Volume 03 Issue 05-2023
1
International Journal of Advance Scientific Research
(ISSN
–
2750-1396)
VOLUME
03
ISSUE
05
Pages:
01-11
SJIF
I
MPACT
FACTOR
(2021:
5.478
)
(2022:
5.636
)
(2023:
6.741
)
OCLC
–
1368736135
A
BSTRACT
The scope of Indonesia's recession during the COVID-19 outbreak, which has been going on for nearly a
year, was the subject of this paper. This study centers around the public authority's endeavors to determine
this emergency through arrangement and system to limit the conversation. To achieve the objective of this
review, we initially accumulated primer perusing material by perusing articles on downturn brought about
by pandemics to get adequate review plan-related data. We then go over the various means by which we
can convey an understanding of the recession and its causes after the opening section's conclusion. After
that, we proceed to the middle of the study to select the most significant results. We declare that the
findings of this study are legitimate and solid before completing the results. The findings can be
summarized as follows, last but not least: The recession has had an impact on the national economy, so the
government has decided to give additional money to the most affected individuals as a boost. Another
strategy used by the government is to collaborate with third parties to create procedures for dealing with
the possibility of a domestic recession and anticipating Covid-19.
K
EYWORDS
COVID-19; decline in Indonesia; pandemic; recovery strategy; inspect strategy.
Journal
Website:
http://sciencebring.co
m/index.php/ijasr
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Research Article
HOW DANGEROUS WAS THE CORONAVIRUS PANDEMIC
THAT CAUSED INDONESIA'S DOWNTURN?
Submission Date:
April 25, 2023,
Accepted Date:
April 30, 2023,
Published Date:
May 01, 2023
Crossref doi:
https://doi.org/10.37547/ijasr-03-05-01
Merpati Miharjaa
Stie Manajemen Bisnis Indonesia, Indonesia
Volume 03 Issue 05-2023
2
International Journal of Advance Scientific Research
(ISSN
–
2750-1396)
VOLUME
03
ISSUE
05
Pages:
01-11
SJIF
I
MPACT
FACTOR
(2021:
5.478
)
(2022:
5.636
)
(2023:
6.741
)
OCLC
–
1368736135
I
NTRODUCTION
The Corona virus or COVID-19 pandemic, which is
now in its first year, continues to pose a threat to
all human activities and the global economy, as
well as to the development and property of the
Indonesian economy. According to the most
recent data released by the Ministry of Economy,
this disruption to the economic process still tends
to decrease by quite a bit during the second
quarter. In the same way, experts always say that
the Indonesian economy could go down in the
next quarter if the pandemic subscription doesn't
get better. At the same time, the Indonesian
economy may experience a constant potential
decline in the fourth quarter
—
specifically from -
2.9% to -1%
—
if the management of a plague does
not provide reason for optimism. Experts
recommend that numerous parties, including
economic aid and donor agencies, be involved in
the land's recovery in order for the economy to
emerge from this recession.
An effective strategy for halting the spread of the
pandemic virus is to implement government
policies supported by medical professionals
regarding the efficacy of health protocols during
the initial outbreak of COVID-19. These policies
include social isolation and imprisonment.
However, in the long run, this policy will cause
economic development to be disrupted wherever
public quality is restricted, rendering the wheels
of the economy and business inoperative. On the
other hand, the government's ability to manage
the decline in corona virus cases in the future may
be hindered if it does not collaborate with
alternative parties as the party providing support
and assistance. As a result, the economic decline
will have a greater impact, particularly on the
domestic economy. In order to prevent this from
happening, it is necessary to organize from the
beginning with the government, the public,
businesspeople, and medical professionals,
particularly with the participation of outsiders
who are demonstrated capable of overcoming the
pandemic (Valdés-Floridoet al., 2020; 2020;
Darlenski and Tsankov Sudiartini and others,
2020). The primary choice for Indonesia's
strategic policy, which is still in an unsustainable
state of development, is the collective
recommendation of medical and economic
officers to market cooperation across experience
and practitioners that support from several
domestic and transnational parties to slow and
handle the unfolding also, on restoring the impact
of COVID-19, particularly economic recovery. The
Indonesian government must come up with
creative ways to make the most of all the
resources at its disposal and foster regional and
international cooperation if this is to be
implemented. To make room for a variety of
needs, resources, and human resource capacity to
deal with this pandemic and economic disruption,
including health technology. So that the land can
fight COVID-19 while simultaneously overcoming
the economic downturn.
