Perceived Impact of Events on Urban Household Economy

Perceived Impact of Events on Urban Household Economy

Doctor Suwardi

Universitas Slamet Riyadi Surakarta – Indonesia

DOI: https://dx.doi.org/10.47772/IJRISS.2024.807120

Received: 23 June 2024; Revised: 29 June 2024; Accepted: 03 July 2024; Published: 08 August 2024

ABSTRACT

Surakarta City held many international-, national-, and local-scale events in 2022. New economic resource flows from outside to inside town. Trade, hotel, culinary and production sectors and other service sectors move more quickly. What are the perceived impacts of such events on household economy? The author conducted face to face interview with 560 respondents in 56 survey location points. This size of sample meets the margin error criterion of 4.5% at significance level of 95%. Index approach was used to explain the result of research, as follows: (1) the perceived impact of events on household economy belongs to medium (fair) category at 5-Likert scale with total score of 1.777 and mean score of 3.17; and (2) 42.6% of respondents admitted that they obtained income and job more easily.

Keywords: Impact, economy, event, household

INTRODUCTION

The hardest problem post-corona virus disease pandemic is to revive economy. Health crisis striking every sector during 2019-2020 makes the global economy collapses. World Bank released world’s economic growth rate of -2% – 1.6% year on year in 2020. Nationally, Indonesian economy cannot break away from global economic pressure. National Bureau of Statistics released Data of Indonesian Economic Report in 2022.

Gross Domestic Product (GDP) by the enacted price reached IDR 15,434.2 trillion and GDP per capita reached IDR 56.9 million or US$3,911.7 in 2020. This figure is recorded as the growth rate of -2.07% year on year. The economic growth rate in 2021 increased slightly, 3.69%. The GDP was IDR 11,118,868.50 billion. The positive economic trend continued in 2022. The third quarter of 2022 recorded the economic growth rate of 5.72% (yoy).

Indonesian national economic condition is also reflected on Surakarta City. Surakarta Subsidiary Office of the Bank of Indonesia recorded economic growth rate of 4.01% in 2021. The increased demand/consumption of people in Surakarta, including newcomers contributes to the increased inflation in 2021 and thereby slightly higher than Central Java or National inflation, but still under control at the target of 3+1%. Meanwhile, poverty rate is recorded at 0.70% of total households existing.

The government of Surakarta City attempts to get out of the economic downturn as the effect of Covid-19 pandemic. Two activities are done to drive economic sector. The first activity is infrastructure and the second is to present various international-, national-, and local-scale events.

The funding source for physical and infrastructure construction comes not only from internal cash of city government, but it also comes more from central government, Central Java provincial government, and foreign grant. Many strategic projects have been done by the City Government in 2022, including to complete the construction of Manahan Indoor Gymnasium, to Construct a number of Elementary School buildings, and to arrange the spaces along Gatot Subroto-Ngarsopuro Street. Other projects are IKM Pasar Mebel Gilingan (Gilingan Furniture Market), IKM Semanggi, Balekambang Park, and Simpang Joglo Flyover. https://www.solopos.com/2022-lebih-siap-hadapi-pandemi-pemkot-solo-genjot-7-proyek-strategis-1228904.

A mosque constructed with the fund granted by the President of United Arab Emirates, Sheikh Mohamed bin Zayet Al Nahlan, located Ahmad Yani Street Gilingan Village of Banjarsari Sub District was inaugurated in In 2022. This mosque construction putatively took not less than IDR 5.7 trillion https://sumsel.tribunnews.com/2021/03/04/penampakan-masjid-jokowi-di-solo-yang-menelan-biaya-rp-5-7-triliun?page=3.

The inauguration and the opening of the Taru Jurug Zoo Rearrangement and Revitalization Program as the tourist and education destination on Friday (21/1/2023) is expected to increase the tourists’ visit. This zoo management cooperates with PT. Taman Safari Indonesia. It is expected to make the tourists stay longer in Surakarta City. Recently, when this article was written, Kasunanan Surakarta Palace area began to be restored as Javanese cultural and tourist destination with grant fund of IDR 21 billion and the revitalization of water tourist destination in Balekambang began with fund grant of USD 15 million or IDR 236 billion from UAE government https://regional.kompas.com/read/2023/02/14/141224778/selain-revitalisasi-keraton-solo-gibran-akan-pakai-dana-hibah-uea-untuk.

