7 Examples of Economic Threats and Countermeasures

The same applies to business activities in general. The country’s economy will have its ups and downs as well. There are times when these increases and decreases are natural. but if not controlled It could worsen the economic situation. in fact Not only the economy social and political conditions in a country can also be affected

Here are seven examples of threats. macroeconomics along with its remedies:

1. An increase in the unemployment rate

Unemployment is a phenomenon that is common in a country’s economy to some extent. Unemployment is natural and healthy. because it indicates that people in a particular country Have the option to move from unwanted tasks.

But if the high unemployment rate is not controlled, it will cause real economic and social problems. Because people without jobs have low purchasing power. Mentally ill and prone to crime

There are various economic policies that governments can take to address unemployment. Starting from expanding employment opportunities, increasing human skills by opening courses according to the needs of the industry. organize an exhibition and many other programs. The government also stipulates that workers affected by layoffs receive appropriate compensation and sometimes social assistance. To prevent them from committing crimes while looking for a new job.

2. Rising Poverty Rates

One of the government’s missions is to eradicate poverty. This is because poverty prevents a person from attaining his highest potential. And it can affect two or more generations at once.

For example, children from poor families do not have access to a proper education. Therefore, they cannot find a suitable job in the future. Another factor, for example, children from poor families do not have access to proper health, so when they grow up, they face various illnesses, unable to work, etc.

Poverty alleviation projects can be implemented directly or indirectly. Direct poverty alleviation programs such as Direct Cash Assistance (BLT), Social Health Security. providing school scholarships for children from poor families, etc. for indirect projects such as expanding employment opportunities building education and health infrastructure, and much more.

3. Uncontrollable Inflation

Inflation is also a natural phenomenon in the economy. If not properly regulated, this indicator poses a threat in macroeconomics. increase in inflation too much (hyperinflation) will reduce the purchasing power of the people and the money will be worthless.

Inflation increases typically try to slow down by raising interest rates. with the hope that the amount of money circulating in the community will decrease because people will save or deposit more money

However, learning from the Great Depression in the United States in 1929 until a few years later Strategies for dealing with interest rates alone may not be sufficient to reduce inflation. In this case, governments need to implement programs that are fundamental in nature and have a direct impact on society, such as insurance programs. Unemployment assistance and much more.

4. Economic inequality

A fourth example of economic disruption is the problem of inequality. As an institution, the state must not favor the rich or unilateral. urban areabut also to the poor who live there rural area. As mentioned above This is because poverty can affect systematically across generations.

This economic inequality is one of the greatest challenges for Indonesia. Considering that the country is vast because it is separated by the sea. In addition, social and historical aspects encourage economic development to be centered only on Java and Sumatra.

This economic inequality is a long-term economic problem. The government attempts to overcome this through various means, such as building inter-island infrastructure. providing scholarships to children from underdeveloped areas, etc.

5. Uncontrolled Deficit of Payments

balance of payments (balance of payments) is a record of the amount of money entering and leaving the country in a certain period of time. balance of payments It consists of two parts: the current account (current account) and capital account.

current account Record the difference between the export and import transactions that were performed for a period of time at the same time. capital account Record the difference in the amount of money entering and leaving a particular country. But it doesn’t directly affect the country’s GDP, for example when a foreigner buys stocks or bonds in Indonesia.

The balance of payments will be in deficit if Indonesia’s total imports and exports are greater than its total exports and total money into the country. A balance of payments deficit can be said to be reasonable to some extent. However, it should be kept in mind that a growing deficit can increase the vulnerability of a domestic economy to changes in other countries’ economies.

on Crisis of 1998 For example, Indonesia’s balance of payments has been recorded growing rapidly for several years. before finally decreasing in late 1997 and throughout the year 1998, imports of raw materials

6. Corruption

The next threat in the economy is corruption (Tipikor). Corruption can disrupt the economy. because first Money that is corrupted for self-interest can be used to satisfy the needs of the masses. Both of these corruptions indicate the inefficiencies in the bureaucracy that have the potential to drive domestic and foreign investors back in. Third, corruption lowers public trust in the government. makes people reluctant to pay taxes

Strategies to deal with corruption must be carried out universally from the central to the region through legislative reform and legal management. Indirectly, governments and society can also develop various anti-corruption campaigns and education programs. to help change corruption in terms of ideas

7. Social and political instability

Another economic threat that all parties should be aware of is the instability of social and political conditions. simple example is social instability due to the COVID-19 epidemic. Of course you still remember that the Indonesian economy was hampered by the epidemic.

Countries engaged in ongoing wars or turbulent social and political conditions will also be unable to achieve their full economic potential. First, because the people in the country are not peaceful enough to focus on self-development and the economy. Second, it makes foreign investors rethink investing in the country, even though the potential is really good.