Since the pandemic struck Indonesia's economy,
it is impossible to avoid a recession if the national
economic process continues to be negative for
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(2023:
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many quarters in a row. Steady with a few
monetary examinations and business financial
cycle, this public downturn's effect is on customer
exchanges, and employment misfortunes, trailed
by a reduction in the undertaking because of
occupants generally disapprove of monetary
benefit issues. Another study also stated that if
the recession continued, it would be difficult for
the country to recover; possibly taking longer
than when the pandemic first struck the economy.
Compared to the downturn that occurred at the
height of the New Order era in 1998. Land was
unable to emerge from its recession for five years.
Another study also stated that it was anticipated
that the economy would shrink by 5.32 percent in
the second quarter of land.
The previous recession prediction has been
revised by the government; the most recent
forecast for 2020 indicates that the recession will
persist between -0.7% and -0.6%. On many
events, the public authority keeps on giving
certainty that the downturn won't proceed. It
indicates that production activities are
decreasing, or negative, and that this trend is
likely to continue into the fourth quarter
—
roughly zero percent
—
indicating an increase in
economic activity or positive. The Indonesian
State Budget Law program results for 2021 may
be used by the government as another option.
With forecasts going from 4.5% to 5.5% with a
gauge of 5.0%. If numerous studies support the
government's prediction, it is accurate. Take, for
instance, Triggs et al. 2019); According to a study
by Purwanti (2020), the Organization for
Economic Cooperation and Development (OECD)
anticipates that Indonesia's economic growth will
be 5.3 percent next year, followed by the Asian
Development Bank's growth of 5.3 percent and
Bloomberg's growth of 5.4 percent. However, if
the problem and the way COVID-19 is managed in
the country showed a downward trend, what
happened was less than expected. This indicates
that the COVID-19 case data play a crucial role in
determining everything
—
whether it decreases or
increases will have an effect on domestic
economic and business activities and eventually
result in a significant recession.
The creators notice different public news media
that financial development presently will in
general be negative until the second from last
quarter. Low consumer purchasing power
activity pointed to this unusual growth. During
the lockdown, when customers were still
shopping for groceries and other essentials, this
symptom persists. Even some families with low
incomes continue to rely heavily on government
assistance, such as direct cash assistance and
Ministry of Social Affairs assistance. As a result,
there is no rotation of money, no economic
activity, and very little spending occurs. To break
this cycle, the government will unavoidably make
investments in subsidies and provide assistance
to consumers with domestic consumption in
order to lift individuals out of trouble or a
recession. This approach is consistent with the
findings of Adeniran & Sidiq (2018), who
comprehend the causes of economic recessions
and offer suggestions for navigating the Nigerian
case in the context of global socio-economic
studies. so that later, the government can emerge
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(2023:
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)
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from a difficult recession this year, as evidenced
by a 5.32 percent decrease in gross domestic
product in the second quarter of 2020.
The aforementioned recession scenario turns out
to be more severe than the government's forecast,
which is frequently expressed by Bank Indonesia
and in speeches given by cabinet ministries,
particularly by ministers who are most familiar
with updates on COVID-19-related financial
developments. According to national media
reports, the estimated decline in the second
quarter's gross domestic product will be -3.8%,
which is slightly lower than Bank Indonesia's
forecast of -4.8% economic recessions. For this
situation, somediv determined the public
monetary downturn in the second quarter of
2020 on a year-on-year premise by contrasting it
with the downturn in the very quarter in 2019
that is shrunk by 5.32% before the pandemic
disturbed. The second quarter's national
economic growth also decreased by -4.19 percent
when compared to the first quarter of 2020 or
quarter on quarter. Altig et al. conducted the
following research regarding the recession:
2020), who investigated the relationship between
the pandemic's uncertainty and economic growth
and recession.
