Covid-19 has rapidly spread around the world impacting economies, healthcare systems and daily life. The challenges that it poses are real and consequential. To help policymakers and donors better understand the impact on Asia’s social sector, CAPS (virtually) sat down with our partners across the region to understand the challenges they are grappling with, the strategies they are employing to contain the fallout and their take on the future of the social sector.
To discuss the impact in Indonesia, we spoke to Romy Cahyadi—co-founder and CEO of Instellar—on 6 May 2020. Established in 2014, Instellar is a purpose driven company focusing on accelerating social innovation through incubation, advisory and investment in other purpose driven companies. They play the role of catalyst, connector and consultant in support of social enterprises in Indonesia.
CAPS: Romy, thank you for taking the time to speak to us today. How has the pandemic affected Indonesia?
Romy: Indonesia is still climbing the curve and things are likely to get worse before they get better.
The government was initially slow to respond, but by mid-April they had declared Covid-19 a national, non-natural disaster. The initial response has focused on flattening the curve by implementing large-scale social restrictions, especially in cities. For example, checkpoints were set up on major roads and transport hubs to prevent people from travelling home for the Eid festival.
Most people are accepting of the situation and looking at how they can do their part in supporting those in need. The general mood is positive. Despite the difficulties many people are facing there is a real sense of community and people are looking out for each other.
CAPS: This is something we have also seen in many other economies—a resurgence of community-based activities. How is this playing out in Indonesia?
Romy: People are really doing what they can to help. We are seeing a lot of efforts to support those who have lost their jobs—an estimated 2.8 million as of April—by providing daily food rations. Others are focusing on supporting frontline health workers to ensure they have access to medical supplies.
These initiatives are organic and widespread, often driven by individuals within local neighborhoods and sub-district areas. Nonprofits and larger international NGOs are also playing their part. There also seems to be an uptick in philanthropic activity with many companies and individuals making big donations.
CAPS: What about Instellar; how has the pandemic affected you?
Romy: Like everyone else we are adjusting to a new normal. Most of our training workshops have been cancelled or postponed, affecting our revenue. We are now focusing on improving cost-efficiency and looking at how we can continue to support our social enterprises despite continued social distancing.
Some programs are continuing online. For example, our collaboration with Hyundai Motor Company on the Hyundai Startup Challenge is moving ahead because it is important to offer ongoing support to social entrepreneurs. The first workshop for the 10 participating teams was held virtually. It was a great success with lots of positive energy and engagement.
We are also continuing crucial one-on-one consulting with several organizations including Change.org, Lingkar Temu Kabupaten Lestari and WasteForChange.
Our entrepreneurship training and mentoring program for refugees with UNHCR is also proceeding but requires some rethinking. The participants had already submitted their business proposals before the Covid-19 outbreak, but we need to revisit the feasibility of these business plans in the current environment. For instance, certain raw materials required for production may no longer be available, or an off-line business plan may need to consider pivoting to an online service.
CAPS: Speaking of pivoting business plans, how are social enterprises in your network adapting to the current situation?
Romy: Most social enterprises, especially the smaller ones, are in survival mode. The significant decrease in household consumption, especially in non-essential goods, has had a big impact on many social enterprises. However, those businesses which focus on essential goods and services seem to be doing okay. For example, Tanijoy, an online agriculture investment platform, has experienced some slowing in business but demand for agricultural products remains largely unaffected.
Like us, most social enterprises are focusing on improving cost efficiency and identifying ways to generate new revenue streams. For example, some social enterprises operating in the food and beverage industry are turning to food delivery. We have also seen some retail-oriented social enterprises pivot to produce high-demand products like sanitizer, PPE and other medical supplies.
CAPS: What’s next for Indonesia? Are people starting to think beyond Covid-19 yet?
Romy: Not really. Indonesia is still very much in the thick of it and things will likely get worse before they get better. The government is still largely focused on putting out fires. A post Covid-19 recovery is unlikely to be top-down. It is more likely to come from the private and social sectors and we are seeing some people starting to think about this. We are hopeful that the government will absorb ideas emerging from society into their own recovery response.