THE NEGATIVE IMPACT OF LOCKDOWN

SYSTEM IN INDONESIA ECONOMIC

SECTOR

By

ANNISA DWI RIZKAFIANI

19312449

Class K

ACCOUNTING STUDY PROGRAM

UNIVERSITAS ISLAM INDONESIA

YOGYAKARTA

2020
 The Negative Impact of Lockdown System in Indonesia Economic Sector

The spread of Covid-19 or known as the Corona virus that originated in the city
of Wuhan, China is a serious concern for economists, business people, and policy
makers in various countries. World Health Organization (WHO) explain that countries
around the world can not just apply lockdowns to prevent corona virus. As with social
distancing or just testing. All can not be done individually. Must be done all at the same
time. Most European countries and the United States followed China and other Asian
countries to do lockdowns to fight the new corona virus. Everyone is required to work
and study from home. All schools, restaurants and entertainment venues were closed.
The lockdown discourse is getting stronger with the increasing number of positive cases
of corona virus and the resulting deaths in Indonesia. In fact, hashtag
#Indonesia_LockdownPlease is becoming a trend on Twitter. This discourse clearly
raises the pros and cons. There are some people who think that lockdown is too
extreme, while others argue that this is the only way to stop the corona virus.

As a global economic giant, China is the largest global producer and consumer
with GDP in 2018 reaching USD 13.6 trillion. The turmoil that occurred in China
impacted on other countries that have economic activities with China, one of which is
Indonesia. The number of positive Covid-19 cases in Indonesia has exceeded 1500
patients. Data released by the Covid-19 Task Force for the Acceleration of Handling
shows there are more than 100 cases added today. Based on the update at 16:10 WIB,
Tuesday, March 31, 2020, the number of positive confirmed cases of corona virus in
Indonesia increased by 114. Thus, the total number of positive cases of Covid-19 in
Indonesia today has reached 1,528 patients. Of these, 1,311 corona positive patients in
Indonesia are currently undergoing treatment. While 81 patients have been declared
cured. While the death rate of Covid-19 patients in Indonesia has reached 136
inhabitants. As of today, there have been added 14 new cases of death. With the death
toll reaching 136 out of 1,528 positive cases of Covid-19, the Case Fatality Rate (CFR)
has now become 8.9 percent.
 The Governor of Bank Indonesia (BI), Perry Warjiyo explained that the Covid-
19 virus outbreak had an impact on the global economy. According to Perry, the spread
of the Covid-19 virus can cause uncertainty which tends to be higher and can reduce the
performance of global financial markets, can suppress many world currencies, and
trigger a reversal of capital to assets that are considered safe. In addition, the possibility
of world economic growth will decline due to global supply chains, declining world
demand, and weak economic actors which are some of the main factors. Bank Indonesia
also strengthened coordination with the government and the FSA to closely monitor the
polemic on the spread of Covid-19 and how it will affect Indonesia more and more.

Plans to close access to areas affected by the corona virus (lockdown) have also
emerged so that citizens do not approach the virus center, Jakarta. This needs to be done
because the number of cases in the capital city is quite high compared to other regions.
Even so, the president claimed he had not thought about taking that step, even though a
third party agreed to the policy. This efficacy is proven in what has happened in Wuhan
City, the source of the corona virus.

Lockdown system has not been implemented in Indonesia, precisely in Jakarta.

This is because the city with the most cases of corona virus is Jakarta, which is the
center of Indonesian government, business and commerce. If the lockdown is carried
out in Jakarta, the effect will be quite significant because Jakarta's share of the national
economy is quite large at 70%, not to mention the supply of basic raw materials will be
hampered because Jakarta currently relies on food supplies from outside the region, and
Jakarta also accounts for 20% of the national inflation rate. If left unchecked, the
inflation rate could reach above 4-6%. According to CSIC reported by Katadata, Yose
Rizal Damuri explain that Jakarta's economy accounts for about 25% of national GDP
and determines more than 60% of the national economy. The lockdown system is
expected to reduce the Indonesian economy to 1% of GDP.

The Minister of Finance, Sri Mulyani Indrawati, explained that lockdown

system could make the economic pace even harder. The reason is, with a self-distancing
policy that limits the level of movement of the people due to the corona virus is
more stringent, the level of public consumption can fall sharply. If the level of
consumption decreases, then the growth of some economic supporting indicators will
begin to fall. Understandably, the national economy is very dependent on the rate of
consumption of the people. Based on the CNN Indonesia, Minister of Finance Sri
Mulyani Indrawati said that once the consumption level drops to 4 percent, then it all
drops to around 4 percent, if it drops to 3 percent, everything goes to 3 percent, it will
really hit the pace of Indonesia's economy in the short term. The lockdown can make
the economic rate more severe.