In addition to physical and infrastructural construction, the City Government attempts to present a variety of international-, national, and local-scale events. The organization of international events as cited in the City Government’s official portal https://surakarta.go.id/?p=23271 includes, among others:

1. Solo International Performing Arts(SIPA). It is a performing art festival. This event is an annual one having been held since 2009. This event has ever been stopped for two years (twice) during pandemic. SIPA involves thousands community with 100 volunteer respectively and attracts more than 30,000 persons’ attention annually. The event usually held for three days presents various programs such as dance, music, and theatre with performers coming from many Indonesian areas and event foreign countries;
2. Solo International Ethnic Music (SIEM). It is a music event performed by musicians coming from many countries all over the world and held once in two years. This event is intended to accommodate music performance and to be a creative forum for ethnic musicians. In this festival, the City Government presents a variety of Indonesian mask arts;
3. Mangkunegaran Festival Jazz(MFJ). It is a jazz music festival. This jazz music event combines traditional and modern cultural acculturation concept. This event is organized by Pura Mangkunegaran. Three aspects are offered to the audience in this event: jazz music, culinary product, and Mangkunegaran typical art;
4. Solo Batik Carnival event features batik fashion parade;
5. Solo Keroncong is Keroncong music performance held for two days on July 24-25, 2022. This event is combined with the organization of Ngarsopuro Night Market at 07.00 – 10.00 p.m. Western Indonesian Time;
6. Kirab Pusaka (the parade of relics) is held in Pura Mangkunegara on July 29, 2022. This event is an annual rites held in concomitance with the celebration of Islam New Year (the first date of Muharam of Hijriah Year).

A big national event ever was also held, the 48^th Anniversary of Muhammadiyah or Muktamar Muhammadiyah, on November 18-20, 2022. The national activity held by the second biggest Islam mass organization in Indonesia, as said by the Chairperson of Committee and the Rector of Surakarta Muhammadiyah University all at once (Sofyan Arif), was attended by at least 3 (three) million participants and supporters coming from all over Indonesia. https://www.solopos.com/3-juta-orang-dipastikan-datang-ke-solo-saat-muktamar-ke-48-muhammadiyah-1441956.

Another international event in sport field, ASEAN Paragames, has been held on July 30 – August 6. This event was attended by 2,309 participants, consisting of 1,648 athletes and 661 officials coming from 11 states in South East Asia region. To support this successful event for the disabled, the government allocated IDR 361.9 billion from its budget https://sport.detik.com/sport-lain/d-6041951/asean-para-games-2022-di-solo-diikuti-1648 atlet#:~:text=% 22 Sebanyak % 202.309 % 20 peserta % 20 terdiri % 20 dari % 201.648 % 20 atlet % 20 dan, 6 % 20 Agustus. % 20 Kota % 20 Surakarta % 2 C % 20 Solo % 2 C % 20 menjadi % 20 tuan % 20 rumahnya.

On July 2022, Surakarta City is trusted as the host of Trade Industry and Investment Working Group (TIIWG). This event is one of the G 20 Presidential activity series in Indonesia. One hundred and six delegations from 14 (fourteen) countries attended this event https://www.ayosolo.id/solo-raya/pr-1703812942/106-delegasi-14-negara-tiba-di-kota-solo-ini-rangkaian-agenda-g20.

The Surakarta City’s success in holding a variety of events is inseparable from the figure of the mayor constituting the oldest son of Indonesia’s President in the period of 2014-2024, Gibran Rakabumingraka. Gibran leads the city along with Teguh Prakoso as the deputy of Mayor since February 2021.  Gibran-Teguh couple was supported by one of political parties in Indonesia (Partai Demokrasi Indonesia Perjuangan or PDIP) in simultaneous Local Leader Election (Pilkada) in 2020. This couple won the election with 225,451 votes or 86,5% of legal votes. This couple was inaugurated on February 26, 2021 in Local Legislative Assembly (DPRD)’s Office of Surakarta City. The question to be answered in this research is “Does the events impact the household economy?”

