7 Problems Emerging in Economic Diversity

7 Problems Emerging in Economic Diversity

Nikereact.org –¬†Surely you already know that our country, Indonesia, has a lot of diversity. Both social, cultural, and even economic diversity. This is because it is in line with the diversity of the population.

From this unequal diversity, of course it will bring up various problems, such as conflicts between tribes. Without realizing it, these inter-tribal conflicts are sometimes triggered by economic problems.

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

7 Problems in Indonesia’s Economic Diversity

7 Problems Emerging in Economic Diversity

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

According to Indrastuti (2009), economic diversity is a variety of matters in an economic activity or livelihood. Meanwhile, according to Haris Iskandar (2017), economic activities are all activities carried out by individuals to meet their daily 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

This limited job opportunity is increasingly felt, especially in the current state of the Covid-19 pandemic. The number of companies or jobs that went bankrupt indirectly caused the workers to inevitably have to look for new jobs.

However, finding a new job is not easy because each other’s economic situation is also difficult. Plus, along with the development of the times, the work also becomes diverse and must have certain skills. Not everyone has this particular skill.

This indirectly affects the diversity of the economy, so that conflicts between communities may arise.

2. Social Gap

Now, this is a problem that will clearly arise in economic diversity. The existence of social strata in terms of economy, namely the upper economic class, the upper middle class, to the lower economic class.

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

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

3. Unfair Competition Occurs

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

In the case of MSMEs, for example, there are two people who both set up MSMEs 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 the trademark. While one other person can only buy raw materials of good quality, but sells them through stalls.

Through the difference in the capital of these raw materials, 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

From the differences or diversity of economic conditions, it not only causes social inequality, but also social jealousy. This jealousy is usually “proposed” to people of the upper economic class and 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 society is unable to meet the needs of its life, both primary and secondary needs. In Indonesia, poverty is one of the economic problems that the government is still facing.

Previously, various efforts had been made to reduce poverty, starting from the Village Assistance Program to the existence of a Certificate of Incapacity (SKTM).

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

6. The Rise of Unemployment

The unemployment problem 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 Indonesia, 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, this inflation problem affects each other, you know, with the unemployment problem!

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.

In fact, the relationship between inflation and unemployment is largely determined by the 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 population, a country must think about efforts to overcome various problems related to economic diversity. Well, here are some ways or efforts to overcome the problems resulting from the economic diversity that exists in society.

How to Overcome Economic Instability

This instability is related to the problem of limited employment opportunities, 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 it.

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, Microfinance Institutions (MFIs) are focused on developing savings and loan activities, as well as developing Small and Micro Enterprises (SMEs).

2. Massive Job Opening

This effort is related to reducing the existing unemployment rate. From those who previously did not have or got a job, they can work and be productive to meet their needs. In addition, efforts to create job opportunities on a large scale 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 every year.

3. Policy on Determination of UMR (Regional Minimum Wage)

This effort must be carried out by the government so that it is wiser in setting the UMR (Regional Minimum Wage) by considering the needs of the community in the region. This is because the cost of living between regions has differences, so the UMR stipulation 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 create as many job opportunities as possible. The difference is, this training effort is focused on people who are less skilled in a skill.

It would be better if this training is set at a low price or even free, because most of the unemployed people tend to be in poor financial condition. From this training activity, later participants will get a certificate which shows that they are skilled in a skill and can be used to apply for jobs.

5. Focus on Infrastructure Development

This effort must be made by the government so that it can orient development, especially on infrastructure, both in the industrial and food sectors. Moreover, this infrastructure development will also indirectly provide employment opportunities 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.

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

  1. Expanding job opportunities for the unemployed, namely by opening up new job opportunities in various fields, such as agriculture, trade, industry, to services.
  2. Improve 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.
  3. Improving the quality of the working country, namely by providing skills education, both through formal and non-formal education.
  4. Provide job opportunities abroad. This effort has been carried out by the government and various job distribution agencies, namely Indonesian Workers (TKI) and Female Workers (TKW).
  5. Encouraging the growth and development of a home industry or business.
  6. Provide socialization regarding the role of KB (Family Planning), to suppress the rate of population growth.

Efforts to Overcome Inflation

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

  1. The Central Bank will generally rely on the amount that has been circulating while controlling prices with interest rates as an instrument.
  2. Strengthening the Discount Policy, is the policy of the Central Bank by influencing the circulation of money as well as raising and lowering interest rates.
  3. Open Market Policy, namely by buying or selling securities.
  4. Determine the Cash Ratio, which is the minimum ratio between cash held by commercial banks and the amount of demand deposits (cheques and demand deposits) that have been issued by the bank concerned.

Well, that’s a review of what problems are obtained from this economic diversity. The culmination of economic problems is rising unemployment. Even so, the government has made many efforts to reduce the unemployment rate, but until now it is still there.

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