7 Problems that Arise in Economic Diversity

Problems That Arise in Economic Diversity – Sinaumed’s must have known that our country, Indonesia, has a lot of diversity. Both social, cultural, and even economic diversity. This is due to the diversity of the population.

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From this unequal diversity, of course, various problems will arise, for example inter-ethnic conflicts. Unknowingly, these inter-ethnic conflicts are sometimes triggered by economic problems.

Then, what are the problems that arise in the existence of economic diversity in our country, Indonesia? Let’s look at the following review so that Sinaumed’s can understand it!

7 Problems in Indonesia’s Economic Diversity

The diversity of economic conditions that exist in society is related to the diversity of job levels, professions, positions, positions, to educational backgrounds that can affect income. In short, each individual has their own job and income, so not all of them are the same in terms of finances. Well, of course this diversity will cause various problems, including social inequality.

According to Indrastuti (2009), economic diversity is a matter of various types in an economic activity or livelihood. Meanwhile, according to Haris Iskandar (2017), economic activity is all activities carried out by individuals to fulfill their needs.

The following are some of the problems that arise from the existence of economic diversity in Indonesian society.

1. Limited Job Opportunities for the Community

The limited job opportunities are increasingly being felt, especially in the current conditions of the Covid-19 pandemic. The large number of companies or jobs that go bankrupt indirectly causes the workers to inevitably have to look for new jobs.

However, finding a new job is not easy because one another’s economic conditions are also difficult. In addition, along with the development of the times, jobs also become diverse and must have certain skills. Not everyone has this particular skill.

This indirectly affects the diversity of the economy, so it is possible that there will also be conflicts between communities.

2. Social Gap

Well, this is a clear problem that will arise in a diverse economy. There are social strata in terms of the economy, namely the upper economic class, upper middle class, to the lower economic class.

You can see concrete examples around you, there is someone who is in the upper economic class so it will be easy to meet your needs, both primary and tertiary. There is also someone who is in the economic class and below, to fulfill their primary needs in the form of filling their stomach, they think twice, let alone to meet their secondary to tertiary needs.

The existence of these striking gaps or differences is an example of the problems encountered from the economic diversity in Indonesian society.

3. Occurrence of Unfair Competition

The next problem is that there will be competition or competition that occurs among community members. Starting from industrial matters, MSMEs, to the process of applying for work.

In the case of SMEs, for example, there are two people who jointly founded SMEs in the form of aci meatballs. However, these two people have different economic circumstances, so one person can buy raw materials of average quality but manage to pay an agent to print a trademark. While one other person can only buy good quality raw materials, but sells them through stalls.

Through the difference in raw material capital, of course it will give different results. Consumers tend to choose food products that have a trademark, even though the quality is not necessarily good.

4. Social Jealousy

The difference or diversity of economic conditions not only causes social inequality, but also social jealousy. This jealousy is usually “submitted” to people of the economic class and above and who have large amounts of wealth.

In fact, this social jealousy can have an effect on criminal acts, such as theft, robbery, to murder to target property.

5. Poverty

Poverty is a condition in which a community is unable to meet their needs, both primary and secondary needs. In Indonesia, poverty is included in the economic problems that are still being faced by the government.

Previously, various efforts had been made to tackle poverty, starting from the Village Assistance Program to the issuance of a Certificate of Disadvantage (SKTM).

However, despite the efforts that have been made, poverty in Indonesia has not just decreased. The problem of poverty actually affects various things, ranging from education, access to health, to the distribution of Natural Resources (SDA).

6. The Emergence of Unemployment

The problem of unemployment is almost the same as the previous point, namely limited employment opportunities. It can be said that with the limited number of available jobs, it will have an effect on increasing unemployment.

The problem of unemployment is actually not only experienced by the Indonesian state, but also in various countries. Unemployment is caused by the number of labor force is not balanced with the number of existing jobs. As a result, the labor force does not get the opportunity to work, and causes unemployment.

7. Inflation

Inflation is a process of rising prices that occur continuously. The price increase is related to the market mechanism which is influenced by various factors, one of which is the increasing level of public consumption. There are several causes of inflation, namely demand-pull inflation and cost-push inflation.

