DIGIVESTASI - A surprise attack by Iran in retaliation against Israel could have far-reaching impacts on the global and national economy. Therefore, appropriate measures are needed to protect the Indonesian economy from the impact of rising tensions between Iran and Israel.

Senior Economist Didik J. Racbini believes that this situation is dangerous for any future presidential administration. This is because the next president will certainly have a high economic growth target. Uncertainty can and will cause disruption when new leaders implement economic policies. This inevitably creates a new burden on society.

"The goal of high economic growth is also just wishful thinking in the election campaign. Let's forget it and focus on the resilience and purchasing power of our society to prevent large-scale unemployment," Didik said on Thursday (April 18, 2024). 

Therefore, the policy to maintain inflation and basic needs prices is the most important policy to protect the vulnerable lower income groups, he said. Didik identified three policy priorities to protect vulnerable groups.  To ensure purchasing power does not decline, the government must do its best and utilize every opportunity to control prices and control inflation.

"This is a duet between the government and Bank Indonesia," he said.  In this policy, Mr. Didik said Bank Indonesia (BI) plays an important role in financial control. "So far, BI has been quite successful in implementing inflation control, but currently the world is getting depressed so that the implementation of inflation control becomes more difficult," he explained. 

On the real sector side, the central and regional governments are obliged to monitor the price of people's basic needs in real time. The second policy, according to Didik, is fiscal. This is the only policy tool that the government can use directly. 

This policy will be maintained to ensure that spending is productive and can help the underprivileged. 
A good fiscal policy means being cautious and careful, maintaining the budget deficit, not over-managing the budget deficit, managing big projects, and not ignoring populism. 

Third, efforts to maintain productivity and the domestic business world. "We must remember that the domestic sector accounts for the largest portion, 75%," he said. Maintaining the domestic economy and business world, especially small and medium enterprises, in times of crisis is very important despite external shocks. 

Furthermore, Didik said that foreign trade policy should target areas that are less affected by the war. Sea routes to Europe and the Middle East will definitely be cut off. But trade partners from other economic poles such as Japan, China, ASEAN, and India will remain, he said. Didik said that the weakening of the rupiah has a psychological impact that has been felt by the community. In response, he believes the government needs public communication experts who understand the public. 

"In particular, the new government will now start implementing public communication measures related to political anticipation of the impact of the Iran-Israel war," he said.

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