Baldwin and Weder di Mauro (2020), evaluate the
condition of the economy in Corona virus and
connected with a few nations that will before long
experience a serious monetary downturn
assuming there is a constriction in their particular
nation's GDP. If growth conditions in the second
quarter decline, it is evident that Indonesia will
become one of the Southeast Asian nations
hardest hit by the recession in the third quarter.
This condition is relevant to the findings of
Resosudarmo & Abdurohman (2018), who
questioned whether Indonesia would experience
a significant recession if the 5% economic growth
rate was considered to be normal. Similarly,
Cranfield (2020) suggests that a recession is
imminent due to low consumer demand for
necessities during the pandemic. The argument
goes that, unless they can no longer afford it due
to difficult financial conditions, no consumer can
hide behind their food needs and other primary
needs.
If Indonesia experiences negative and negative
gross domestic product growth for two
consecutive quarters in the subsequent quarter,
understanding the extent of the recession will be
repeated. After that, the recession has occurred.
However, it could be considered a severe
recession if the fall is extremely deep and varies
in size from year to year. So this information
builds up the event of a downturn in light of the
fact that the drop is very critical. After all,
returning to positive in the subsequent third
quarter is not easy. In this way, Indonesia is
taking the development of the first-quarter total
national output at 2.97%. It will read -1.7% with
a downward trend forecast for the third quarter.
Be more insistent; If the Indonesian economy
goes into a deep recession, there won't be many
jobs in the future. That's a clear sign of the current
recession.
In today's education, it is crucial to comprehend
how the COVID-19 recession and depression
cause excessive anxiety as many citizens lose
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(2023:
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)
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regular income or shut down their businesses and
livelihoods. Many regions or nations must
survive, but frequently the nation or society is in
a difficult situation and is overly anxious to
contemplate and live a future that is always
dominated by fear. Then, at that point, this dread
will, thus, make it hard for buyers or the local area
since they must be ready to live with short
expenses and business exercises that need to
stifle speculation, which at last outcomes in
additional financial slack from the state and
society who are more ready to adapt to the effect
of downturn because of pandemic disturbance.
The condition of the stock market, which shows a
fluctuating trend from a sudden high to a low
from before the COVID-19 outbreak until the
middle of the year, when Indonesia entered a new
normal, is the next thing that most often occurs
when the country experiences a recession. The
stock market owns as quickly as other institutions
do, which is easy to understand. A government
that is determined to end an almost never-ending
recession by enacting policies that prevent it from
happening again, like when the New Order
collapsed in 1998. The government is working to
ensure that the current financial system no longer
poses a threat. However, the current state of
affairs is strikingly different: tens of millions of
Indonesians are forced to receive direct subsidies
like the direct cash payment (BLT) and assistance
from the social ministry as a result of
unemployment, while millions of others have no
idea what to do when Indonesia experiences a
national recession.
M
ATERIALS AND METHODS
The essential target of this survey was to decide
the way that terrible the Indonesian economy was
in downturn after the Coronavirus pandemic,
which has been influencing impacted countries,
including Indonesia, for close to 12 months. We
wanted this study to focus on national policies
and strategies used to recover from this huge
recession. To achieve the objectives of this
review, we began by perusing various related
articles and refering to them to get data and
information that are applicable to the current
subject. We then, at that point, give an outline of
how we might interpret downturns and their
causes
subsequent
to
composing
the
presentation. After that, we finished the main part
of our study and decided what to make of the
results. After that, we look over the results to see
if they meet the validity and reliability
requirements. We believe that our study method
is correct, as demonstrated by Flick (2013), who
has developed his book into a guidebook for the
study of qualitative analysis of SAGE, industrial
activities for the journal, and other publications.