The word “dampak (English: impact)” in Indonesian Big Dictionary (KBBI: 2010) is defined as bump, influence or effect leading to either positive or negative consequence. The influence of power is caused by something in the form of either people or goods. Impact will create an individual’s character, trust, or action. Meanwhile, influence or effect is defined as a causal incidence or reciprocal relation. There are cause and effect. There is a factor impacting and there is a factor impacted. The source of impact can be traced from the social impact terminology. It can originate from either internal or external factor or both of them simultaneously. Internal impact is the one with the source coming from inside the community. Meanwhile, internal impact is the one coming from outside community.

The word of impacts has negative and positive characteristic. External impact is divided into two: positive and negative externalities. Positive externality is a beneficial effect of an action done by an individual on another without the compensation from the disadvantaged one. Meanwhile, negative externalities are an effect on another not receiving the adverse compensation (Mangkusubroto; 2001)

Some experts argue about understanding the impact. Khisty C. Jotin and B Ken Lail (2006) explain impact in the scope of service, impact is an effect of service on environment and likewise, the region catered on. Impact can be seen from the change of customer behavior or customer environment following the experience with service received.

Impact on organizational perspective defined as a strong effect of an individual or a group of individuals in doing the work assignments in their position. The impact can be seen from the significant change in job performance and output gained. The impact of such change can be either positive or negative. Negative change (Gorys Kerap; 2008)

The term “impact”, by Otto Soemarwoto (2004), is defined as a change due to an activity. This activity can be done in such ways as chemical, physical, biological or human activities. The definition of impact here is emphasized more on the reaction on an activity.

Some studies on public policy define impact as suggested by JE. Hosio and Irfan Islami. JE Hasio (2007) defines impact as a visible change of behavior and attitude due to a policy. Meanwhile, Irfan Islamy (2007) defines impact as an effect or a consequence of the policy implementation.

The impact of a policy can be seen from the policy process in the policy evaluation. Policy evaluation is a study conducted to measure the impact of a policy existing in the community being the target of policy. Policy planners are expected to estimate the impact of policy before the policy is implemented. Thus, it can be anticipated through several activities to mitigate the negative impact or to increase the positive one. Policy evaluation is conducted after the implementation intended to acquire information about the effectiveness of policy target gain. An policy will be effective if positive and negative impacts occur as planned (Dunn; 2016).

Evaluation of policy impact distinguish output from outcome. Output is product, service or other facilities received by a group of people (community). Community as the object of policy evaluation study can be divided into two: target and non-target of policy. Meanwhile, outcome is more similar to impact. The scope of policy evaluation study is not only limited to measuring the output of policy process but also measuring outcome. It is the out impact of a policy in the form of social economic condition or other conditions perceived by the community. If the outcome of policy includes physical objects or activities held by the government as the policy implementer, the impact is the change perceived by the community (Winarno; 2007)

Wibawa (2007) explains that the evaluation of impact pays attention more to output and impact of policy than to the policy implementation process. In relation to the impact of policy, both expected and unexpected impacts should be understood. The expected impact means that when a policy is made, the government has determined or mapped the impact to occur. The impacts putatively occurring in the policy implementation may be expected or unexpected. Moreover, in the end of policy implementation, unpredictable impacts can occur as well, either expected or unexpected (Wibawa, 1994). This argument confirms that the measurement of impact concentrates on the community as either target or non-target of policy.

Thomas R. Dye (2011), as cited in Winarno (2007), convey ideas the policy impact dimension, as follows. Firstly, policy may impact public issues and those involved. The target of public policy expectedly affected by the policy should be restricted and the expected impact of policy should be determined in the beginning of public policy making. Secondly, the policy may impact non-target conditions or groups or the goal of policy predicted before by the policy makers. Thirdly, policy will likely affect present and future conditions that will affect both target and non-target groups. Fourthly, evaluation also pertains to other elements such as cost spent directly to fund the public policy program to make the policy implemented well. Fifthly, indirect cost is assumed by community or some members of community due to the presence of public policy.

