Afrilina Utami / 1888203030 (UAS)

Economic Policy in the Middle of the Covid-19 Pandemic

 To maintain the national economy so as not to fall into a prolonged recession, we do need to do a strong counter cyclical policy.  Strong in the sense of not half-hearted.  No half-hearted because it is indeed facing an extraordinary economic event.

 Incredible because the origin of the problem does not originate from an economic crisis.  But sourced from the corona virus pandemic event, Covid-19.  Suddenly, the economy stopped, both at home and abroad.  The economy suddenly crashed landing, and had to go into the ICCU room

 To the extent that the United States Congress passed an economic package worth US $ 2.2 Trillion, the largest post World War 2 in just two weeks.  Likewise, the Central Bank, The Federal Reserve, issued a policy outside the central bank's policy through the Asset Purchase Program policy which is non-limit and also targets the real sector.

 I have personally heard a discussion among policy makers discussing the size of the policy package whose value ranges from Rp. 200-400 trillion.  So far, Bank Indonesia has issued no less than Rp. 300 trillion from foreign exchange reserves to overcome the economic turmoil.  As I recall, since 2004, this was the biggest intervention by the monetary authority in a very short period of time.

 What BI has done is a jumbo policy for the size of Indonesia.  Moreover, if the Government and the House of Representatives actually agree to issue a policy package that is equivalent to BI spending, which is Rp. 300 trillion.  Assuming that BI will use its strength optimally, in the next few months we will see an economic policy action valued at Rp 500-600 trillion.  A very large number.

 Large-scale economic policies that will be taken to overcome the crisis emergence that are faced, causing the policy to be demanded as well as an exit strategy for further recovery steps in the next fiscal year.  Focusing on the ‘cushioning strategy’ will have an impact on the possibility of expensive and ineffective costs.

 The key is a mixed policy that includes short-term handling of economic shock, especially the household economy and MSMEs, with a maximum allocation to deal with the source of the problem, the Covid-19 pandemic.  At the same time preparing a policy foundation for the next fiscal year reflects efforts to restore economic functions.

 In this case, widening the deficit is done wisely by not piling it up this year, but also spreading it to the next year.  In summary, deficit financing capacity is not spent in this fiscal year alone but is also prepared for the following year.  That way, the debt structure remains within manageable limits.

 This insurance is needed in the midst of global uncertainty.  The recovery of the global economy is very dependent on the adaptive capabilities of humans and policy makers, in overcoming this corona pandemic.  The nature of mobility and human interaction, which is the basis for the global economy is a major victim of the Covid pandemic.  Of course, besides human lives.