Great Demonstration Potentially Threatens Investment And Domestic Consumption

Rupiah (Photo: Antara)

JAKARTA Economic observer from Andalas University Syafruddin Karimi assesses that the impact of major demonstrations in Jakarta on the Indonesian economy is getting tougher and this is happening in the midst of fragile global conditions due to international trade tensions, the slowdown in China's economy, and geopolitical conflicts in the Middle East.

He added that domestic disturbances that trigger political uncertainty exacerbated investor perceptions that Indonesia has not been able to maintain stability, thus making foreign investment flows at risk of weakening.

"So that domestic disturbances that trigger political uncertainty worsen investor perceptions that Indonesia has not been able to maintain stability, making foreign investment flows at risk of weakening; mass actions that repeatedly suppress domestic consumption that contribute more than half of GDP," he said in his statement, Friday, August 29.

Meanwhile, he added that the weakening of the rupiah exchange rate increased the burden of imports, encouraged inflation, and reduced people's purchasing power and these internal factors could close Indonesia's chances of enjoying global economic recovery signals.

Therefore, Syafruddin said that the government needed to immediately break the vicious circle of social instability and economic pressure.

According to him, this can be done through transparent law enforcement, consistent public communication, and concrete resolution of employment issues.

"The government must immediately break the vicious circle of social instability and economic pressure through transparent law enforcement, consistent public communication, and concrete solutions to employment issues, so that Indonesia's image as a country with strong fundamentals is maintained, global market confidence is maintained, and the foundation of national economic growth is protected," he said.