P-ISSN: 2827-9832

E-ISSN: 2828-335x

http://ijsr.internationaljournallabs.com/index.php/ijsr

289

POST-PANDEMIC ECONOMIC SYSTEM CHANGES

Nurma Tambunan, Rizkia Tiara Putri Gumilar, Laila Nurul Karimah

Indraprasta University PGRI, Indonesia

nurma.tamb@gmail.com

ABSTRACT

The pandemic is a lesson for all people in various parts of the world. This can be a stepping stone for

human development, it can also bring down some parties who are not ready to live it. The purpose of this

paper is to describe the changes in the economic system in Indonesia after the Covid-19 pandemic. The

method used is descriptive qualitative research with secondary data sources and documentation data

collection methods. Based on an analysis of data obtained from journals, books, and the internet in the form

of company records or documentation, government documentation or government publications, and industry

analysis by the media, websites, and others, it was found that e-commerce has an important role for the

Indonesian economy both in terms of actors businesses, consumers and governments.

Keywords: covid-19, pandemic, pandemic impact

This article is licensed under CC BY-SA 4.0

INTRODUCTION

The covid-19 pandemic has brought a lot of impact on lives around the world from various

aspects. After all, this is inevitable. Aspects affected by the pandemic include education,

economy and business, culture, technology, and politics. This makes the whole world,

including Indonesia, have to improvise to continue to live a normal life. There are so many

things that have to change because of the impetus of circumstances, including in the economic

and business fields.

Covid-19 has caused an economic shock that affects the economies of individuals,

households, and micro, small, medium, and large companies. It even affects the country's

economy with a national to the global scale of coverage (Taufik & Ayuningtyas, 2020). Some

economic fields that feel the impact and influence of Covid-19 are trade, investment,

transportation, and tourism (Ayu & Lahmi, 2020a).

During the pandemic, there was massive inflation in various fields. Many MSME traders

feel disadvantaged because of the buying and selling activities that they cannot do due to the

implementation of PSBB (Large-Scale Social Restrictions) which is valid from April 17, 2020,

to the latest Java-Bali emergency PPKM until July 20, 2021. As of September 8, 2020, there

have been 27,479,194 positive confirmed cases in the world, with 896,421 deaths. On the other

hand, they are terrified because more and more victims are falling, but they still have to make

ends meet.

Due to fear, a lot of information circulated about various ways to prevent Covid-19. Many

fierce drugs can prevent their spread. Finally, the drugs that were touted at that time became

trending and selling well in the market. This is an example of how Covid-19 has made people

fog up so that unexpected things happen and the economy becomes unstable. The price of

masks has risen by 100%, there is a lot of production of fake masks, illegal vaccines in

circulation, and so on.

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Information spreads quickly on social media like the speed of light, at a time when people

can't do anything, they end up spending time switching to playing gadgets. Looking for

entertainment, the latest information about the pandemic, cases that occur, looking for business

opportunities, etc. When there is economic instability in the space of society, the field of

electronic commerce attracts massive profits. The revenue of some of the world's retail

websites showed significant growth. Among the websites are Amazon.com which was able to

record sales of US$ 4.059 billion, also Ebay.com with sales of US$ 1.227 billion (Andrienko,

2020).

Initially, Indonesian people can be said to be unfamiliar with technology. It was even

recorded that the increase in social media use reached 54% during the pandemic (Zahra et al.,

2021). As a result, many e-commerce companies are trying to advertise their products through

anything so that people are interested in online buying and selling activities. As a result,

Indonesians have become accustomed to online buying and selling activities and so on. E-

Commerce makes it easier for business actors to reach buyers wherever they are (MADINAH,

2019). Not only as an intermediary in transactions, but also responsible for the marketing, sales,

delivery, and service processes for customers.