R
ESULTS AND DISCUSSIONS
Downturn arrangement
The public power's undertakings to overcome the
slump strangely were through the Help of Cash
draws near. For instance, the public authority
ought to increase direct assistance in order to
initiate the spending plan from post-public
financial recovery (REN). This time, the program
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got a huge amount of IDR 695.20 trillion, which
was disseminated gradually to the Coronavirus
impacted populaces. Due to the nature of the
stimulus budget, the government must ensure
that it achieves its implementation objectives.
Furthermore, it harvests the field's elements. The
public authority should also communicate the
rationale for the subsidizing assistance,
particularly the understanding that the boost
reserves are intended to ensure that the
community only needs to survive and is not
valued. funds for stimulation in response to the
causes of the Covid-19 pandemic; all gatherings
should understand the meaning of help reserves
while endeavoring to get away from the
downturn and return to past standards.
How quickly will Indonesia emerge from the
recession? The nation was severely affected by a
financial crisis in 1998. The public authority's
recuperation from that emergency required over
five years. Because, if guided by the experience of
the recession, the nation may face an economic
emergency during the fall of the New Order, the
development period to fully recover from the
effects of COVID-19 on the recession is probably
going to span multiple periods of governance. As
a result, Olivia et al.'s study As the nation has
previous experience with crises and recessions,
the Indonesian government will implement this
strategy in 2020 to combat the COVID-19
recession. The study of Indonesian economic
studies regarding knowledge of these two
significant events is significant and beneficial
because the impact of the COVID-19 pandemic is
comparable to that of the crisis in 1998.
Indonesia's largest economic crisis was the
monetary crisis that lasted from 1997 to 1998.
Only a small number of sectors desired an easy
government response to the financial crisis of
1998. Be that as it may, Coronavirus caused the
emergency and downturn this time, influencing
all businesses. All things considered, the
government appears to have anticipated a
pandemic-driven
downturn
with
various
strategies, a significant allocation of funds for the
recuperation program impacted by unrestricted
and concurrent monetary assistance, and a
significant spending plan for treatment and care
for Corona virus survivors. It acknowledges the
government's bravery in enacting regulations to
reduce the State Revenue and Expenditure
Budget deficit, which could exceed 3% for three
years. It should be valued as a method by which
the public authority can recuperate from a
downturn whose term is obscure.
Financial plan support
This frightening eruption of Covid has truly
imperiled more open monetary plans in many
affected countries. Due to soaring spending to
overcome and anticipate the outbreak's effects,
the Indonesian government anticipates that the
budget deficit will continue to soar above the 4%
deficit that is typically invested in every budget
start. Conversely, the government provided an
official guideline expressing that the financial
plan deficiency for 2020 is expected to be IDR
1.03 quadrillion, or roughly 6.34 percent of Gross
domestic product. This indicates that the fiscal
deficit is greater than twice the standard budget
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limit. On the other hand, as a result of the
pandemic's response to declining production and
exchange, the country's pay has also decreased
completely.
They were referring to a number of experts who
had suggested that the government's perspective
could be the key to overcoming the recession
brought on by Covid-19. Experts say that the
government was asked to stop using a separate
policy on the effects of the pandemic for the
cabinet for the economy and the ministry of
health to solve the economic recession. For
instance, because health and the economy both
have an impact on one another, the government
cannot, through its cabinet, prioritize health over
the economy. In order to end a recession, we must
adopt a viewpoint that is broadly supported by
policymakers. Because the COVID-19 pandemic
has had an impact on both the supply and demand
sides, which has a financial impact, there are
times when it is also necessary to be assertive
when putting unconventional policies into effect.
The public authority has gotten roughly US$1.8
billion (Rp.26.3 trillion) in financing from
different countries to determine the Coronavirus
downturn until the center of 2020. For example,
Japan's guide has reported the dispensing of 50
billion yen (Rp. 6.9 trillion), supporting the
monetary downturn and helping the public
authority in beating the impacts of the general
wellbeing pandemic. This kind of assistance has
an interest rate of 0.01% over the course of a 15-
year tenon. However, there is a great deal of risk
associated with this kind of debt assistance with
other governments. Thus, the public authority
should practice intense watchfulness while
acquiring unfamiliar advances, in any event, for
unobtrusive totals.