However, it turns out that the problem of inflation affects one another , you know, with the problem of unemployment!

Based on the Philips Curve , it is illustrated that there is a negative relationship between the inflation rate and unemployment. If the inflation rate is high, the unemployment rate will be low.

Actually, the relationship between inflation and unemployment is largely determined by the amount of supply and demand for goods/services in the market. For example, if the demand for goods/services increases, this will also affect the level of demand for labor.

How to Overcome the Problem of Economic Diversity in Indonesia

As a country that is “responsible” to its people, a country is obliged to think about efforts to overcome various problems related to economic diversity. So, here are some ways or efforts to overcome problems resulting from economic diversity that exists in society.

Ways to Overcome Economic Instability

This instability is related to the problem of limited employment, social inequality, unfair competition in establishing a business, to social jealousy. It should be noted that this condition of economic instability often occurs in various countries, not only in Indonesia. However, what is different is the effort to overcome them.

1. Economic Empowerment

This economic empowerment effort is intended to make economic conditions more stable, especially in a small scope. Then, what is included in this small scope? For example, Micro Finance Institutions (LKM) focus on developing savings and loan activities, as well as developing Micro Small Enterprises (UKM).

2. Massive Job Opening

This effort is related to lowering the existing unemployment rate. From those who previously did not have or get a job, they can work and be productive to meet their needs. In addition, efforts to create large-scale job opportunities can also have an impact on per capita income in a country. The higher the labor force, the higher the increase in per capita income each year.

3. UMR (Regional Minimum Wage) Setting Policy

This effort must be carried out by the government so that it is wiser in setting the UMR (Regional Minimum Wage) by taking into account the needs of the people in the region. This is because the cost of living between regions has differences, so the UMR determination must also be balanced with the cost of living.

4. Opening On The Job Training

This effort is almost the same as the previous point, which is to open as many jobs as possible. The difference is, in this training effort is focused on people who are less skilled in a skill.

It would be better if this training was set at a low price or even free of charge, because most people who are unemployed tend to be in an unstable financial condition. From this training activity, participants will later receive a certificate showing that they are skilled in a skill and can be used to register for jobs.

5. Focus on Infrastructure Development

This effort must be carried out by the government so that it can orient development, especially on infrastructure, both in the industrial and food sectors. After all, this infrastructure development will also indirectly provide jobs for the people.

Not only that, infrastructure development, both in the industrial and food sectors can also generate international trade, so there is a possibility that this country will not only act as an importer, but also as an exporter.

How to Overcome Unemployment

The existence of unemployment is the main problem of the condition of economic diversity that occurs in Indonesia. Actually, the government has been trying for a long time to reduce the unemployment rate, it’s just that sometimes it doesn’t go hand in hand with employment conditions.

So, here are some ways to overcome or reduce unemployment.

Expanding job opportunities for the unemployed, namely by opening new jobs in various fields, such as agriculture, trade, industry, and services.
Improving the quality of education. This of course can be useful, especially for new graduates so that they are ready to become a more skilled workforce.
Improving the quality of the working country, namely by providing skills education, both through formal and non-formal education.
Provide opportunities to work abroad. This effort has been carried out by the government and various employment agencies, namely Indonesian Migrant Workers (TKI) and Female Workers (TKW).
Encouraging the growth of a business or home industry.
Provide socialization regarding the role of family planning (family planning), to reduce the rate of population growth.

Efforts to Overcome Inflation

It should be noted that this inflation cannot be eliminated completely, so the government is only trying to keep inflation as low as possible.

The Central Bank will generally rely on the amount in circulation as well as controlling prices with the interest rate as its instrument.
Strengthening the Discount Policy, is the policy of the Central Bank, namely by influencing the circulation of money while simultaneously raising and lowering interest rates.
Open Market Policy, namely by buying or selling securities.
Determining the Cash Ratio, namely the minimum ratio between the cash owned by a commercial bank and the amount of demand deposits (checks and demand deposits) issued by the bank concerned.

So, that’s a review of the problems that arise from this economic diversity. The culmination of the economic problems is the increase in unemployment. Even so, there have been many efforts made by the government to reduce the unemployment rate, but until now it still persists.