During the pandemic, there was a lot of culture shock experienced by people from various

walks of life. The students were unable to attend school, as usual, seminars were conducted

online, and office activities were carried out at home. This makes people become accustomed

to spending time in front of their gadgets all day long. As a result, online application users have

skyrocketed rapidly. All information circulates through the platform. Even many people have

become famous just because they make simple entertaining videos. Once famous they take

advantage of opportunities by continuing to make videos and open endorsements (advertising

products online). This is biased to open up huge business opportunities for those who have

been devastated by the pandemic. This kind of employment is also a very natural thing on

social media.

The pandemic has made humans improvise towards the best version of themselves. Caused

many good and bad effects on society. The biased economic system turns out to be very

conditional and feels passable again. Maybe now the pandemic is no longer an obstacle for

humans to continue to develop.

METHOD

The method used is descriptive qualitative research with secondary data sources and

documentation data collection methods. Based on the analysis of data obtained from journals,

books, and the internet in the form of company records or documentation, government

documentation or government publications, and industry analysis by the media, websites, and

others, it was found that e-commerce has an important role for the Indonesian economy both

in terms of business people, consumers, and the government (Ayu & Lahmi, 2020b).

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RESULTS AND DISCUSSION

Post-Pandemic in variouscountries experienced an economic crisis. The crisis caused by the

Covid-19 pandemic has developed in such a way and caused a contraction in the global

economy (Modjo, 2020). Unlike previous crises, it hit not only the demand side of the economy

but also the supply side of the economy. So its pressure on growth has become very much felt

in many countries. Various world financial bodies predict that the Covid-19 pandemic will

cause a contraction in the world economy by -2.0% to 2.8% in 2020, from previously growing

by an average of 2.9% in 2019. At the same time, the Covid-19 pandemic is also expected to

reduce global trade and investment flows by 30%, as well as increase the volatility of world

financial markets by up to 215%. The drastic reduction of global economic activity is in turn

expected to result in no less than 195 million people losing their jobs and between 420 and 580

million people falling into poverty. In 2020, the economy in the world suddenly deteriorated

due to the pandemic that killed the course of business processes in almost all sectors. Based on

the Ministry of Labor's survey at the end of 2020, many companies were directly affected by

the pandemic with data on 88% of companies registered (Disty et al., n.d.). Retail companies

are indeed most affected because there is a decrease in market demand, production, and profits

that occur in the company. Nevertheless, most companies still employ their workers. There

were only 17.8% of companies that imposed terminations, 25.6% of companies that laid off

their workers, and 10% that did both. From here, there began to be changed in the way

companies worked, such as the enactment of work-from-home / teleworking which became the

main choice for companies, so that it became more flexible even though the efficiency of the

number of workers and wage reductions became inevitable. This has also caused some

companies to start not using physical offices to reduce costs because it has been facilitated with

Information and Communication technology.

The Covid-19 pandemic has greatly affected the Indonesian economy starting at the

beginning of the second quarter of 2020. This is due to the existence of regulations on Large-

Scale Social Restrictions (PSBB) to cause lockdowns in several cities aimed at breaking the

chain of the spread of Covid-19. This regulation has led to an increase in the decline in

commercial in formal and non-formal companies. The economic downturn led to the

emergence of layoffs caused by companies not being able to pay their due wages. Not only

that, but this decline caused many companies to decide to go out of business or go bankrupt.

The contraction was caused by a decrease in consumption. In addition to consumption for daily

needs. Consumption income from the air transportation sector is very influential with the

contraction experienced during the pandemic. The existence of PSBB regulations causes

limited people to be able to travel through air transportation. It can be seen that revenue in the

air service sector has decreased by more than IDR 200 billion. The limited use of air

transportation has resulted in foreign and local tourists being unable to carry out tourist visits

in Indonesia. This has a huge impact on the city of Bali where their income is quite a lot from

tourists who are visiting judging from the income of hotels and restaurants which decreased by

about 50 percent from usual

Due to the Covid-19 pandemic in 2020, economists consider deflationary conditions to be

very reasonable. Rising unemployment and falling Consumer Price Index (CPI), contributed

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to deflation. Indonesia actually experienced deflation with an inflation rate of 1.68 percent, the

lowest globally & far below the Government's target set in PMK No. 124 / PMK.010 / 2017.

