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As we all know, the coronavirus has changed the world. The outbreak began in Wuhan, China, in December and has expanded to nearly all around the world. Millions of people around the world have been infected and some have died. It started on December 31, 2019 when the World Health Organization (WHO) said that a mysterious pneumonia is sickening dozens in Wuhan, China. However, there was no evidence of the virus spreading from person to person. On January 21, there were reports of coronavirus infection outside. Later on January 30, WHO declared a world health emergency. Since then, countries started having lockdowns and later it was declared as a pandemic (Schumaker, “Timeline: How Coronavirus Got Started”).
As stated before, the presence of the virus has changed the world, including people’s habits; buying for needs only, working and learning from home, fear of going outside. Despite all the impacts it has given to the world, it has the most impact on a country’s economy. Production factories stopped, so as national and international trades. With all the uncertainty, in a matter of days, we don’t even know if we are able to afford food.
The outbreak has led major institutions and banks to cut their forecasts for the global economy. In a March report, the Organisation for Economic Co-operation and Development said it downgraded its 2020 growth forecasts for almost all economies (Tan, “Coronavirus Could Spark A Financial Crisis for Struggling Countries, Singapore’s Trade Minister Warns”).
The Federal Government of Australia to consider possibilities of effectively having the economy into hibernation, allowing businesses to emerge after the coronavirus crisis, and resume and rehire without disabling debts. Banks, lenders and landlords would all be asked to weigh rents and debt repayments for at least the next six months.
The Prime Minister Scott Morrison said that the idea is simple, some businesses have to close their doors because they couldn’t keep it open, having to start again for at least six months after due to debt, rental payments, and other responsibilities. Therefore, the Finance Minister Mathias Cormann called on all Australians to pull together with a fair and equitable way to spread the responsibility so that everyone has the opportunity to recover and start again after the economic ‘hibernation’ (Norman, “Government Considering Radical Measures to Put The Economy Into Hibernation to Survive Coronavirus”).
On the other side, Denmark has implemented policies designed to avoid layoffs and bankruptcies. The policies include delayed VAT payments and labor contributions, increased tax account limit, salary guarantees and sick leave payments, and cash flow assistance and loan guarantees. The government will support 90% of wages of hourly workers who are sent home up to DKK 26,000 ($3,800) a month and salaried workers will get 75 percent covered up to DKK 23,000 ($3,350). The salary guarantee program is organized through the Danish three-party-negotiation system, which consists of the government, unions, and employer organizations.
Small businesses expecting to lose 40 percent of revenue can get up to 80 percent of regular expenses covered by the government. Larger businesses expecting to lose 30 percent of revenue can take out loans backed by the government up to 70 percent. If the business has been ordered to close, the government will cover up to 100 percent of regular expenses (Boesen, “Denmark Unplugs the Economy”).
The approach Australia took dealing with the pandemic emphasizes the value of unity by taking the responsibility of debt payments and other responsibilities together to make sure everyone has the ability to start again; overcome things as one for all. Meanwhile Denmark emphasizes the value of support by participating directly to their citizens. However, both Australia and Denmark’s approach haven’t been proven successful as the pandemic is not over yet. Every country is still trying to find the best way to maintain their economic stability, especially countries with high population density like Indonesia.
Indonesia is considered ‘late’ as the first known coronavirus case was discovered on the second March of 2020. Today, most countries like China and Singapore’s coronavirus trend is going down, meanwhile Indonesia’s is still increasing day by day. As the COVID-19 pandemic strikes the Indonesian economy, with almost 3 million people having lost their jobs and 70 million at risk of losing income because of physical distancing, many people are worried about escaping not only from the disease but also from starvation (Nurbaiti, “Hunger Hits As Many Indonesians Struggle During COVID-19 Pandemic”).
The government has incorporated priority for disaster risks in the state budget. This year’s budget allocates Rp 5 trillion (US$364.2 million) for emergency management, pre-disaster preparedness, and post-disaster recovery. Unfortunately, the commitment to diminish disaster risks has not been fully delivered into practical actions for tackling pandemics. The problem may be rooted in the national strategy on epidemics or pandemics, or the lack thereof. One reason may be because disaster-management efforts center on our frequent natural catastrophes (Nasruddin, “Pandemic Strategy Still Lacking”).
Instead of spending too much time formulating a new strategy, Indonesia should at least try combining other country’s economic strategies to recover its own. Despite the uncertainty, Denmark and Australia both are in the process of economic recovery from the loss throughout this pandemic. A combination of both strategies would mean emphasizing unity and support by participating directly in helping those in need and taking responsibilities as a whole, focusing on distribution, all for mutual benefit. Delaying debts, rents, and loans without additional fees along built with tolerance between those who give and those who receive. Paying 80% of the wages of middle to lower class workers and 75% of upper class workers, using the remaining salary for the health sector. This could be a solution because it includes the collaboration between both parties (citizens and the government) in overcoming the loss during this pandemic.
Bibliography
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