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KOMPAS.com - The war that took place between Russia and Ukraine also had an impact on Indonesia. Gajah Mada University (UGM) economist Eddy Junarsin said the war had a serious impact on Indonesia. This is because of the effects of globalization. As a result of globalization, the positive effect received by Indonesia is being able to enjoy technology that is as good as other countries as well as world-class education. Meanwhile, the negative effects of globalization, if something happens in other parts of the world, it will quickly impact Indonesia. "It's like this, the war is far away in Europe, but in Indonesia it has had an extraordinary impact," said Eddy when contacted by Kompas.com, Wednesday (2/3/2022).

1.The Decline Of Rupiah Exchange Rate

1. The decline in the rupiah exchange rate Eddy explained that the impact of the war would be felt on the flow of money in Indonesia. So, if the war is protracted, it can cause the rupiah exchange rate to weaken against the US dollar. "So it is possible that if the war drags on, the rupiah will depreciate against the US dollar," he said. "So the weakening rupiah exchange rate now is not because of the poor performance of the rupiah, but because of the impact of the war," he continued.

2.The Decline of Capital Market

The capital market will automatically follow trends experienced by the rupiah exchange rate against the US dollar and current global issues. Eddy explained that it is possible that the Indonesian capital market will experience a slight decline, this is reasonable because the whole world is also experiencing the same trend. However, funds from foreign investors in the Indonesian capital market are still relatively stable. "But the last few days we have seen net buying, so foreign net buying is still higher than net selling, so it's still okay," he said. "Although, yesterday it recorded more than 100 billion rupiah net buying by foreigners, but the withdrawal of dollars back to their home countries through net selling has created fear for the Indonesian capital market," he continued.

3.Lost Income Due to Decreased Export
One of the impacts of the Russian-Ukrainian war that was most felt for Indonesia was in the export sector. Eddy said, the value of Indonesia's exports to Russia in January was at US$170 million, while for Ukraine it was US$5 million. "It's not bad, it's a month, you know, per month," he said. Because of the war, Russia will be subject to a trade embargo, so Indonesia cannot export to Russia. "If Indonesia cannot export to Russia, Indonesia will lose revenue of US$170 million from exports of rubber, animal fat and cocoa," he said. This becomes a problem if the embargo is carried out for months, so that Indonesia loses export places.

4.The Impact of Rising Oil Prices On The State Budget

Furthermore, with the Russian-Ukrainian war, it also indirectly affected the Indonesian State Revenue and Expenditure Budget (APBN). With Russia's embargo, it is certain that oil prices will skyrocket. Eddy estimates that the current price has exceeded US$100 per barrel. Indonesia's state budget itself assumes the value per barrel of oil is around 60-65 US dollars. "If it's like that, you can just imagine it, it means that every increase of 1 barrel is an increase in fuel subsidies and compensation," he said. Also read: US-Russia Relations are Heating, Here's a Military Comparison of the Two In fact, the Indonesian State Budget subsidizes fuel, kerosene subsidies, and LPG subsidies. Each increase of 1 dollar per barrel will burden the state budget by more than Rp. 2.5 trillion, for kerosene it is around Rp. 50 billion, while for LPG it is Rp. 1.5 trillion. "Just imagine, this has gone up by 30 barrels, right? From the assumption that the State Budget is only multiplied," said Eddy. "Perhaps that is the most difficult time for the government," he added.

4.Increase in Imported Wheat Commodities
In addition to oil prices, it is likely that wheat commodity prices will also increase. The reason is, Indonesia imports wheat from Ukraine which is used as the main ingredient for making bread to instant noodles. Indonesia's wheat imports are relatively high, according to data from the Central Statistics Agency (BPS), Ukraine is in first place as a wheat importer to Indonesia. Overall in 2020, Indonesia's total wheat imports were 10.299 million tonnes.

Thus, Ukraine contributes to more than 20 percent of the wheat stock in the country. "This is what needs to be anticipated. Some of our food products are quite dependent on wheat. So it can affect selling prices, for example instant noodles, or bread, and other wheat derivative products," said Executive Director of the Center of Law and Economic Studies (Celios) Bhima Yudhistira, quoted from Kompas.com, Sunday (27/2/2022). However, said Bhima, price adjustments still depend on entrepreneurs in the food and beverage sector, whose main ingredients are mostly wheat. He hopes that the price increase will not occur evenly, considering that residents are already burdened with increases in several other commodities, such as beef, cooking oil, and soybeans.

