However, during our last conversation I was surprised to learn that they decided to move their bakery and café to another, considerably bigger, location. Moreover, they were making plans to open a shop for skin-care products on the side. I asked them whether it would be wiser to wait for the COVID-19 crisis to end first before going for business expansion. After all, people are still not spending as they used to in the pre-COVID-19-crisis days. They replied, however, that COVID-19 will never go away, and considering there is currently a lot of commercial property available for rent at strategic locations – and at affordable prices due to low demand – it is now a time to act, and a time to take risk.

It certainly is a risky decision – but hey – that is the nature of entrepreneurship. Risk is what can separate them from their business competitors. And, risk can distinguish between leaders and followers.

The point of this little anecdote is that we seem to have reached a point where people increasingly become aware that the COVID-19 virus is here to stay. Recently a survey conducted by Nature, a leading international weekly journal of science, showed that almost all of the 100 scientists surveyed (involving immunologists, virologists, and infectious disease researchers) believe COVID-19 will become endemic (referring to  the constant presence of the virus in society).

The positive message from these experts, though, is that they expect the effects of COVID-19 to decrease over time (as peoples’ immune systems build resistance). This would be a situation quite similar to that of influenza (also a contagious respiratory – and endemic – illness that is caused by a virus). Similar to COVID-19, influenza is a harmless virus for most of us but can be a fatal one for those who have weakened immune systems (usually due to old age or an underlying illness). And interestingly enough, influenza seems to have miraculously disappeared from the face of the earth ever since the arrival of COVID-19 on the scene. So, one of the many questions out there is whether influenza and COVID-19 can co-exist, or one will dominate the other (which would explain why there are almost no reports of any influenza cases over the past 12 months).

In most parts of the world the COVID-19 pandemic has now been ongoing for more than a year (in Indonesia the first cases were confirmed in early March 2020). And, the available data do suggest that COVID-19 is becoming less fatal for people as the number of COVID-19-related deaths has been declining since the start of February 2021. This is, in fact, a global trend (see the charts below).

However, this easing trend cannot be attributed to national immunization programs (since these programs were only initiated starting from January 2021. So, it will take several months, and in cases like Indonesia where the population size is huge it will take years, before enough people are immunized. Seeing this global trend, it actually gives the impression that part of people have become naturally resistant over the past year (because of an infection that may, or may not, have gone unnoticed to the person). In this context, it is also worth pointing out that in the Netherlands between 20-25 percent of blood donors are estimated to carry COVID-19 antibodies. If this is representative, it could indicate that a significant part of the population has already become immune to existing COVID-19 varieties (which may also strengthen people’s resistance to future COVID-19 mutations).

Moreover, the number of particularly vulnerable people (those with weak immune systems and no built-up resistance to COVID-19) has now obviously become much smaller compared to the beginning of the pandemic as they were the virus’ ‘easiest’ victims.

Considering Indonesia has softer COVID-19-related social and business restrictions (compared to, for example, the Netherlands) it could be that resistance to COVID-19 is developing much more rapidly in Indonesia. However, it is unlikely, though, that the huge declines in new confirmed COVID-19 cases and COVID-19-related deaths in Indonesia can be fully attributed to this possible increase in resistance among the population. So, there must be other factors at play as well. However, this is where it becomes tricky.

When reading a wide variety of online reports, experts (from across the world) seem generally puzzled why there has occurred this significant drop in COVID-19-related deaths since late-January. But they do present some possible explanations:  

- Strengthened immunity due to an earlier COVID-19 infection
- Strengthened immunity due to the COVID-19 vaccine
- Changing of the season (weather)
- People comply with health and hygiene protocols
- Possible COVID-19 under-testing

However, in the case of Indonesia, all five reasons above do not really satisfy our curiosity. Considering the number of COVID-19 tests conducted has stayed near the same level (one that is in line with World Health Organization guidelines), under-testing cannot be a reason. Meanwhile, very few Indonesians (relatively speaking) have obtained the COVID-19 vaccine, so the immunization program cannot explain the sudden drop in COVID-19 cases. Moreover, we do not detect greater compliance with hygiene and health protocols in Indonesia. Lastly, the changing of the season also seems somewhat unlikely. Yes, Indonesia is heading towards the end of the annual rainy season, but if we compare it with the influenza virus – which in many respects is similar to COVID-19 – then its prevalence should only increase slightly during the rainy season, implying that a significant decline in new COVID-19 cases is highly unlikely at the end of the rainy season.

The tables above show that – without a drastic change in the number of COVID-19 tests done – there occurred a significant decline in the number of new confirmed COVID-19 cases, and thus in the positivity rate, between the end of March 2021 and the start of February 2021.

The problem is, though, that if we do not fully understand what causes this decline in new cases, then it is difficult for the Indonesian government to start easing current social and business restrictions. The lack of knowledge would increase chances of making policy mistakes, hence seeing a return of rising COVID-19 cases. Moreover, contrary to the trend in Indonesia, the number of worldwide new confirmed COVID-19 cases started climbing again from late-February 2021 after experiencing a sharp decline in the preceding month.

So, most likely, the Indonesian government will not alter its current policies. That would be the safest option, although from the perspective of the economy it means the continuation of lackluster economic activity.

The significant decline in new COVID-19 cases and deaths that recently occurred in Indonesia, and rising awareness that COVID-19 may become endemic and therefore we cannot delay investing and consuming until the virus is completely gone (like my neighbors’ attitude in the first paragraphs of this introduction), are the reasons why we gave this month’s report the title ‘Light at the End of the Tunnel?’ However, this title is sort of meant in a provocative manner because it is still too soon to become optimistic; certainly in the case of Indonesia, which is facing much bigger challenges than most other nations in this crisis (we will discuss these challenges in one of the chapters in this report). So, the light at the end of the tunnel can actually easily be mistaken for the lights of an oncoming train.

Richard van der Schaar
Managing Director
Indonesia Investments
02 April 2021

This was the introduction to the March 2021 report. This report can be ordered by sending an email to or a message to +62.882.9875.1125 (including WhatsApp).

Price of this (electronic) report:

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Take a glance inside the report here!




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