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The Economic Recovery Strategy for the Covid-19 Pandemic in Indonesia

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The Economic Recovery Strategy for the Covid-19 Pandemic in Indonesia IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925. Volume 12, Issue 2 Ser. V (Mar. –Apr. 2021), PP 36-43 www.iosrjournals.org The Economic Recovery Strategy For The Covid-19 Pandemic In Indonesia Hanri Jan Piter1, Guntur Eko Saputro2 Defence Ecomomics Indonesia, Defenese University Indonesia Kawasan IPSC Sentul, Citereup, Bogor, Jawa Barat, 16810 Abstract The crisis that arose from the Covid-19 Pandemic has caused many dismissal, unemployment increases, There are very few micro businesses, even some entrepreneurs have gone bankrupt. The government has announced that the 2020 economic recession is the worst economic crisis in history. The author considers it important to make scientific work as a strategy for economic recovery after the Covid-19 pandemic. The author uses a descriptive qualitative method with a field case study approach. Researchers used strategy theory according to Andrew J Good Paster which was divided into three parts, the first “end” namely the government aims at post- pandemic economic recovery to improve people's welfare, reduce the increase dismissal, and the addition of covid-19 casualties. The second “way The government needs to issue a policy of financial stimulus and social assistance that can be directly felt in people's lives during the Covid-19 pandemic. The third ”mean” The government optimizes its resources by recruiting volunteers as personnel assistance and improving health infrastructure, such as isolation rooms, laboratories, pharmacy, health personnel so that handling can be faster, as well as providing free vaccination injections to the entire community. Keywords: Economic Recovery, Covid-19, Strategy, Financial Stimulus --------------------------------------------------------------------------------------------------------------------------------------- Date of Submission: 15-04-2021 Date of Acceptance: 29-04-2021 --------------------------------------------------------------------------------------------------------------------------------------- I. Introduction Based on the 2015 Indonesian Defense White Paper Draft, disease outbreaks are a real threat to national defense. The world is still facing epidemics of several dangerous infectious diseases in humans. The current war is more towards an outbreak of a disease virus that is classified as a non-military defense (Saleha Mufida 2020: 123). Opponents who are invisible to the eye but many victims have died from the corona virus. It is important to map the impact of COVID-19 on global political economy in order to formulate future policies in fighting the pandemic. That the political economy sector is most vulnerable to the impact of COVID-19 so that it can lead to a trade war. (Kusno 2020). The need to provide policies that maintain the sustainability of the sector Micro small and Medium Enterprises which experienced a decline in sales due to the lack of traditional and modern markets, the closure of malls and restaurants which of course had a very serious impact on the ability of these small entrepreneurs to keep on trying. Then Trouble Micro small and Medium Enterprises faced by having to make an installment payment on the principal (debt) as well as interest to banks while there is no income to pay credit obligations to the Bank, even forced to lay off employees or forced to terminate employment. (Jurnal IKRA-ITH Ekonomika Vol.4. Lili Marlina, 2020). A policy is needed for the tourism economic sector which is affected by the pandemic, including the processing industry, transportation and provision of accommodation, food and drink as well as large-scale trade and retail, as well as in the sector of providing accommodation as well as food and drink. In areas that rely on tourism as their main income, pessimism has begun to emerge on the future of the tourism sector, given that there is no certainty when the Covid-19 pandemic will end. (Andi Setyo Pambudi 2020). The economic crisis must be resolved immediately so that it does not fall further into an economic depression. Therefore, economic recovery must be designed and implemented immediately, delays will aggravate the situation and make recovery difficult (Sugiri, 2020; Herdiana, 2020; Todaro & Smith, 2015). In the economic sector, the crisis arising from the Covid-19 Pandemic has resulted in many breaking labor relations, unemployment increases, Micro businesses have few buyers, companies suffer a lot of losses, etc. Unlike previous crises, it hit not only the demand side of the economy, but also the supply side of the economy. So that economic growth has experienced a recession in data published by the Central Statistics Agency in Indonesia BPS 2020 in the second quarter of -5,32%, The third quarter of -3.49% and the fourth quarter of -2.19% The recession was not only felt by Indonesia but also in several countries in the world. The drastic reduction in various activities of the national economy in turn is expected to result in people falling