IPB University Lecturer: Overcome the Economic Recession from the Roots

An economic recession occurs because of negative economic growth for two or more quarters. This can happen because of the global economic crisis, war or what is happening right now, a pandemic that has hit countries all over the world.

Prof Dr Hermanto Siregar, Professor of Economics from IPB University, said that in order to respond to an economic recession, the first thing to do is to overcome the cause, in this case, COVID-19.

“Therefore, I often comment on policy makers to prioritize their resources to control COVID-19 first. This is because, as long as this vicious virus continues to spread uncontrollably, business and economic uncertainty remains great. As a result, there are no foreign investors who want to enter Indonesia. Even domestic investors save the funds they own. Therefore, it is very important for the government to implement the National Economic Recovery program, to keep the economy moving,” said the IPB University lecturer from Faculty of Economics and Management (FEM).

Prof Hermanto added that facing a recession, farmers need to be encouraged to keep running their farms, producing various food commodities and others, so that the people's needs for food can be met. In a recession especially due to COVID-19 pandemic, according to him, importing (for example food) is not as easy as in a normal situation. Therefore, the government must support farmers to increase their food crop cultivation activities.

"It is good that micro, small and medium enterprises (MSMEs) are paid attention to, but don't forget the providers of food commodities to all of us, the farmers. Also provide direct cash assistance (BLT) to farmers in need. Or other assistance such as assistance for agricultural production facilities (saprotan) to improve farming performance," he explained.

Prof. Hermanto gave tips that can also be used to overcome an economic recession. "First, actually encouraging farmers to increase production can not only strengthen our food security, but can also encourage economic growth to get out of a minus value," he explained.

Second, according to him, the government must give BLT to anyone who is categorized as poor or has lost their job. "With BLT, their basic needs can be fulfilled even though they barely spend the BLT they receive. This expenditure becomes income for stalls, MSMEs and others. This means that the economy keeps moving," he said.

He continued, "Third, maintaining the health of banks. If banking is healthy, the needs of businesses, including MSMEs and agriculture for working capital and investment, can still be met. If this happens, the economy will automatically grow faster."

"Fourth, we as households who still have purchasing power, prioritize buying goods produced by households or micro and small businesses around us. Do not increase savings. Increase spending and share, so that neighbors who are in need can be supported. Insya Allah, this will also bring blessings," he explained.

Prof Hermanto also advised, “We all have to maintain our health and carry out health protocols to avoid COVID-19. Then, even though it is not as comfortable as when it is normal, keep working and take care and even increase productivity or performance. Then, support government programs, especially those that clearly side with MSMEs and farmers. Finally, pray more, that Allah SWT will help us all and this country get out of recession and other difficulties.” (IAAS/SAR)

Published Date : 09-Oct-2020

Resource Person : Prof Dr Hermanto Siregar

Keyword : IPB University, Prof Hermanto Siregar, economic resession