Asrian Hendi Caya
Researcher of PUSIBAN University of Lampung
PANDEMIC of Covid-19 has a wide impact on Indonesia, including Lampung. It touches all dimensions of life, especially social and economic life. Many economic activities have stopped, some are still working even though the volume has dropped dramatically, some are converting to survive, and start new activities as a response to the existing conditions.
All activities recorded in economic indicators. One of them is the Gross Regional Domestic Product (GRDP). GRDP records macroeconomic activity. It shows economic performance in a country / region at a time (quarter / semester / year). Thus, we can see how the economic impact during the Covid-19.
In the first quarter of 2020, Lampung’s economy continued to grow despite a drastic decline by 1.73%. This happened because in the same conditions in 2019, Lampung’s economy grew by 5.21%. All sectors are still growing except the agricultural and excavation sectors which experienced a decline (negative growth)
The agricultural sector fell by -2.84%, while mining fell by -1.50%. The big contribution to the GRDP (29.65%) is from agriculture and has a big impact on reducing Lampung’s economic growth, which is -0.83%. The mining sector contributed by 5.23%. The industrial sector (18.83%), trading sector (11.99%) and construction (9.27%) are giving a large contribution to the GRDP. Unfortunately, the growth of these three sectors is relatively small.
Therefore, the construction sector is the largest sector to contribute to Lampung’s economic growth of 0.40%. Other sectors that also contribute significantly to the economic growth are transportation, warehousing (0.38), communication, and information sector (0.32%).
The service sector still becomes a growing industry. This industry consists of other service sectors (10.78%), accommodation, food and beverage (9.87%), health services and social activities (7.72%), transportation and warehousing (7.31%), and education services (7.18%). However, because its contribution to the GRDP is small, so the input to the GRDP is also small.
Why does the economy still grow? Because most economic activities are continue even in the medium to the long term. Many activities are running because they have been planned before and must be fulfilled or the process takes a long time so the results will come in this period. The impact of Covid-19 in Lampung has begun since March, although the symptoms have been around since February. While the first quarter covered in the January, February, and March.
Role of Government
Regarding the affected businesses during COVID-19, the government needs to reduce the burden on fiscal facilities such as taxes for medium-sized businesses. For those who have temporarily closed their activities, this burden will not be a problem.
Other facilities are to ease the burden of financial obligations related to loans, for example delaying principal payment and interest installments or interest deductions. This has been responded by the government through tax exemption and economic stimulus.
Small and Micro Enterprises (UMK) are a bit heavier because their capital may be eroded to cover basic needs. In this case, it is necessary to have a financing scheme, both aid, and facilities with a lot of relief. There are still UMK that have survived, especially in the areas of basic needs, both processed food, and raw materials.
In this case, market access is needed. There must be an effort to prioritize the involvement of UMK in food aid, especially by the government by ordering from UMK (rice wrap, masks, etc.)
The Indonesian Marketing Association Chapter of Lampung, for example, launched the defensive movement of the UMKM. To buy community products must be a widespread movement, especially for the middle class, social institutions, and businesses with economic security as well as the government on using UMK’s products.
The economic weakening is also reflecting in price developments. In March, inflation as an indicator of price development showed deflation. It means the average price dropped. The price always increases every Ramadan, but now since the demand is falling, the prices tend to go down due to falling of purchasing power.
Bandar Lampung experienced deflation by 0.44%, while Metro City experienced inflation by 0.27%. Price monitoring in these two cities showed a decrease in the consumer price index (CPI) from 105.64 in February 2020 to 105.26 in March 2020 or experiencing a deflation by 0.35%.
In March 2020, food and beverage, and tobacco industries contributed to the formation of deflation by 0.27% while the information, communication, and financial services by 0.09%; the transportation industry by 0.02%, and household equipment, tools, and routine maintenance by 0.01%.
Economic weakening also reflected in the employment sector. The open unemployment rate increased by 0.32% as of February compared to last year. However, the unemployed increased by 8.72%. And the labor force participation rate (TPAK) has decreased by 0.46%.
Hopefully, the pandemic of Covid-19 ends soon, and the economy can reorganize and restored immediately. []