into poverty. DOI: 10.9790/5933-1202053643 www.iosrjournals.org 36 | Page The Economic Recovery Strategy For The Covid-19 Pandemic In Indonesia GDP Growth Rate in Indonesia in 2020 Data source BPS- Publish Diversity of Economic Growth from the Covid Pandemic Crisis. According to data from BPS, the spatial structure of the Indonesian economy in 2020 is still dominated by a group of provinces in Java Island which contributed 58.75 percent to GDP; then followed by Sumatra Island at 21.36 percent; Kalimantan Island 7.94 percent; Sulawesi Island 6.66 percent; The islands of Bali and Nusa Tenggara 2.94 percent; and Maluku Island and Papua 2.35 percent. The impact of the COVID-19 pandemic is felt with the level of growth contraction that varies between islands. The island groups that experienced a growth contraction (c-to-c) included Bali and Nusa Tenggara by - 5.01 percent; Java Island by -2.51 percent; Kalimantan Island by -2.27 percent; and Sumatra Island by 1.19 percent. On the other hand, the impact of COVID-19 was relatively less severe on the island group that experienced an increase in growth, including Sulawesi Island growing by -0.23 percent and Maluku and Papua Island by -1.44 percent. GRDP Growth and Contribution by Island in 2020 From the above background, the writer tries to research, how is the readiness of the government in facing Covid-19 so that it formulates the problem question "What is the economic recovery strategy for the covid-19 pandemic in Indonesia? II. Literature Reviews The impact of the Covid-19 pandemic caused low investor sentiment towards the market which in turn led the market towards a negative trend. Strategic steps related to fiscal and monetary are urgently needed to provide economic stimulation (Dito Aditia Darma Nasution 2020). Strategic regulations related to fiscal and monetary with financial stimuli as a way to assist investors in their business or business. The economic activities most affected by the Covid-19 pandemic disaster are micro small and Medium Enterprises who have limitations in various factors, ranging from capital capacity to limited human resource capabilities, so that it requires the right strategy to be able to accelerate the recovery process (Tomtom Makmur, Jurnal LIPI 2020) Capital assistance, reduced credit interest, postponement of installment payments and other assistance that is needed during a pandemic like now, “way” the government's strategy in providing assistance must be fast because micro small and Medium Enterprises as the spearhead of economic turnaround. DOI: 10.9790/5933-1202053643 www.iosrjournals.org 37 | Page The Economic Recovery Strategy For The Covid-19 Pandemic In Indonesia Economic recession storms will recover on curved conditions “V” It is difficult for most countries in the world to fulfill it, a country will be able to create a recovery economics model “V” if the development of the Covid-19 virus can be controlled and social restrictions are lifted (Bloomberg Economics (BE) in INDEF 2020 Study). “End” or the expected goal of economic recovery, namely that the people's welfare can return to normal, it is better if periodic evaluation of the current social restrictions is carried out. There are three policies that have been taken, namely the first to increase domestic consumption, the second to increase the activity of the business world and the third to maintain economic stability and monetary expansion. This policy is implemented simultaneously with synergy between fiscal policy holders, monetary policy holders and related institutions. (Edward Nainggolan, 2020). Policy in Andrew Good Paster's strategy in section “way” atau cara/metode jadi, sinkronisasi kebijakan antara pusat dan daerah diperlukan dalam bentuk nyata sehingga dapat diimplementasikanyakan dalam aktivitas usaha. Study Sumual (Chief Economist BCA) [2020] dan Baldwin & di Mauro (2020) stated that the potential economic problems caused by the Covid-19 pandemic are very different from the 1997/1998 Asian economic crisis and the 2007/2008 global financial crisis. According to Kwee (2020). The 1997/1998 Asian economic crisis and the 2007/2008 global financial crisis occurred due to investor greed that led to the collapse of the capital market. As for the economic problem due to Covid 19, there is a supply and demand shock due to the dependence of countries in the world on imports of raw material components from China. The Covid 19 pandemic that has occurred since early 2020 has had a negative impact on the country's economic growth and has threatened the death of various industrial sectors. The problem of the Covid 19 pandemic is not just a health problem given the fear of the corona virus but also the threat of an economic recession because various business sectors cannot carry out normal activities to support government programs, namely large-scale social restrictions to reduce the rate of transmission of covid 19 (Setyawan, 2020). Dilemmas experienced in covering large-scale social restrictions In the early days of the Covid-19 pandemic, social restrictions were needed but the economy was weakening, a decision that is difficult to make.
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