ANALYSIS OF THE ECONOMIC LOSS IN INDONESIA DURING

THE COVID-19 PANDEMIC

submitted to fulfill a major assignment in Introduction to Economics course

by:
Group 2:
Ayu Novita Lestari (1201194002)
Made Denaldi Arthasika (1201192442)
Yudistira (1201190001)
 ANALYSIS OF THE ECONOMIC LOSS IN INDONESIA DURING
THE COVID-19 PANDEMIC
submitted to fulfill a major assignment in Introduction to Economics course
Ayu Novita Lestari
Made Denaldi Arthasika
Yudistira

ABSTRACT
The economic crisis is a situation where the economic downturn was caused by the number of
companies facing bankruptcy and the increase in unemployed workers number. The world has
experienced an economic crisis twice called the global economic crisis and this time, it's happened
again for the third time. The current economic loss is caused by the spread of the virus to almost
all countries in the world. The Corona Virus or COVID-19 has been declared as a pandemic
because it has outspread throughout the country. Indonesia is one of the COVID-19 infected
countries and currently the economy in Indonesia has decreased because many businesses are out
wiped out due to the decreasing number of consumers and workers who were laid off. After all,
owners of the business are unable to pay them severance. This pandemic does not only raise
economic issues but also social issues because, with the presence of  COVID-19, death rates
increase every day and the community was given a limitation to socialize to prevent the spread of
Corona  Virus.
Keywords: economic crisis, covid-19, economic loss
LIST OF CONTENTS
 CHAPTER 1
PRELIMINARY
1.1 Background
Indonesia is affected by a virus originating from China, namely Covid-19. This virus
causes many social, economic problems and causes an increase in mortality in the
community. With the emergence of Covid-19 the Indonesian government has begun to
emphasize that people are advised not to carry out activities outside the home. to avoid the
increasing spread of Covid-19. Social distancing and PSBB or Large-Scale Social
Restrictions have been carried out by the government. However, new problems have emerged
that are being felt from various groups, including the upper, middle and lower classes. The
government has also tried to handle Covid-19 patients properly and also provided prevention
tools. Indonesia as a country that has a demographic bonus is in a condition to build a huge
economic power that must experience economic delays due to this virus outbreak. the
economy becomes disrupted. In addition, the PSBB program and the Physical Distancing
program have had a negative impact in terms of economic growth. Where the current
conditions indirectly disrupt the export and import of products, as well as the reduced or slow
pace of investment. Another impact is the difficulty of entering investment from outside due
to the influence of this virus outbreak.
Currently the global economy including Indonesia experienced uncertainty and leads
on an economic recession due the Covid-19 pandemic. Some countries such as the US, Japan,
Korea South, European Union, Hong Kong, and Singapore experienced negative economic
growth in the first and second quarter of the year 2020. Economic slowdown is certain will
have an impact on performance Indonesian economic growth in 2020. Pandemic evokes a
domino effect of health to social and problems economy, including business actors. The
Central Bureau of Statistics has recorded the growth rate economy in the first quarter
(January March) 2020 only grew 2.97%. This figure is slowing down from 4.97% in the
fourth quarter of 2019. In fact, growth way below achievements in the first quarter of 2019
reached 5.07%. And on the Quarter II of 2020 the growth rate Indonesian economy minus
5.32%. The figure is inversely proportional with the second quarter of 2019 by 5.05%
Indonesian economy based on GDP (Product Domestic Gross Domestic Product in the
Quarter II 2020 at the current price is IDR 3,687.7 trillion. But on the basis of constant prices
with the base year 2010 amounting to IDR 2,589.6 trillion. When compared to on the basis of
constant price or yoy (year on year), then growth economy in the second quarter of 2020
contracted -5.32%. If compared to the Quarter I 2020, the contraction is -4.19%. While the
cumulative against Semester I 2019, growth experienced contraction of -1.26%, contraction
in economic growth Indonesia in the second quarter yoy deep enough. Based on that data,
growth the Indonesian economy is experiencing negative growth on Second Quarter 2020.
This paper aims to assess impact Covid-19 to growth economics and solutions. With this
article is created to discuss how Indonesia was able to overcome losses and deficits during
the Covid-19 pandemic.