Sharpley and Telfer (2015) argue that tourism can be an effective tool for economic and social development, but only if managed properly. The authors state that tourism can provide significant benefits to local communities and regions, including increased employment opportunities, additional income, and opportunities to strengthen cultural identity and local heritage. This opinion is in line with Mow forth and Munt (2015) argue that tourism has the potential to provide significant economic, social, and environmental benefits, but often fails to achieve sustainable development goals. The results of Kusuma and Rianto’s (2018) study suggest that tourism activities can have a positive impact on the local economy, but there are still some issues that need to be addressed. The economic benefits of tourism, such as increased income and job opportunities, were reported by the majority of respondents in the Kedung Tumpang Tourism Village. However, some respondents also complained about the uncertainty of employment and unstable income. Additionally, there were concerns about the negative impact of tourism on the local environment and culture.

The basic concept of this research adopts the idea of experts that events and tourism have an impact on the economic sector. The year 2022 will see a surge in event organization in Surakarta City. However, the question remains whether the economic impact will be felt by households.

METHOD

The population of current survey research was the people living in Surakarta City enlisted in Final Voter List (Indonesian: Daftar Pemilih Tetap or DPT) of Local Leader Election of Surakarta City in 2020. Surakarta City consists of five sub districts: Banjarsari, Jebres, Laweyan, Pasarkliwon and Serengan. The sampling technique used was stratified area random sampling based on DPT of polling stations (Indonesian: Tempat Pemungutan Suara or TPS). The sampling procedure in detail is as follows: (1) 56 (fifty six) survey location points (Indonesian: Titik Survei Lokasi or TLS) were selected purposively considering the area spread rate; (2) DPT in TPS selected to be TLS is randomized to select the respondents of survey; and (3) one TLS consists of 10 respondents. The sampling frame using DPT TLS to select the sample with simple randomized technique obtained 560 respondents. The random sampling technique based on the sampling frame is in line with Eriyanto (1999). Meanwhile, the sample size of 560 qualifies the requirement of sample size with margin error of 4.5% for entire sample at significance level of 95%, according to Sugiyono (2019).

Briefing was given to data enumerator[1] before interview process. It was intended to enable the enumerator to undertake the data collecting function effectively. The material of briefing included the objective and the content of research; the discussion of questions existing in the survey instrument in piecemeal; and the simulated interview with respondents. Interview was conducted with respondents according to the list of order by name and address. The standard operating procedure of interview upholds visiting ethics and requests the availability of being the survey respondents. Interview was conducted corresponding to specified norm and instruction. Thanks and apologies were delivered for disturbing them before saying good bye and leaving. In addition to assigning data enumerator, the research also assigned a supervisor. The supervisor serves, among others, to: (1) ensure that the data enumerator has come to the location as planned; (2) select randomly the respondents having been interviewed by the data enumerator to ask whether or not the enumerator has conducted interview correctly; (3) take action if some technical fraud occurs in the process of interviewing the respondents; and (4) solve any problems occurring when the enumerator find some constraints in the field. Through this data collecting technique and procedure, the data obtained will be expectedly valid and reliable.

RESULT AND DISCUSSION

The data collection was conducted for 10 (ten) days, on February 01 – 10, 2023. Five hundred and sixty (560) respondents were successfully interviewed as planned. The distribution of respondents is as follows: (1) by gender, 46.4% male and 52.8% female; (3) by household economic status, 42.0% holder of KIS or health insurance assumed by the government, 54.8% have self-paid health insurance, and 3.2% upper-middle group; (3) by education: 7.5% have Primary Education (Elementary/Junior High Schools or SD/SMP); 69.8% have Senior High School (SLTA) Education; 22.7% have higher education; and (4) by occupation: 26.3% civil servants; 24.3% housewives; 4.6% factory employee; 22.3% informal sector worker; 2.1% street sellers (PKL); 4.3% micro-, small-, and medium-scale employers (UMKM); 0.2% large employers; and 15.9% students/college students. The data of respondents were entirely distributed well.

