The Covid-19 pandemic has had a significant impact on many sector in Indonesia. Not only in Indonesia but also other developing countries that are investing more in productivity. The virus is giving many challenge and effort to every country, how to organize and drive change on each aspect. When the covid-19 outbreak continue to spread across the world, it is essential to know potential impact on each sector in economy. Restrictions on movement and suggestion to stay at home may reduce the number of covid-19 cases but also give pressure to economic growth. On the other hand, if government doesn’t restrict interaction and mobility among people, may lead more intensive community interaction and mobility. This could increase consumption and production activities, but that would be likely to lead a new covid-19 cases. It’s such a dllemma that made a lot of people think twice.
Government rule limit the economic activities of production, distribution and consumption. In many countries, where covid-19 cases going up, lockdown is become ultimate decision to reduce virus transmission. As a result, economic growth denote negative number at minus 1%. Lower economic growth may lead to higher unemployment, larger social spending and larger fiscal deficit. Based on world bank data, Indonesia inflation rate show 2,0% on 2020. During the lockdown phase, the pandemic can affect supply and demand of certain product. Other factor is dependence on employment in the production process. Panic buying and hoarding ensue (mask, oxygen and medical items) also become an issue related to inflation rate.
An Overview of Sectoral impact
A major impact differs greatly from sector to sector in a country around the world. Tourism become the hardest sectors which sufferering from pandemic. Hotelts, restaurants, tour operators, cruise and airlines company have suspended their operations as an impact from major losses of commuting. Manufacturing, agriculture, transport and education are also struggling with these condition. Food retail is particularly affected because many shops, market or department store have been closed as a result of pandemic. Other than that consumption of certain goods has decline.
Food industry receive a particularly high burden because they have to concern about food availability and food safety. Construction sector also sensitive to economic cycles because it depends on economic activity resulting from the pandemic. The incline of covid-19 cases give huge duty to health workers, the backbone of health system. The pandemic really demolish our lives in a blink of eye.
The Impact on Food Security
Since the beginning of pandemic, food supply and food demand seems didn’t change significantly. Panic buying may change supply chain and temporarily affect on price of the commodities. Ensuring food supply chains will be crucial in securing food supply and preventing food crisis in a countries. Suggestion to stay at home may prevent farmers for working and reaching market to sell their products. In some region in Indonesia, traditional markets are close for several days to sanitize and prevent virus transmission.
Pandemic also give huge impact on labour intensive crop production because labour shortages and temporary production discontinuation. Plantation and industrial workers in export oriented industry also got an negative impact. Some factory have to cut the annual target production and decide to day off some employee to obey government rule. On demand side, economic uncertainty has been high during pandemic which indicates that people are limiting on household spending. Now people are prioritizing on basic needs rather than secondary product such as manufacturing product.
When pandemic is starting to spread, meat processing sector continuing get pressures both from demand and supply side. Significant decline in the demand side of meat and processed meat. This has resulted in an over supply and lower price of livestock. Some chicken farm willing to sell their product in a low price because no demand and high production cost.
The Impact on Health Sector
In history, a deadly virus has attact the entire global economy and bring many changes in some aspect. This pandemic reminded all of us of the vital role of health workers protect, relieve suffering and save lives. Covid-19 has exposed health workers and infected their families. Infection among health workers are far greater than general population. In addition related to psychological risks, health workers have to work for long hours, living in fear because recently contact with patient, separated with family. It make extraordinary psychological stress.
Improve mental health and well being, protect from any violence in workplace, secure health workers with injected vaccine and ensure a functioning health system become some support to facing the pandemic.
Which Sector that ‘safe’ to optimized?
There is two sector should be optimized during pandemic in Indonesia. First, agricultural sector which give big portion to Gross Domestic Product (GDP). Data from Central Bureau of Statistic in Indonesia, agricultural sector contribute 13,53% to GDP (in 2017) and continue to grow 1,15% in 2018. Agricultural product which has exported also become major factor of increased agricultural sector contribution. On the other hand, agricultural sector provide basic needs and it has stable price and stable demand. Every inhabitant want agricultural product as primary need. From the agriculture sector, indonesia could take advantage to transform economy. Moreover, agricultural workers work in outdoor area so the workers can keep distance from another. This is safe from virus transmission. Government should be promoting the agriculture sector.
Second, distribution system related to transportation system. Global production and supply chain disruption also happen during pandemic. Business owner and any industry has to keep assesing the impact of pandemic on operation, production, distribution and supply chain. They have to balance supply, manufacturing and logistic of the product. Moreover, technology had a good impact on distributing product.