1.2 Problem Formulation

1. How is the country's economic loss due to the Covid-19 pandemic?
2. How is the government's efforts in dealing with the economic crisis during the Covid-19
pandemic?
3. How are efforts to deal with the economic losses due to the Covid-19 pandemic?

1.3 Purpose
1. Knowing the country's economic losses due to the Covid-19 pandemic, both national, sectoral
and individual losses.
2. Knowing the role of the government in dealing with the economic crisis during the Covid-19
pandemic
3. Know the efforts to get around the economic losses due to the Covid-19 pandemic
 CHAPTER II
ANALYSIS METHOD

This research uses literature study. Where this literature study method is a method of
collecting library data, reading, taking notes and processing research materials (Zed, 2008: 3).
This literature study is used to obtain a theoretical basis to build a theoretical basis, a
framework of thought and determine a provisional hypothesis in research.
approach Apart from using a qualitative phenomenological approach, another type of
research used is phenomenological qualitative, namely a research method that seeks reveal
the universal essence of phenomena experienced personally by a group of individuals
(Cresswell: 1998). Phenomenological research data obtained from various interview results
quoted from various media, which focuses on economic losses due to the covid-19 pandemic
in Indonesia. Medium that is on the internet allows users represents both himself and interact,
cooperate, share, communicate with other users and form virtual social bonds (cf. Fuchs:
2011). This paper emphasizes analysis on the inference process comparison and relationship
dynamics phenomena observed in various news about the covid-19 pandemic in Indonesia the
impact on the economy after the implementation of the PSBB.
 CHAPTER III
DISCUSSION
3.1 Literature Review
3.1.1 Covid-19
Corona virus or severe acute respiratory syndrome coronavirus 2 (SARS-CoV-
2) is a virus that attacks the respiratory system. This disease due to viral infection is
called COVID-19. The Corona virus can cause minor disorders of the respiratory
system, severe lung infections, and death. Severe acute respiratory syndrome
coronavirus 2 (SARS-CoV-2), better known as the Corona virus, is a new type of
coronavirus that is transmitted to humans. This virus can affect anyone, including
infants, children, adults, the elderly, pregnant women, and breastfeeding mothers.
Coronavirus is a collection of viruses that can infect the respiratory system. In most
cases, this virus causes only minor respiratory infections, such as the flu. However,
this virus can also cause severe respiratory infections, such as lung infections
(pneumonia). Apart from the SARS-CoV-2 virus or Corona virus, viruses that are also
included in this group are the viruses that cause Severe Acute Respiratory Syndrome
(SARS) and the viruses that cause Middle-East Respiratory Syndrome (MERS). Even
though it is caused by a virus from the same group, namely the coronavirus, COVID-
19 has several differences from SARS and MERS, including in terms of the speed of
spread and the severity of symptoms. Indonesia is still struggling against the Corona
virus to date, the same as other countries in the world. The number of Corona virus
cases continues to grow with some reporting recoveries, but not a few have died.
Handling and prevention efforts are continuously being made to fight COVID-19 with
flu-like symptoms. The case of the Corona virus is known through a mysterious
disease that paralyzed the City of Wuhan, China.