Description
KOMPAS.com - The war that took place between Russia and Ukraine also had an impact on Indonesia. Gajah Mada University (UGM) economist Eddy Junarsin said the war had a serious impact on Indonesia. This is because of the effects of globalization. As a result of globalization, the positive effect received by Indonesia is being able to enjoy technology that is as good as other countries as well as world-class education. Meanwhile, the negative effects of globalization, if something happens in other parts of the world, it will quickly impact Indonesia. "It's like this, the war is far away in Europe, but in Indonesia it has had an extraordinary impact," said Eddy when contacted by Kompas.com, Wednesday (2/3/2022).

1.The Decline Of Rupiah Exchange Rate

1. The decline in the rupiah exchange rate Eddy explained that the impact of the war would be felt on the flow of money in Indonesia. So, if the war is protracted, it can cause the rupiah exchange rate to weaken against the US dollar. "So it is possible that if the war drags on, the rupiah will depreciate against the US dollar," he said. "So the weakening rupiah exchange rate now is not because of the poor performance of the rupiah, but because of the impact of the war," he continued.

2.The Decline of Capital Market

The capital market will automatically follow trends experienced by the rupiah exchange rate against the US dollar and current global issues. Eddy explained that it is possible that the Indonesian capital market will experience a slight decline, this is reasonable because the whole world is also experiencing the same trend. However, funds from foreign investors in the Indonesian capital market are still relatively stable. "But the last few days we have seen net buying, so foreign net buying is still higher than net selling, so it's still okay," he said. "Although, yesterday it recorded more than 100 billion rupiah net buying by foreigners, but the withdrawal of dollars back to their home countries through net selling has created fear for the Indonesian capital market," he continued.

3.Lost Income Due to Decreased Export
One of the impacts of the Russian-Ukrainian war that was most felt for Indonesia was in the export sector. Eddy said, the value of Indonesia's exports to Russia in January was at US$170 million, while for Ukraine it was US$5 million. "It's not bad, it's a month, you know, per month," he said. Because of the war, Russia will be subject to a trade embargo, so Indonesia cannot export to Russia. "If Indonesia cannot export to Russia, Indonesia will lose revenue of US$170 million from exports of rubber, animal fat and cocoa," he said. This becomes a problem if the embargo is carried out for months, so that Indonesia loses export places.

4.The Impact of Rising Oil Prices On The State Budget

Furthermore, with the Russian-Ukrainian war, it also indirectly affected the Indonesian State Revenue and Expenditure Budget (APBN). With Russia's embargo, it is certain that oil prices will skyrocket. Eddy estimates that the current price has exceeded US$100 per barrel. Indonesia's state budget itself assumes the value per barrel of oil is around 60-65 US dollars. "If it's like that, you can just imagine it, it means that every increase of 1 barrel is an increase in fuel subsidies and compensation," he said. Also read: US-Russia Relations are Heating, Here's a Military Comparison of the Two In fact, the Indonesian State Budget subsidizes fuel, kerosene subsidies, and LPG subsidies. Each increase of 1 dollar per barrel will burden the state budget by more than Rp. 2.5 trillion, for kerosene it is around Rp. 50 billion, while for LPG it is Rp. 1.5 trillion. "Just imagine, this has gone up by 30 barrels, right? From the assumption that the State Budget is only multiplied," said Eddy. "Perhaps that is the most difficult time for the government," he added.

4.Increase in Imported Wheat Commodities
In addition to oil prices, it is likely that wheat commodity prices will also increase. The reason is, Indonesia imports wheat from Ukraine which is used as the main ingredient for making bread to instant noodles. Indonesia's wheat imports are relatively high, according to data from the Central Statistics Agency (BPS), Ukraine is in first place as a wheat importer to Indonesia. Overall in 2020, Indonesia's total wheat imports were 10.299 million tonnes.

Thus, Ukraine contributes to more than 20 percent of the wheat stock in the country. "This is what needs to be anticipated. Some of our food products are quite dependent on wheat. So it can affect selling prices, for example instant noodles, or bread, and other wheat derivative products," said Executive Director of the Center of Law and Economic Studies (Celios) Bhima Yudhistira, quoted from Kompas.com, Sunday (27/2/2022). However, said Bhima, price adjustments still depend on entrepreneurs in the food and beverage sector, whose main ingredients are mostly wheat. He hopes that the price increase will not occur evenly, considering that residents are already burdened with increases in several other commodities, such as beef, cooking oil, and soybeans.