2020. As restrictions were eased and social assistance
distributed in some provinces, growth rates started to increase albeit at different
speeds (Figure 6.1).
Bali recorded the lowest growth at –11.06%, showed further drops in sub�sequent periods. The COVID-19 pandemic indeed devastated Bali’s main
industry – tourism. Foreign tourist visits dropped by 99.98% in November 2020
from the previous year, while the GDP shares of accommodation and service
industries fell from around 20% in 2019 to 15% in 2020. Unlike other industries
that can be effectively stimulated by national and local policies, the effects of a
pandemic on a tourism industry that relies heavily on foreign tourists are strik�ing; any rebound effect from the possibility of reinvigorated tourism could be
easily reversed by predictions of future waves infection (Bhaskara and Filimonau,
2021).
When other provinces’ growth rates were at their lowest, Papua’s growth rate
was one of the highest at 4.06% along with Central Sulawesi at 4.49%. Indeed,
in 2019 and 2020, Central Sulawesi did better than other provinces with only a
slight decrease in growth during the second and third quarters of 2020. By the
end of 2020, North Maluku and Papua were amongst the provinces with the fast�est recoveries with growth rates of 9.48% and 6.92%. Central Sulawesi also main�tained its growth at 4.45% when other provinces’ growths were still negative.
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