3.1.2 Economic Crisis

The economic crisis led to drastic changes in the economic sector. These rapid
economic changes have led to exchange rate deflation and inflation in the prices of
basic necessities. According to Tambunan (2018), economic crises can occur
suddenly, such as the crisis caused by the increase in world crude oil prices in 1974,
and the economic crisis which is an impact of the COVID-19 pandemic that occurred
in all parts of the world. world. Based on the source, an economic crisis that arises in
a country can start from domestic or originate from problems that occur abroad.
3.1.3 Gross Domestic Product

GDP or Gross Domestic Product in international language is also called GDP

or Gross Domestic Product. According to experts, GDP can be defined as the amount
of production of goods or services that have been produced by a production unit in an
area at a certain time. So, GDP can be used as a measure of a country's economic
growth. Thus, GDP can be said to be an economic indicator of a country to measure
the total value of production where this total amount is produced by all people or
companies, whether locally owned or foreign in a country.

3.1.4 Deficit
a deficit occurs when expenses exceed revenues, imports exceed exports, or
liabilities exceed assets. A deficit is synonymous with a shortfall or loss and is the
opposite of a surplus. A deficit can occur when a government, company, or person
spends more than it receives in a given period, usually a year.
The pressure to implement a regional quarantine policy in each country will
certainly increase, which means that economic uncertainty will tend to increase and
lead to a gradual and drastic economic slowdown. All countries will be faced with
conditions where state income has decreased, but on the other hand, countries need a
very high increase in state expenditure for various needs for handling Covid-19. This
situation will put many countries into a prolonged debt crisis.
Indonesia also does not escape the possibility of being trapped in the danger of
an unsustainable budget deficit. When Covid-19 began to spread in Indonesia, the
President of the Republic of Indonesia Joko Widodo issued Regulation Orders in Lieu
of Law (Perpu) Number 1 of 2020 concerning State Financial Policy and Financial
System Stability for Handling the Corona Virus Pandemic. In Article 2 of the Perpu, it
is possible for the government to relax the budget deficit limitation of more than 3
percent. It is stated in the article that the budget deficit limit may exceed 3 percent of
Gross Domestic Product (GDP) during the handling of Corona Virus Disease 2019
(COVID-19) and / or to face threats that endanger the national economy and / or
financial system stability at the longest until with the end of Fiscal Year 2022
 Indonesia is predicted that in 2020 it will be dominated by fading economic
prospects, where this slowdown was predicted before the outbreak of Covid-19.
Covid-19 has made Indonesia's economy worse off. The poverty rate is expected to
decline, but the proportion of vulnerable people (without economic security) will
increase significantly. Economic growth is projected to weaken significantly at 2.1
percent (most optimistic) to minus 3.5 percent in 2020 before returning to an average
of 5.4 percent in 2021-2022 when aggregate demand has recovered.

3.2 Economic Loss

3.2.1 National Losses

The losses suffered by the state and the easiest to calculate is the national
aggregate loss. However, because it is macro in nature, this calculation is only used
by large-scale economic actors, or by the state in preparing (revising) the APBN. One
method of calculating can use the reference Gross Domestic Product (GDP), which is
the accumulated total production in a country during a year.
Indonesia's economic growth in 2020 was originally estimated at 5.3%, but
this figure was corrected as a result of the Corona pandemic, and some people
predicted growth below 2%. Given the uncertainty and different predictions, as well
as fluctuations in the USD exchange rate (a drastic increase to IDR 16,000 per USD in
early April 2020), we determine that the GDP figures used in this paper are the 2019
reference.
Indonesia's GDP per capita per year in 2019 based on the Central Statistics
Agency (BPS) is USD 4,174.9 or IDR 59.1 million (exchange rate of IDR 14,156 per
USD). with a population of 267 million, Indonesia's GDP in 2019 will be as much as
Rp. 15,833.9 Trillion (www.bps.go.id). The proportion of regions in GDP or known
as PDRB (Gross Regional Domestic Income), referring to previous BPS data, is DKI
Jakarta as much as 17.53% (to GDP), Bodetabek (Regency & City of Bogor, Regency
and City of Bekasi, Depok City, Tangerang Regency & City, as well as South
Tangerang City) as much as 7.3%, and Bandung Raya (Bandung City & Regency,
West Bandung Regency, Cimahi City) contributed 3% to GDP. Meanwhile, Indef's
data states, Jabodetabek affects 70% of Indonesia's GDP.
By using a comparison of the proportion of GRDP from areas that impose
social restrictions. Jabodetabek GRDP in accumulation is 24.83% of the national
GDP. So the limitation of activities with the same provisions above, in Jabodetabek
for 1 month resulted in a loss of 1/12 X 24.83% X IDR 15,833 trillion X 90% = IDR
294.85 trillion. If extended for 2 weeks, the loss will be around IDR 442.3 trillion.
And if Bandung is followed in the same period, it will increase the loss by 17.6% (ie
3% / 17% X 442.3 T = 75.1 T) to IDR 517.5 trillion. Losses due to restrictions in
other regions can be calculated using the same method, namely comparing the
proportion of GRDP to GDP during the compared period of 12 months.

