As the Covid-19 pandemic spread out, VISI predicts that Indonesian economy will not grow as the targeted 5.01%. Based on a prediction, this pandemic will end in May. Meanwhile the economy will only grow by 60-70% of the target, namely at only around 3.5%.
Apparently, the lockdown policies taken by governments in some countries and the social distancing in Indonesia have significantly affected business activities in Indonesia. These have hampered the country’s export-import transactions, logistics and transportation (international) access, trading activities, raw material shortage, and capital difficulty.
The pandemic has affected the sales and operational activities of many sectors in the country. The first sector severely affected by the pandemic is tourism sector, particularly hostelry sector. Over the past one month, 698 hotels have stopped operation temporarily, forcing their employees to take days off without salaries. Other hotels that are still operational have to face a drastic drop in their Room Occupancy Rate (ROR), to only below 30% since the early March. Specifically in Bali, the ROR is now even nearly 0%, dropping from 80% in normal situation.
Next to the tourism sector, other sectors severely affected by the pandemic are the airline sector, the manufacturing sector, and the micro, small and medium enterprises (UMKM) and Cooperatives.
Some airline companies have to cut down their international flights, to stop the spread of virus corona pandemic. Globally, 59 airlines companies have to close their international flights, including to Indonesia, and to ground all their airplanes. Specifically in Indonesia, two airlines have already stopped their operations.
The pandemic has also hampered the manufacturing sector. It is believed that the automotive industry becomes the manufacturing sector most severely affected by the corona pandemic. Yet, according to Marketwatch, companies involving in this industry will try the best they can to avoid employee dismissals. It is a fact that it is not easy to seek skillful or experienced workers for the industry.
The UMKM players are also affected by the virus corona pandemic. Apparently, the UMKM players have begun to face a number of obstacles including the decrease in their sales turnovers since February 2020. In fact, since early March, some UMKM players did not earn any income at all and had to dismiss their employees due to the Covid-19 pandemic.
Per March 29, 2020, the pandemic has affected 1,322 cooperatives and UMKM players. In total percentage, 69% or 917 cooperatives and UMKM players reported a decrease in their sales.
Geographically, the affected cooperatives and UMKM players are located in DKI Jakarta, Banten, West Java, Central Java, East Java, Daerah Istimewa Yogyakarta, North Sumatera, West Sumatera, Riau, Bengkulu, Bali, West Kalimantan, East Kalimantan, North Sulawesi, Central Sulawesi, South Sulawesi, South Sumatera, and South Kalimantan.
Meanwhile, 67 cooperatives and UMKM players or 5% reported their difficulties to find raw materials. They are in Banten, DKI Jakarta, Daerah Istimewa Yogyakarta, West Kalimantan, East Kalimantan, West Java, East Java, and Central Java.
In general, either the cooperatives and UMKM players or the large scale manufacturing companies are facing difficulty in obtaining supply of raw materials and the distribution process. Mostly, they cannot get supply of imported raw materials, due to the lockdown policy in the country of origins, while some local suppliers cannot be operating in normal or temporarily stopped, due to the health security reasons.