Impact Of COVID-19, Disruption Of The Economic Sector And How Long Can Indonesia Last

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JAKARTA - The corona virus or COVID-19 continues to spread, including in Indonesia. The spread of this massive virus will slow down economic growth. Then, which sector is the most disturbed by this COVID-19?

Executive Director of the Institute for Development of Economics and Finance (Indef) Tauhid Ahmad said all sectors had been affected due to the widespread spread of this new type of corona virus. At least five sectors were disrupted.

"I think it is starting to be felt in many sectors. If we look at it, apart from tourism, of course the trade, transportation and industry sectors. Other sectors are indirect but have a big effect, it is the financial sector," he told VOI, in Jakarta, Thursday, 19 March.

However, Tauhid said, the most insured was the trade sector. This is because, with the outbreak of this virus, people are increasingly afraid to go to shopping centers, so that their income has dropped dramatically.

"The circulation of money (the most disturbed) in trade, obviously for sure. Dropped drastically because now people do not dare to expect to buy things other than basic necessities. Besides because the price is creeping up, people will also change their plans like that," he said.

Tauhid explained that at this time the people would change their priorities. If previously they still had the intention to buy something other than their basic needs, now the community will save it as an emergency fund.

"For example, people originally wanted to buy a motorbike. But in a situation like this they need a reserve of money, because prices will increase or materials will be difficult to find in the market. So they will try to have high liquidity. So they don't dare to buy other products," he explained. .

According to Tauhid, the outbreak of this virus had a huge impact on the economic sector. Many companies whose profits have dropped dramatically, even lost. Then, the financial sector also began to be affected. Many installments do not pay to the financial and banking sector.

"Now it will arise difficulties that now people prefer to hold cash or cash that is quickly disbursed so that it requires a large amount of liquidity. Because now the need is for food, staples, and for health," he said.

Last

How long and strong can the Indonesian economy last? Tauhid said, with the outbreak of COVID-19 and the wider spread of it in Indonesian territory, it will greatly affect the national economy. According to him, if the government doesn't start doing something there will be a crisis.

"I think it will definitely drop. This is going to be a crisis. So if we currently have more than 10 victims, I think if we are not alert we will be in crisis. Because if we do not move, part of Jakarta's economy (down) will also have a big impact. Especially if we don't do one important thing to reduce the impact of COVID-19, "he explained.

According to Tauhid, if you reflect on foreign journals about the Indonesian economy, how long will it last? He said there were several scenarios. One of them is how the central government can deal with COVID-19, the longer it is handled, the national economy will not last long.

"It depends on how the government handles it. For example, if we say we don't do anything this March, it could be July to August it will just be finished. This can be three to six months in total. This is a bit long," he explained.

Not Enough Just Stimulus Volume I and II

Tauhid began, the stimulus volumes I and II provided by the government were not enough to help the national economy move. Moreover, the impact has touched all sectors.

"I see it is still lacking. I see three main lines. First, we do not provide loans to the business sector. Including assistance for cheap loans for airlines, hotels, including companies that are directly affected," he explained.

Second, continued Tauhid, the central bank also did not cut low interest rates. According to him, in the current condition, the interest rate should be low and even the loan interest rate for MSME community groups and so on should be zero percent.

"There is none, the reference interest rate of 4.5 percent remains high. Even bank interest rates are above 9 to 10 percent," he said.

Then, continued Tauhid, third, the government must provide a large social assistance budget and given by name by address in areas where the people are directly affected.

"For example, the large amount for his needs at least one month, this is not there. If this is not provided, later if there is a lockdown they will not have money so they do not have access to buy food. Including health," he explained.

According to Tauhid, the three things above are something that is really needed in the midst of the COVID-19 outbreak. These three things, he said, are lessons from other countries in dealing with this virus.

"The average is what is done. What might be important is the payment of taxes, deferral of tax payments for all sectors, fees and so on that the government has to bear under these conditions. Now people do not think of paying taxes, telling themselves that they are in trouble, especially for the world. businesses that are currently dropping, "he said.

Quoted from kontan.co.id, in Moody's research sent Tuesday, March 17, he explained, industries that have a large exposure to the corona virus are divided into three.

First, the industry is quite highly exposed. For example, clothing, automotive manufacturing, automotive supply, consumer, gaming, tourism, airlines, non-food retail and shipping globally.

Second, the industry that is exposed is moderate alias. Among them, beverages, chemical manufacturing, media, metals and mining, oil and gas, property, agriculture, service companies, steel producers to hardware technology companies.

Third, are companies engaged in very low exposure industries. Such as construction, defense, equipment and transportation, rental, packaging, pharmaceuticals, real estate, food retail, telecommunications to waste management.