Non-funding assistance
There is more to economic recovery than just a
financial plan. The public authority managing the
downturn has also benefited from the association
of specialized assistance with various methods
from related partners, in this case, domestic
assistance and unfamiliar specialized assistance.
Because it has a lot of cooperative relationships
with a lot of parties from other countries,
Indonesia needs to take into account the interests
that have a positive effect on the recovery of its
economy. The government will finally be able to
learn from other nations' experiences during the
technical process that will be carried out in
Indonesia. In a number of nations, recovery
efforts have been evaluated and recovery
programs have been implemented. In order for
Indonesia to expand the specialized scope of
monetary recovery in a manner that is both
convenient and defined, an evaluation of such
strategies and experiences will serve as an
important reference.
It is essential to provide an illustration of the
manner in which the Australian government has
shared its experiences with a few nations in Asia,
providing yet another standard strategy for
resuming work and restoring the economy.
Australia's
parliamentarians
frequently
explained how their policies would restore the
economy that was affected by Covid-19. For
example, Australia's act of appropriating interior
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supports in two ways
—
to the focal and state
levels
—
with the goal that they can be dispersed
all the more rapidly and unequivocally. After the
lockdown, the Australian government shares its
strategy for organizing financial strategies for
business activities. Since the COVID-19 outbreak
began in Indonesia at the beginning of 2020, the
Australian government has actively responded to
the outbreak with three steps of economic
assistance packages worth 260 billion Rp (A$).
2,783 trillion), or 13.3% of the GDP of the nation.
To boost Indonesia's economy and encourage
business investment, the first package is being
prepared. The second package includes
preparations and packages for household
assistance in order to guarantee a steady flow of
loans. The third package focuses on programs
that support businesses and reduce layoffs. The
allocation of the National Economic Recovery can
be seen in Australia's three actions. As stated
earlier, the budget is IDR. The Ministry of Central
Institutions and Local Government, COVID-
related health issues, workforce social security,
SMB incentives, corporate finance, and 677.2
trillion were added. There isn't a single country
that knows exactly how to recover from COVID-
19's effects. However, it is crucial for Indonesia to
share and experience successful stories with
other nations in order for Indonesia to take steps
and implement policies to improve the economic
recession through a variety of assistance.
Economic diplomacy
The public authority should focus on the premium
of recuperating the public economy using
monetary tact abroad, especially with well
disposed countries with close state relations in an
assortment of monetary, monetary, speculation,
and other asset improvement fields, to recuperate
from a financial downturn welcomed on by
various emergencies. The nations that have the
advantage of contributing and are willing to share
their experiences in a variety of ways to restore
the national economy, including cooperation in
diplomacy to boost each nation's economic
capacity, are essential. The COVID-19 outbreak
has increased public awareness in numerous
nations. As strategic trade partners, some
countries are now providing them with a lot of
assistance to help them get through the crisis,
especially when there are issues with imports and
exports.
For instance, Indonesia could promote the
possibility of alternative partners for the same
product in the fight against the COVID-19
outbreak by taking advantage of the international
community's need for mask supplies from Asia.
Specifically, the country's conciliatory objective is
to cooperate to meet the world's medical care
needs and carry out an emergency recuperation
program for each accomplice country with the
goal that the world local area acknowledges
Indonesia as an accomplice in exchange
discretion and other long haul programs. Nabbs-
Keller (2013) asserts that Indonesia's foreign
ministry could be reformed to express its ideas,
organizational role, and leadership diplomacy. It
suggests that economic diplomacy is a major
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component of Indonesia's global relations
through the foreign affairs ministry. This suggests
that Indonesia may view all of its Southeast Asian
partners as a strategic power.
By allowing other nations' banks to collaborate
with Bank Indonesia, Indonesia can improve the
economic standing of the country and encourage
speculation and exchange on both sides of the
exchange. Indonesia acknowledges that regional
cooperation can be used to maintain other
relationships of interest during times of
prosperity as well as during times of crisis and
economic recession brought on by COVID-19 if
there is a strong sense of unity between nations.