This research aims to find answer to the questions about the organization of events in Surakarta City along the year of 2020, whether it affects or does not affect the household economy. The author analyzed two primary data: (1) data of perceived convenience in earning living and getting job; and (2) data of the perceived economic impact of the event organization.

The perceived convenience in earning living and getting job. The author asked the respondents “Do you think finding job and earning living in this year are easier or more difficult, compared with those in last year (2021)? The respondents’ answers to this question are presented in Table 1. The author then compared the data of current research and the data of the same research in 2022 that has never been published. It is intended to get trend time series data despite the two-year research period.

Table 1. Distribution of data about the convenience in earning living and finding job in 2022 compared with that in 2021

Source: primary data (2023), and primary data (2022)

Table 1 describes the convenience in earning living and finding job in 2022 are more easy than those in 2021 and 2020. The number of respondents thinking that finding job is easier is higher (42.6%) than that in the previous year or 2021 (41.1%). The number of respondents thinking that this year (2022) is more difficult than the previous one is lower. That is 1.1% in 2022 lower than 1.3% in 2021. The number of respondents answering that “finding job is equally difficult” decrease dramatically from 40.5% in 2021 to 18.2% in 2022. These data entirely explain that the economic life condition of people improves well in 2022.

The improved condition of household economic in the term of earning living and finding job cannot be explained yet responsibly as the impact of infrastructural project and the organization of many events funded and endorsed by Surakarta City Government.

Adisamito (2013) explains that a region’s economy can be measured from gross domestic product (GDP). GDP is defined as a monetary value of product and service produced in certain period of time and certain territorial border. GDP of Surakarta City is the value of product and service produced in Surakarta region in certain period of time. It can be measured quarterly, semiyearly and yearly. GDP is estimated based on consumption rate, government expenditure, government investment, and export-import activities (incoming and outgoing values of product and service). GDP is a macro-economic measure. Further research should be conducted on micro analysis unit. Can GDP increase reach household sector? Is the economic growth as macroeconomic indicator followed by the improvement of household economy.

The data of research containing specifically the question about the organization of events along the year of 2022 in Surakarta city is described in Table 2. This data is the result of interview about the effect of events on the household economy of urban people. The author asked the following question to the respondents: “Many local-, national-, and even international-scale events haven been held in many sectors in Surakarta City Since 2022. Di you perceive the economic impact of those events in Surakarta City?”   

Table 2. Distribution of Data of Perceived Impact of Event Organization on Household Economy

Source: Primary Data (2023)

Table 2 describes that most (66.8%) urban people admitted that they perceive the economic impact of event organization. In detail, 6.8% of people highly perceive, 37% fairly perceive, and 23.0% poorly perceive the impact. Meanwhile, a relatively small number of people (33.2%) do not perceive the impact.

To analyze the data in Table 2, the author tried to transform the data into index calculation, by scoring each of respondents’ responses, with scores 5 for highly perceiving, 4 for fairly perceiving, 3 for poorly perceiving, 2 for not perceiving, and 1 not perceiving at all. However, because the response of not satisfactory at all has no frequency or has zero frequency, the author removes it from the table. Considering this response option, the author uses 5-Likert scale. The frequency of respondents’ response is multiplied by the score. Therefore, the total score is found as follows: Very Satisfactory 5 x 38 = 190; Fairly Satisfactory 4 x 207 = 828; Poorly Perceiving 3 x 129 = 387; and Not Perceiving 2 x 186 = 372. The total score is 1.777, while the mean score is 3.17.

Based on the 4-Likert Scale with the value of response option, as explained, if all respondents respond to with the lowest score (1), the total lowest score is 560 x 1 = 560.  Meanwhile, if they respond to with the highest score (5), the total score is 560 x 5 = 2,800.

