This is because the current inflation is caused by the war between Russia and Ukraine, besides rising prices," he said during a seminar entitled “Managing Inflation to Boost Economic GrowthJakarta (ANTARA) - Senior economist at the Institute for Development of Economics and Finance (Indef) Didik Rachbini has urged the government to increase global cooperation through economic diplomacy to tackle inflation.
"This is because the current inflation is caused by the war between Russia and Ukraine, besides rising prices," he said during a seminar entitled “Managing Inflation to Boost Economic Growth,” which was accessed online from here on Wednesday.
He said he believes that Indonesia is being challenged to take advantage of its presidency of the G20—a multilateral cooperation forum consisting of 19 major countries and the European Union—to help resolve the conflict between the two countries.
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Resolution of the conflict is essential, especially because Indonesia imports food from Ukraine and there are many tourists from Russia and Ukraine who come to Indonesia, so if the conflict is not resolved, the impact on the country will be quite large.
The members of the G20 include countries connected to the war, such as Russia.
“So, if we sit together but cannot solve the problem, then there is no other country that can solve it other than the countries in the G20 itself," Rachbini said.
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He further said he hopes that diplomatic cooperation can be boosted because war can be a source of problems for the economy, including the global socio-political situation, and rising inflation is actually only a small part of the impact.
Inflation has reduced people's income and made the lowest class of society poor because high inflation has increased, possibly doubled, the price of rice and oil, he added.
Due to inflation, the purchasing power of people who earn a minimum wage will also be affected because they have to spend more money, thus, they will no longer have savings.
"Meanwhile, for investors and business people, inflation will increase interest rates so that investment and various business activities will be hampered," said the economist.
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Translator: Katriana
Editor: Fardah Assegaf
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