As an open country, Indonesia's economy is not immune to the world turmoil caused by the

Covid-19 pandemic. Various international economic bodies such as the World Bank estimate

that this pandemic will erode national economic growth to only be in the range of -3.5% to

2.1% in 2020. In line with the World Bank, the IMF also projects Indonesia's economic growth

of 0.5% in 2020. This is clearly a sharp correction of the 5.02% growth rate recorded in 2019.

Similarly, from a socioeconomic perspective, some institutions expect an additional 1.16

million (+0.44%) to 9.6 million (+3.6%) of the poor in 2020, which depends on the degree of

economic damage that will occur. Likewise, the number of unemployed is expected to increase

by 2.91 million (2.17% of the labor force) to 5.23 million (3.79% of the labor force) in 2020.

Indonesia is faced with many problems related to economic aspects due to Covid-19. The

economy in Indonesia in 2020 is expected to grow negatively, and unemployment and poverty

rates increase. Based on year on year calculations, economic growth in the first quarter of 2020

showed a weakening by only reaching 2.97% compared to the achievement in the first quarter

of 2019 of 5.07%. Data in the second quarter was also less than friendly, showing a deep

pullback of -5.32%, the worst since 1999. Data in the third quarter experienced a contraction

in growth of 3.49%, while in the fourth quarter it experienced a growth contraction of 2.19%.

The impact of the decline in the percentage of the economy in Indonesia, one of which is the

increase in the unemployment rate and the poor population caused by layoffs during the Covid-

19 pandemic.

Indonesia was hit by supply and demand shocks at the same time. The enactment of PSBB

regulations has caused an increase in unemployment which has resulted in a supply shock. The

vagueness of the government's actions in issuing economic policies that can relieve citizens

resulted in a demand shock that caused a loss of income for the affected individuals. This

demand shock condition caused a loss of state revenue in 2020, due to contracting demand and

a reduced economic surplus. In addition, people's purchasing power that is reduced due to

falling incomes causes many investors to hesitate to invest until things return to normal.

In an effort to recover the country's economy due to the Covid-19 pandemic, fiscal and

monetary policies are two policies issued by the government as a solution to deal with the case.

This strategy is implemented through collaboration between local governments and

communities because both play a crucial role in ensuring the smooth implementation of

policies aimed at reviving the Indonesian economy. The government conducts fiscal policy in

the hope of reducing the negative impact on the Indonesian economy caused by the Covid-19

pandemic. In addition, this policy aims to revive the business of business actors, including

MSMEs. Fiscal policy has 3 (three) stimuli as a movement of change, namely:

1. Acceleration of Government spending

The government accelerated the disbursement of capital expenditures, accelerated the

appointment of state treasury officials, carried out tenders, and accelerated the disbursement of

social assistance expenditures and transfers to regional and village funds. The purpose of this

acceleration is to be able to adapt to new habits gradually, solve problems that occur after the

pandemic, and strengthen reforms to get out of the middle-income trap.

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2. Income tax relaxation

The government alleviates the amount of tax by bearing Article 21 income tax, exemption

from import of income tax contained in Article 22, reduction of Article 25 income tax, and

expedited VAT refund. In addition to the relaxation of income tax, the government simplifies

and accelerates the import-export process. Acceleration of import exports is prioritized for

leading traders, simplification of funds for reducing export and import restrictions

(manufacturing, food, and medical support), and export-import services through the national

logistics ecosystem.

3. National economic recovery by implementing State Finance policies through

relaxation of the State Budget.

The relaxation of the state budget prepares a deficit that can exceed 3 percent with the goal

that in 2023 it will return to the maximum level of 3 percent. Relaxation will relate to the

allocation of spending between organizations, between functions, and between programs and

mandatory spending. Relaxation of allocation or reallocation of Local Government

Expenditure, Lending to LPS, Issuance of SUN and SBSN to be purchased by Bank Indonesia,

SOEs, corporate investors, and/or retail investors. The use of alternative budget sources

includes SAL, education endowments, and funds managed by the Public Service Agency.

