6 Examples of Economic Threats and Appropriate Handling Strategies!

Examples of Economic Threats – The economy is not always stable. Sometimes in the prosperous phase, but not infrequently also in the worst phase. Economic turnover occurs in every individual, even to the state. Defensive strategies must be arranged in such a way that when economic changes occur they will not pose a threat.

In the Big Indonesian Dictionary (KBBI), threats are defined as efforts made conceptually through political acts and/or crimes that are expected to endanger the order and interests of the state and nation.

An expert named Treats argues about threats as the occurrence of important situations that exist in a company or others where it is not profitable. Another expert gave his views on threats.

For him, a threat is any activity or effort, whether carried out abroad or within the country, which is considered to endanger the sovereignty of the state and the territorial integrity of the country as well as the safety of the entire nation and state.

The purpose of the threat, namely to change the order of a nation and a state that was initially fine became messy and destroyed. Therefore, there is a need for unity and unity in solving various problems that occur so that they do not pose a significant threat.

Definition and Examples of Economic Threats

The state does not only face threats in the field of defense and integrity. However, also in the economic field. In this field it can also trigger other divisions.

Economic threats occur in various lines of state life. Here are some examples of economic threats mentioned on the Kumparan.com and Jernih.id pages.

1. Inflation

Inflation is an economic threat to Indonesia. Especially when the increase in the price of goods occurs continuously. This can cause changes in the value of money against market mechanisms.

Economic stimulus is needed when there is inflation. Settlement strategies are based on economic stimulus. Among them are implementing devaluation, suppressing wage rates, monetary policy, supervising economic activity, regulating distribution channels, and increasing domestic production.

2. Increasing Unemployment Rate

Rising unemployment rates have the potential to threaten the Indonesian economy. Not only that, crime will also increase. The high unemployment rate also has an impact on increasing the poverty rate.

Of course this will disrupt the level of stability of the country’s economy. Therefore, a strategy is needed to reduce the high unemployment rate. Here are some ways that can be pursued.

  • Improving the quality of education and community skills.
  • Creating jobs.
  • Increase job training in each area.
  • Run transmigration.
  • Supporting informal businesses, for example creating new entrepreneurs.

3. Unclear State Economic System

Economic threats can occur if the state does not have a clear economic system. It would be better if the government evaluates the economic system related to foreign investors. Support and support for domestic producers should be higher.

4. Condition of infrastructure

Poor infrastructure conditions also have the potential to pose an economic threat. Ideally, infrastructure development should be evenly distributed in each region as well as adjusted to their needs.

Uneven infrastructure conditions can lead to an unstable economy. Therefore, there is a need for infrastructure development. For example, equitable distribution of infrastructure development, research on infrastructure adjustments to meet the needs of each region, and sufficient funding.

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5. Dependence on Imported Goods

The people’s dependence on imported goods is an economic threat to Indonesia. the more goods imported it will disrupt the stock of goods and sales of domestic products.

Actually, imports are allowed if domestic stocks have been reduced. Also, the production of goods takes quite a long time for production. When domestic products are available, imports must be stopped.

6. Debt from Other Countries

Indonesia is one of the countries that has quite a lot of debt with other countries. In 2019, the World Bank stated that Indonesia is a country with small and medium income, but has the largest debt, reaching IDR 5,907 trillion.

Of course this will pose an economic threat. Moreover, the meager income of the people and the state must be allocated to pay off debts. If this condition continues without improvement, the Indonesian economy has the potential to weaken further.

Consequences of Economic Threats

The Ministry of Education and Culture’s book states that economic threats bring many bad influences. The following are some of the consequences of economic threats.

1. Urgent Local Products

The free market is the entry point for products from various countries. With so many products from abroad, domestic products are displaced, especially traditional goods or products produced by small-scale producers.

Local products will lose to products from abroad because of lower prices, more stock, and a variety of choices. Product innovation and selling price calculations must be considered by domestic producers to market their products.

2. The emergence of social inequality

Social inequality will occur when there is a free market where free competition also occurs. domestic and foreign producers will compete with each other to reap the maximum market share.

This creates a social gap between domestic and foreign producers. If this condition continues and domestic products are increasingly unattractive, it will disrupt the pace of the Indonesian economy.

3. Poor Economic Growth Prospects

Unhealthy competition will result in poor economic growth in the long term.

4. Reduced People’s Economic Sector

Indirectly, free competition can reduce the people’s economic sector because something is capitalized by large producers. The impact, will make unemployment and poverty will be more difficult to overcome.

