??????????????????????????? ?????????????????? ???????????????????????? ??????????????????????????????
Badri Munir Sukoco
Professor of the Faculty of Economics and Business,
Universitas Airlangga

Indonesia's independence has entered its 75th year. Praise be to the entire Indonesian nation, because various major events that were feared would divide Indonesia did not occur. The prolonged conflict after independence, G30S PKI, Reformation and Economic Crisis that became multidominant in 1998, and the 2008 Economic Crisis are some of the major events and have the potential to cause national disintegration. However, Indonesia remains united, even becoming the 7th largest economic power in the world in 2019 (???????????????????? ???????????????????????????????? ???????????????????????, 2019). This underlies the launch of the vision of the Advanced Indonesia Cabinet to escape from ???????????????????????? ???????????????????????? ????????????????????? and lead Indonesia to become a developed country in 2045.

However, the Covid-19 pandemic that has hit the world since the beginning of 2020 has changed everything. ???????????????????????????????????? accompanied by restrictions on human mobility has caused flight volumes to drop by 82%, 7.5 million flights have been canceled, revenues have dropped by 55%, and jobs have been lost for 50 million people worldwide (????????????????????????????????????????????????????????? ??? ...

The above conditions make the global economic recession a reality, including in Indonesia. According to Airlangga Hartarto, Coordinating Minister for Economic Affairs, Indonesia experienced growth of -5.32% in the second quarter and is projected to decline to -1% in the third quarter of this year. This situation is exacerbated by the slow execution of state spending, leading President Joko Widodo to rebuke his aides on several recent occasions.

In general, economic growth is the ratio of gross domestic product (GDP) this year to last. GDP consists of household consumption, investment, government spending, and exports minus imports. The description above shows that the last three factors are difficult to predict, making household consumption Indonesia's greatest hope for escaping recession.

How can Indonesia increase household consumption to avoid an economic recession?

???????????????????????????? ????????????????????????????
???????????????????????????????????? ???????????????????????????????????? (2019), a book written by Prof. Robert J. Shiller (Nobel Prize winner in Economics in 2013) argues that studying trending stories is the first and important step for policy makers to understand the economic behavior of individuals and society. The ability of policy makers to predict, prepare for, and mitigate the impact of economic crises (even recessions and depressions) will increase by understanding Narrative Economics.

There are 2 elements that will influence ???????????????????????????????????????????????? ???????????????????????????????????????: First, the story ???????????????-????????-???????????????ℎ that makes the story spread. Second, the efforts made to create a new story that spreads (???????????? ???????????????????????????????????? ???????????????????????????) or make the story spread even more (?????????????????? ??????????????????????????????????????????). Whether the story conveyed is true or false (ℎ????????????), will be transmitted by ???????????????-????????-???????????????ℎ, news media, and of course ????????????????????????????????????. The economy will be driven by existing narratives, both positive and negative, influencing how consumers consume, invest, save, and engage in other economic activities. Despite the importance of Narrative Economics, many policymakers and economists have paid little attention to it.

The measure that can be used to see what stories exist in society is ??????????????????????????????????? ???????????????????????????????????? ????????????????????? – CCI and ??????????????????????????????????? ????????????????????????????????? ????????????????????? – BCI. Based on data released by ????????????????????????????????????????????? ?????????????????????????????? ?????????-???????????????????????????????????? ?????????????????????????????????????????? (OECD, 2020), Indonesia had the highest CCI in December 2019 (100.39) and January 2020 (100.22), even compared to the 2019 average. Since the Covid-19 pandemic, Indonesia's CCI has declined and reached its lowest in May 2020 (91.34), although it began to rise in July 2020 (94.12). What about China, the country of origin of the pandemic? Throughout 2019, its average CCI was 99.15, and it fell to its lowest level in February 2020 (85.43). In July, the level began to rise to 97.94. Before the pandemic, the United States (US) had an average CCI of 99.35. Interestingly, despite having the highest number of Covid-19 positive cases and deaths in the world, the CCI level rose to 97.47 last month (lowest in April: 92.63). This will result in higher growth in domestic consumption in China and the US compared to Indonesia.

For the BCI, the average for the 37 OECD member countries was 98.39 in the last six months. Meanwhile, Indonesia's index began to decline at the beginning of 2020 to 98.37 (June), a slight decrease compared to the 2019 average of 99.57. The US experienced a decline for three consecutive months (March, April, and May 2020), but interestingly, it actually rose to 100.18 in June. China experienced its lowest BCI level in February (94.52) (much lower than the 2019 average of 98.11). However, in June, it rose to 99.44. This improving trend in the BCI (OECD, US, China, and Indonesia) certainly indicates that businesspeople are highly optimistic that the economic recession caused by the Covid-19 pandemic will soon end.

Furthermore, a bi-weekly survey conducted by McKinsey in 45 countries showed that residents of South Korea, South Africa, and Mexico will reduce their household spending by >20% in the next two months. Interestingly, Indonesia has the highest level of residents planning to increase their household spending by >25%. In terms of optimism, the United Arab Emirates, Saudi Arabia, and China have the most optimistic populations compared to other countries. Indonesia ranks seventh in optimism, below India.

Recommendations:
On the 75th anniversary of the Republic of Indonesia's independence, we, along with countries around the world, are being tested by the Covid-19 pandemic and a recession that, if mismanaged, could turn into an economic depression. The economic recovery tasked to the Economic Recovery Task Force requires an understanding of people's economic behavior, and Narrative Economics can be an effective alternative approach.

According to the Central Statistics Agency (2019), household consumption contributed 56.62% of Indonesia's GDP. Of this amount, ???????????????????????? ????????????????????? (MC) Indonesia, which has 52 million people, contributes half of household consumption (World Bank, 2020). What should be of concern to the government is that MC 1 (Rp. 1.2-3.2 million per person per month) has a proportion of 90%, while MC 2 (Rp. 3.2-6 million) is only 10%. The current recession is very risky for MC 1 to fall to ??? ... 1,700 trillion in Q3 and Q4 could be a source of hope, particularly direct assistance to the community and other programs for SMEs to increase consumption and stimulate the economy.

The above description shows that Indonesia has promising conditions for recovering from the economic recession. The optimism of the Indonesian population, coupled with a willingness to spend, is key to increasing household consumption in Indonesia. Creating new hope and optimism, shared by the public (both consumers and businesses), and making it viral, is the key to Indonesia's swift recovery from the economic recession. And of course, health protocols are a key prerequisite to prevent Indonesia from experiencing a second wave of COVID-19 and prolonging the economic recession.

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