The Government's monetary policy is in collaboration with Bank Indonesia (BI) to

participate in optimizing various accommodative monetary and macroprudential policies

aimed at accelerating the digitalization of Indonesia's payment system to support economic

recovery efforts. The government implements monetary policy as follows: maintaining the

Rupiah exchange rate policy to maintain exchange rate stability in line with the currency's

fundamental value and market mechanisms, strengthening the monetary operations strategy to

strengthen the effectiveness of the accommodative monetary policy stance, strengthening

prime lending rate (PLR) transparency policy with an emphasis on raising interest rates on new

loans, extending the policy of reducing the value of late fees. credit card payments of 1 percent

of outstanding, accelerating money market deepening programs through strengthening the money

market regulatory framework and implementing the Electronic Trading Platform (ETP)

Mulitimatching, especially the Rupiah and foreign exchange money markets, as well as

facilitating trade and investment promotion and continuing to socialize the use of Local

Currency Settlement (LCS) in collaboration with relevant agencies.

Monetary policy aims to ensure that global economic performance continues to improve as

expected, amidst lower global financial market uncertainty. This is due to the pandemic so the

Indonesian exchange rate has decreased drastically in 2020. However, the monetary policy

provided by the government will strengthen the Rupiah exchange rate in line with the return of

foreign capital inflows. It can be seen that at the beginning of the third quarter of 2021, the

Rupiah exchange rate strengthened by 0.49 percent on average and 0.30 percent (pp) compared

to the May 2021 level.

The Covid-19 pandemic greatly affected the Indonesian economy in 2020. This pandemic

has resulted in a decrease in all components of gross domestic product (GDP) except

government consumption expenditure. The gross domestic product (GDP) component has

decreased and even contracted due to the Covid-19 pandemic entering Indonesia so Indonesia's

economic growth is included in the crisis category.

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The economic crisis can be seen from the contraction of gross domestic product (GDP)

growth of 2.19 percent (y-on-y). The most influential components are household consumption

expenditures and consumption expenditures of non-profit institutions serving households, both

of which have decreased due to government policies on economic recovery efforts at this time.

Therefore, the Government conducts policies in various aspects to advance the Indonesian

economy. The government is more focused on fiscal and monetary policy. Fiscal policy taken

has many varieties, one of which is tax incentives which are very influential. Tax incentives

make people feel relieved of their obligations and do not affect their economy so that people

can still meet their living needs as before.

Not only that, the Government cooperates with Bank Indonesia to advance monetary policy.

This policy aims to reduce the amount of money in circulation and interest rates in banks. When

interest rates decline at that point, investors reinvest their holdings.

All policies that have been designed by the Government have the aim that income output on

GDP can return to its original state and increase, not only that another goal is for Indonesia to

experience inflation again and for the unemployment rate in Indonesia to decrease.

It can be concluded that the economy in Indonesia based on the current facts is getting better

due to the draft policy from the Government. Indonesia experienced economic growth (GDP)

of 3.69 percent throughout 2021, higher than in 2020 which had contracted. Indonesia's

economic structure is spatially dominated by several provinces on the island of Java as the

largest contribution and rapid improvement in economic performance.

Indonesia's Economic Condition in the Midst of the Covid-19 Pandemic

1. Economic Conditions in Certain Countries Due to Covid-19

The impact seen from the existence of Covid-19 does not only affect public health but also

affects the economy in various countries. Even today the world economy is experiencing severe

pressure caused by the virus. The world economy in certain countries such as Indonesia, the

United States, Japan, South Korea, Hong Kong, the European Union, Singapore, and several

other countries experienced negative economic growth in the first and second quarters of 2020.

The Covid-19 pandemic caused negative effects from health to social problems and continued

to the country's economy.

2. Economic Data in Indonesia in 2020