3.2.2 Sectorial Losses

National economic losses will affect the state budget. The Minister of Finance
Sri Mulyani also made corrections on April 1, 2020 (www.pasardana.id, 02/04/20).
However, for business actors, the aggregate figure cannot always be used. This is
because not all business sectors suffer the same losses. There are even certain sectors
that benefit from social restrictions.
Of the total losses of around Rp. 517 trillion above (Jabodetabek plus
Bandung City for 1.5 months), there are several sectors that have contributed the most
to the losses. The most disadvantaged business sectors are those that rely on crowds
(such as tourism, events or shows, exhibitions, malls); then the businesses that support
it (such as mass transportation, ticketing, hotels, seasonal trading / souvenirs, etc.);
businesses that cannot apply physical / social distancing (such as salons, haircuts,
motorcycle taxis, spas, children's games, to house cleaning services, etc.); tertiary
product businesses whose sales depend on public savings funds (such as property,
private vehicles, body care, hobbies, etc.) as well as supporting businesses such as
leasing and other lending forums. The energy sector is also under great pressure due
to drastically shrinking business activities, except for PLN. as well as many other
sectors that were also affected.
The business sectors that have the potential to benefit from the existence of
social restrictions include goods delivery service providers, cellular operators and
internet providers, emergency credit providers, health insurance contributions, and the
like. Of course, if the PSBB record is not too long, the people still have savings and
service providers are able to innovate and provide adequate services.
Businesses in the health sector have the potential to generate profits. For
example, because all people are required to wear masks when they leave their homes,
mask producers and sellers are likely to make a profit. Likewise, providers of hand
sanitizers, disinfectants, soap, and similar products. The media sector (especially
outside of print media) is another business that has the potential to gain profit with an
increasing number of advertisers due to restrictions on physical movement.
The food sector is claimed to be a stable business in times of crisis, only
experiencing adjustments in methods, both ordering, payment and shipping methods.
There will be increased competition at the bottom level, so individually in practice the
opposite can happen: the market exists but turnover decreases as supply increases.
There are also location factors that influence, where places that turn quiet (for
example schools that are on holiday) will be directly affected, and consumers move to
other locations (near their respective homes).