5. Swelling of the State Debt

Almost all countries borrow from other countries or the World Bank to meet national needs. However, when the amount of debt swells and is too large it will threaten the country’s economy. Finally, state revenues are only used to pay off debts and hinder domestic development itself.

6. Unabsorbed Human Resources

In this modern era, human labor is not needed in business processes, household chores, and other elements of human life. This is exacerbated by the need met by imports. This causes the economy to weaken due to a lack of qualified and qualified human resources.

Strategies to Overcome Economic Threats

Economic threats can be overcome by implementing various strategies. The following are several strategies for overcoming economic threats, as reported by the Ajaib.co.id and Adjar.grid.id pages.

1. Community Economic System

The populist economic system can be one way to deal with economic threats. Various ways can be taken to realize the people’s economy, including the following.

  • The economic system was developed to strengthen domestic production for the domestic market so that it could strengthen the people’s economy.
  • Agriculture is a top priority because the majority of Indonesia’s population work as farmers.
  • The domestic industry must use raw materials originating from within the country so that they do not depend on imported materials from abroad.
  • The economy is oriented towards people’s welfare, meaning that everything must be within reach of people’s purchasing power.
  • Not relying on multilateral agencies, such as the IMF, WTO and the World Bank.
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2. Overcoming the Problem of Economic Disparity

Economic inequality is one of the economic threats that must be addressed immediately. A group of people who are rich lame with the poor. Here are some steps that can be taken to overcome the problem of economic inequality.

  • Investment through social protection.
  • Carry out infrastructure development in each region according to needs.
  • Improving the quality of education.
  • Increase employment.
  • Lending with cooperatives.

3. Overcoming Corruption Problems

Corruption is theft of people’s money with style. Corruption seems to have become a culture that is attached to people who are given positions. Even though not all Indonesian people are fond of corruption, you can see that in the news there is no end to corruption.

This certainly disrupts the Indonesian economy. It causes Indonesia’s economic rate to slow down. Here are some ways to overcome the problem of corruption.

  • Build stronger rule of law.
  • Creating anti-corruption-based education.
  • Build moral education as early as possible.
  • Equip yourself with intensive religious education.
  • Maintaining the existence of activists.

4. Overcoming Debt Problems with Other Countries

The average country in the world has debts with other countries or the World Bank. Especially developing countries. Indonesia is one of the countries that has a high amount of debt. As a result, economic problems the value of the currency continues to fall.

Therefore, efficient and appropriate steps are needed to overcome debt problems with other countries. For example, by implementing efficient management of various lines of the economy in Indonesia.

5. Overcoming Import Dependency Problems

Countries should not depend on their country’s needs for support from other countries or always import certain needs. This can hamper the pace of the economy, especially the production of domestic goods.

Therefore, countries must implement a strategy to overcome the problem of import dependence as follows.

  • Increasing domestic production as a substitute for imported products.
  • Make import rules more stringent.
  • Increase export activity.
  • Maintain good relations between countries.

6. Overcoming Infrastructure Problems

Inequality in infrastructure development can result in a slowdown in the pace of the economy. This is because infrastructure is one of the economic supports in certain areas. Inequality in infrastructure development has resulted in economic disparities in various regions and economic instability.

The following are several strategies to overcome infrastructure problems that threaten the economy.

  • Doing equity in infrastructure development in each region.
  • Ensuring funding in the infrastructure sector is evenly distributed.
  • Conduct research and adjustments to infrastructure to meet the needs of each region.

7. Overcoming Inflation Problems

Inflation is one of the economic threats of a country. Inflation itself is a condition of increasing prices that occur continuously so that it has an impact on changes in the value of money in the market mechanism. Therefore, inflation must be addressed immediately if it occurs in a country.

Here are some strategies to deal with inflation.

  • Application of devaluation.
  • Pressing wage rates.
  • Implement several monetary, non-monetary, and fiscal policies.
  • Supervise the economic activities of residents.
  • Implement the distribution process by the government directly.
  • Increasing production by the company.

8. Reducing the Unemployment Rate

Unemployment is a status given to citizens who do not have a job or income, work for less than two days a week, are looking for work, or someone is in the process of getting a better job. High unemployment rates pose an economic threat.

This is because unemployment can hamper the pace of a country’s economy. Therefore, to overcome this, you can take the following steps.

  • Improving the quality of education and skills for every citizen.
  • Creating labor-intensive jobs.
  • Improve job training in every modern industry.
  • Developing a business by means of entrepreneurship or entrepreneurs.
  • Support informal business.
  • Cooperating with foreign parties or other countries regarding sending workers abroad.
  • Increasing focus on family planning programs.
  • Run the migration program.