D
ISCUSSION
In this section, we will discuss the findings of
research conducted to determine how severe
Indonesia's economic recession was as a result of
government policy efforts to halt the spread of
COVID-19. We will concentrate on efforts to
escape the recession, which has been ongoing for
nearly a year. The first thing we can say is that the
stimulus money provided by the government can
be used to help the most affected communities get
out of this economic recession. According to
Indrawati & Erliyana (2017), the government
funded this solution with approximately IDR
695.20 trillion from the state budget and
designated it as a national recovery assistance
program. When it comes to the policy strategy
that will be utilized by the government in order to
bring about a recovery from the recession, the
decision made by the government is in line with
numerous previous studies. According to
Indrawati and Erliyana (2017), the role of the
government in monetary recovery is extremely
important due to the fact that the public authority
is the party with the most expertise, assets, and
power, as well as responsibility for the local
government's assistance in preventing Corona
virus and ensuring a prosperous life.
The mere distribution of enormous resources
does not guarantee prompt results. A recession
that has very different characteristics and causes
from the economic slowdown in 1998, when the
New Order regime fell, requires hard work and a
relatively long period of time to truly recover.
Foroni and others 2020), they guess that the
experience of recuperating from a downturn
welcomed on by Coronavirus will act as a wake up
call about how troublesome it very well may be to
deal with one's funds after an emergency,
particularly one in which the recuperation cycle
isn't generally so direct as the reason for the
emergency. This demonstrates that it will require
some investment before results are gotten. The
recession recovery strategy requires the initial
provision of fresh budget support. In order to
withstand the effects of the recession, this budget
boosts the community's emergency needs.
According to Botta and co. (2020), the recovery
from crises and recessions brought on by COVID-
19 may take the form of giving money to the
community to help the people's economy grow.
These assets can come from bonds or obligations.
Non-monetary assistance is provided by various
systems and approaches. For instance, the
transfer of information from nations that have
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previously emerged from the same recession
(Akhtaruzzaman et al., 2020). It is essential to
distribute new funds. In any case, the nation has
recuperated rapidly from the downturn on
account of other non-monetary help gave during
the Coronavirus emergency, like global
participation. Deploring the economy is another
possible strategy for Indonesia to recover from
the financial crisis. Gerard et al. ( 2020), express
that non-industrial countries like Indonesia have
the choice of having created countries safeguard
their social obligation from the downturn
emergency welcomed on by Coronavirus. A
thorough examination of the extent to which the
response to COVID-19 has impacted the decline of
the national economy and caused severe
economic harm led to these conclusions.
C
ONCLUSION
As stated at the top, the goal of this study is to
determine how bad Indonesia's recession caused
by the COVID-19 pandemic is. This study
examines the public authority's strategies and
procedures for recovering from Indonesia's
economic downturn, which has been ongoing for
nearly a year. The process of allocating existing
resources, such as funds and other support,
through national policies is known as the
economic recovery effort. The goal is to prevent
people who are impacted by business and
investment from going bankrupt as a result of
difficult financial conditions. For the economy to
quickly recover from the recession, this
necessitates that the government allocate existing
resources.
The first effort by the government to end the
recession is to provide fresh stimulus funds to
citizens who are most affected by COVID-19. This
is one of the actions that the government has
taken in this regard. The second option is to
provide stimulus funds in time for the recovery of
the recession, following the estimated pandemic
recovery period. Thirdly, recovering funds from a
recession is crucial. Accordingly, the public
authority should be adequately valiant to take
this sum, in spite of the way that doing so would
be dangerous given that it depends on advance
assets from giver associations and different
nations. Fourthly, assistance from any party in the
form of non-monetary donations or the transfer
of expertise and technical knowledge so that
experienced foreign parties and Indonesia can
share recovery strategies and experiences.
Finally, financial tact with other nations that will
work together with Indonesia during this
downturn.
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