3.2.3 Individual and Corporate Losses

Of all the loss calculations above, implementation ultimately lies in the realm of
individuals and business entities. The state experienced a 'loss' because income fell,
especially from taxes, while spending soared because they had to deal with
emergencies, provide social safety nets, deal with sick people, deploy extra officers
and health workers, pay interest on new debts, etc. However, the losses will later be
compensated for in the next income (tax and non-tax), so that basically the state will
break even or not lose, unless in the implementation there is leakage / theft /
corruption of state assets.
Then the national losses will be transmitted as losses to the people of the
country. As a result, the number of IDR 517 trillion plus interest on the new state debt
will be reduced to losses for companies and individuals. As for in general, the
concrete forms of the losses include:
1. For the struggling entity:
a. Loss of income due to no sales, but expenses still occur even if not
completely.
b. There is a penalty / penalty for inaccurate delivery.
c. Damage to goods if stuck in the warehouse or on the road, or payment of
insurance contributions. additional if you apply premium.
d. There is a severance pay for layoffs.
e. There is a penalty / interest if you use bailout funds or debt, or if you
cannot pay in sync, the amount is also determined when.
f. Emergency funds or social funds that cannot be postponed, etc.
g. Losses if the company is forced to sell assets at low prices.
h. An invaluable loss if the crisis results in the company's capital being
depleted until the scale of the business shrinks or even goes bankrupt.
i. Even so, the company may have input from previous sales invoices, which
can permanently reduce the loss or budget deficit in the current month.
with a successful billing record, aka the client is able to pay according to
the provisions.

2. Individual and Corporate Losses

a. Loss of honorarium and / or allowances during the crisis, or loss of income
for the perpetrators of struggle / informal profession.
b. There is a penalty / interest due to late or non-payment of obligations (eg
credit installments, overdue debt, etc.).
c. Extra expenses for family members in an emergency.
d. New debt interest if using bailout funds.
e. The losses are invaluable if the crisis results in job losses (due to layoffs or
the struggle to go bankrupt and not be able to rise again).
 CHAPTER IV
SOLUTION

In the business world, there are always advantages and disadvantages. Several
business actors survived the crisis. For example, business actors who lose from their business
in renting party equipment because all crowd activities are prohibited, but they also have
gardens that are planted with various kinds of vegetables. In times of crisis, vegetables
actually experience an increase in demand. Or entrepreneurs who rent four-wheeled vehicles,
who are quiet in order, receive compensation from higher demand for delivery of goods. and
homogeneous things that could happen.
Businesses that have cash funds can also get around losses, namely by buying
assets or businesses that are good but sold cheaply. Maybe the cash funds were obtained from
the sale of assets at a low price (which is accounting for losses), but if used to get other,
better assets, it could generate profits. and after the crisis is over, the new asset can either
produce better, or be sold at a much higher price, relative to compensation for losses.
What if diversification or other efforts cannot be made to reduce losses? Finally, in
general, the same steps will be taken, namely savings. The community will try to reduce their
expenses as much as possible, and last as long as possible. Furthermore, if it is still
insufficient, we will take the next step, namely finding a loan or debt. After that, looking for
ways to receive new income or income.
These steps will be taken by individuals, micro-entrepreneurs, companies,
organizations, as well as by the state. similar to for example, the world's four-wheeled vehicle
factory such as Toyota has submitted new debt of around USD 9 billion (IDR 135 trillion) to
overcome the crisis (www, Usaha.com, 27/03/20).
So it is common that once a pandemic hits, lending forums such as the International
Monetary Fund (IMF) immediately show debt packages to potential countries. Indonesia has
also issued world bonds, which were claimed by pandemic bonds worth USD 4.3 billion in
early April 2020 (www.cnbcindonesia.com, 13/04/20).
Austerity measures, seeking loans, and efforts to get new income, are common steps to
survive. Survival during this crisis is said to be very crucial, becoming the capital to find
compensation for post-crisis losses. because if it can't survive, then it will collapse before the
crisis ends, then all potential loss returns will be lost. For example, if a company goes
bankrupt, all that can be done is to release assets to cover liabilities, then the company can no
longer operate, maybe even shareholders still bear the inherited debt. Meanwhile, if the
company survives, can still run even though it has to repay new debts, then there is still hope
for receiving profits after the crisis ends.
If all individuals, business entities, non-business organizations, and all parts of a
country can pass through the crisis period, survive and return to production, then in the end
the national losses will be covered. Because they will again be able to pay taxes, maybe even
more. it will also absorb new labor so as to increase individual income, which in turn will
also increase state income and boost the value of GDP.