The tourism sector became the first affected with the potential loss of national
foreign exchange income to reach 2 billion US dollars. The Indonesian trade sector is
also predicted to experience a number of contractions. More than 495 types of
commodities with the aim of Chinese exports will be affected. While around 499 types
of imported goods from China are expected to shrink or even disappear from the
Indonesian market and most products that are strategic consumer goods will have
serious implications for domestic inflation. The government needs to monitor market
conditions given the potential price movements ahead of Ramadan and Eid.

Another problem with the lockdown discourse is the problem of food supply and
other needs. If not prepared properly, food prices will increase. This will cause scarcity
of goods in various markets, which in turn triggers social unrest. For some circles such
as the middle class, scarcity may not be too problematic, because most people have
prepared themselves for a long time related to lockdown. However, this policy will
actually burden the middle and lower classes, who are more dependent on daily food
purchases. On that basis, the most important handling of corona is, preparing health
facilities to cope with severe cases and the need for a comprehensive tracking
communication strategy, both from the central and regional governments.

The President of Indonesia did not issue a lockdown policy not without reason.
President Joko Widodo via video conference claimed to have done a through calculation
and analysis of countries that carry out lockdown policies. There is a lot that must be
considered and Indonesia must be sure to be ready if these impacts occur. The
government must be firm in making an understanding of the community not to panic
buying and competing to collect goods for personal gain. Lockdown is the last resort
and method if the number of cases of infection has reached a very alarming stage. This
is not because we have to wait for more infected victims, even South Korea, which has
been infected with 8,000 people, has not implemented a lockdown. If the president
issues a lockdown policy it will have a major impact on Indonesia's economic growth,
this is caused by economic activities that will stop massively.

In return the government also issued other policies such as studying, working,
and worshiping from home to suppress the spread of Covid-19. Although the policy is
enforced, there are still people who abuse this policy, such as learning activities and
working at home are used for a vacation outside the city. So this diversion of policy can
expand and accelerate the spread of the Corona virus, both from those spread by visitors
to the local community, as well as those spread by the local community to visitors. As
good citizens who obey the government and rules, people only need to be disciplined
with social distancing and physical distancing policies #dirumahaja to minimize the
spread of Covid-19 and the Indonesian economy is quickly recovering. It would be very
useless if there were people who were apathetic to health. Do not rely too much on the
government, help them by changing our lifestyle for a better and cleaner.
 REFERENCES

T. Tarmidi, Lepi. (1999). On the Indonesian monetary crisis: causes, impacts, role of

the IMF and advice. Bulletin of Monetary Economics and Banking, (3-17).
https://www.bi.go.id/id/publikasi/jurnal-
ekonomi/Documents/3b7ed389a7b4484fbb81173e451f8c1abempvol1no4mar.pd
f

LIPI Cooperation, Law, and Public Relations Bureau. (February 25, 2020). Impact of

Corona Virus on the Indonesian Economy 2020.

http://lipi.go.id/siaranpress/Dampak-Virus-Corona-pada-Laju-Ekonomi-
Indonesia-2020/21963

Ayu, Wanda. (March 26, 2020). UI Chancellor: Understanding the Impact of

Lockdown

on the Indonesian Economy. https://www.ui.ac.id/rektor-ui-memahami-dampak-

lockdown-bagi-perekonomian-indonesia/

Fauzie, Yuli Yanna., & CNN Indonesia. (March 16, 2020). Measuring the Economic

Threat of Lockdown Due to Corona Virus.

https://www.cnnindonesia.com/ekonomi/20200316074515-532-
483710/mengukur-ancaman-ekonomi-dari-lockdown-virus-corona

Indraini, Anisa. (March 31, 2020). Jokowi Asks for Large Scale Social Restrictions,

What are the Impacts on the Economy?. https://finance.detik.com/berita-

ekonomi-bisnis/d-4959065/jokowi-minta-pembatasan-sosial-skala-besar-apa-
dampaknya-ke-ekonomi

Apriyani, Tri. (March 27, 2020). Side Effects of Corona Urgence on the Economy.

https://www.suara.com/yoursay/2020/03/27/133435/efek-samping-urgensi-
corona-terhadap-ekonomi
Idhom, M Addi. (March 31, 2020). Corona Update on March 31: Corona Case Data in

32 Provinces of Indonesia & the World. https://tirto.id/update-corona-31-maret-

data-kasus-di-32-provinsi-indonesia-dunia-eJYs

Egeham, Lizsa. (March 24, 2020). Jokowi Reveals Indonesia's Reason for Not

Lockdown in the presence of 34 Governors.

https://www.liputan6.com/news/read/4209866/jokowi-ungkap-alasan-indonesia-
tidak-lockdown-di-hadapan-34-gubernur

Bayu, Dimas Jarot. (March 19, 2020). CSIS: Lockdown Buruk Bagi Ekonomi dan Tak

Efektif Mencegah Penyebaran Virus Corona.

https://katadata.co.id/berita/2020/03/19/csis-lockdown-buruk-bagi-ekonomi-
dan-tak-efektif-cegah-sebaran-corona