3.3.1 Government Efforts in Handling the Economic Crisis During the COVID-19
Pandemic
Indonesia is a country that has a demographic bonus. Indonesia is also a member
of the G20 that represents the Southeast Asia Region. The government is making
efforts to face this demographic bnus era with one of its efforts, namely through
equitable distribution of the basic education sector for the Indonesian people by
providing scholarships from the Education Fund Management Institution (LPDP) of
1.3 trillion . In addition, the government also strives for equitable education in various
remote areas and for the less fortunate. With these efforts, the government can
indirectly improve the quality of human resources in Indonesia. Knowing that the
number of school-aged people up to 15 years has made the government responsible
for the education of the Indonesian people. However, at this time countries around the
world are facing the Covid-19 pandemic which threatens world economic growth.
Indonesia is a country that has a demographic bonus. With the demographic bonus,
Indonesia can design its economic development by taking steps to overcome the
economic crisis during this pandemic. Economic growth is currently slowing because
many workers have been dismissed as a result of their companies being temporarily
closed. This is in line with the issuance of regulations by the government to
implement the PSBB to prevent the spread of the virus. In addition, there are several
regulations made by the government to prevent the spread of the Covid-19 virus,
including:
1. The President ordered all ministers and regional leaders to cut the RAPBN (which is
not a priority) in the APBN and APBD
 2. Presidential Instruction Number 4 of 2020 Regarding Activity Refocusing, Budget
Realization and Procurement of Goods and Services in the context of Accelerating
Handling of the Corona Virus. This instruction instructs the central and regional
governments to reallocate their budgets to accelerate the prevention of the effects of
this virus.
3. The central and local governments ensure the availability of basic commodities and
ensure that people's purchasing power does not decline. This can be done by
providing financial assistance to the grassroots community.
4. The government supports the cash for work program to be reproduced but must
follow health protocols.
5. The government provides an additional fund of Rp. 50,000 for cheap groceries card
holders for 6 months. To run this program, the government has budgeted a fee of Rp.
4.56 Trillion
6. The government pays PPH Article 21 which has been paid by taxpayers for
employees in the processing industry
7. OJK provides a decrease in interest and a year-long delay in installments for loans
below IDR / 10 billion for MSMEs.

The various efforts above are deemed ineffective in reducing the bad effects of
this pandemic. Apart from the economic sector, Indonesia must also make efforts to prevent
bad impacts in various sectors, one of which is tourism. The government has made efforts in
the tourism sector, namely by offering cheap package packages to tourists. However, this
turned out to have received a lot of criticism from the public and health authorities because it
was considered to be gathering the masses and preventing the spread of this virus was
considered a failure. So that this program must be immediately responded to by the
government to be reviewed in order to prevent problems and upheaval in the community.
 CHAPTER V
CONCLUSION

It cannot be denied that the COVID-19 pandemic has caused a decline in economic
growth in almost all countries in the world, especially in Indonesia. This pandemic caused a
drastic increase in the unemployment rate because many companies were temporarily closed
as well as companies that ultimately could not survive the pandemic and went out of
business. The economic crisis has now become a major issue that must be resolved by the
central and regional governments because the economy is the basis of national development.
Some of the efforts made by the government include the President ordering all ministers and
regional leaders to cut the RAPBN (which is not a priority) in the APBN and APBD, then the
government guarantees the availability of prioritized social assistance for the middle and
lower class while maintaining people's purchasing power, and maximizing potential UKM.
However, these efforts are deemed ineffective in boosting Indonesia's economy, which is
slowly experiencing deflation. The community must also take part in the effort to rebuild this
weakened economy. Indonesia is one of the countries that has a level of productive age
population above average. The existence of this productive age population can be used to
develop Indonesia. This increasing number of workers can be utilized if they meet the
standards, namely being educated, skilled, and having a healthy body and soul. This must be
followed by governments that provide many jobs. That way, Indonesia will return to being a
productive country with an economy that will recover.
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