Considering the calculation of lowest (560) and highest (2800) scores, the author classifies the interval class into the following category: (1) having big impact with score interval of 2,353 – 2,800, (2) having fair impact with score interval of 1,905 – 2,352; (3) having poor impact with score interval of 1.457 – 1.904; (4) having no impact with score interval of  1,009 – 1,456; and (5) having no impact at all with score interval of 560 – 1,008.  The result of research shows total score of 1,777. Therefore, the author concludes that the organization of international-, national-, and local-scale events along the year of 2022 impacts fairly the household economy of Surakarta people

This finding is in line with that of study on the economic impact of world cup event in Qatar in 2022 reported and released by Kompase.id. The organization of world soccer competition in the world cup championship in Qatar in 2022 has attracted many foreigners to come to the state. Citing the data released by the World Bank, Kompas. id explained that Qatar received US$ 15.65 billion from tourist visit, but this figure decreased to US$ 14.32 billion in 2020. A small increase occurred to 611,000 visits in 2021. Qatar’s Tourism Authority reported that 725,000 tourists have come to the state in 2022.  Through the organization of World Cup event, the tourist visit rate can expectedly increase many times. Forbes predicted that 1.2 million people would come to Qatar during the World Cup 2022 time. It was a good moment for Qatar to recover its tourism activities. Qatar has ever reached the largest foreigner visits, 2.9 million tourists in 2015 and 2016. The economic impact of world cup event, as occurring in Qatar, can be seen from the contribution of tourist visit sector to Gross Domestic Product (GDP). Tourism sector contributed 1.5% to GDP in 2020 and it increased to 4.5% in 2022 as the impact of world cup organization. https://www.kompas.id/baca/riset/2022/11/25/menakar-dampak-piala-dunia-2022-pada-perekonomian-qatar.

The economic impact of event organization can be traced into the data of big events held along the year of 2022 in Indonesia. Another event held was Presidential G20 in Bali. G20 Pedia book published officially by the Ministry of Communication and Informatics explains that there are six economic impact of Presidential G20 in Bali. They are: (1) it contributes to the increase of GDP, US$ 533 million or IDR 7.4 trillion; (2) Domestic consumption increased by IDR 1.7 trillion; (3) Foreign tourist movement reached 1.8 million – 3.6 million people and create up to 700 thousand job opportunity for culinary, fashion, and craft sectors; (4) micro-, small-, and medium-scale enterprises (UMKM) are involved in production absorbing about 33 thousand workers; (5) the  trust of global investors coming from G20 states (United States, Canada, Mexico, Argentina, Brazil, United Kingdom, Germany, Italia, France, Russia, South Africa, Saudi Arabia, Turkey, China, Japan, South Korea, India, Indonesia, Australia, and European Union) improves. https://www.indonesia.go.id/g20/kategori/g20/4177/g20pedia

A previous study has been conducted on the impact of sport events by Firdaus Hendri Prabowo Yudho, Rismanto and Risnawati (2022). Prabowo Yudho, et al., (2022) found the impact of SEA Games event organization on the economic growth of South Sumatera. The impact will be explained in detail, as follows. (1) SEA Games impacted the economy of South Sumatera by IDR 18.5 trillion. This value resulted from the increase in the investment undertaken by government and private in constructing supporting infrastructure and sport facilities. (2) The Gross Regional Domestic Product (GDRP) of South Sumatera increased by 6.07% in the second quarter of 2018. (3) The absorption of workers increased by 51,500 workers during SEA Games period. (4) SEA Games activity can be a sport event to improve tourism and the business actors’ ability of improving Indonesia’s good image or reputation in the world’s eyes.

CONCLUSION

A region’s economic growth is measured using GDP concept. The GDP variable consists of consumption, government expenditure, government investment, and export-import activities (incoming and outgoing values of product and service). The organization of events in Surakarta city is the penetration of resource in the consumption sector of product/service and capital inflow. Event is also defined as the absorption of regional government budget as the manifestation of government’s participation. Nevertheless, GDP rate is the indicator of macroeconomy. Economic development needs community participation up to household economic level.

The result of current research shows that the organization of events in Surakarta City along the year of 2022 affects significantly the household economy. The data analysis on the two indicators of research shows the proof of impact. Most people said that they earn living and find job more easily than in previous year. The analysis of the impact of events on household economic results in index score of 1,777, with mean score of 3.17, belonging to fairly impacting category.

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34. https://www.indonesia.go.id/g20/kategori/g20/4177/g20pedia

 FOOTNOTE

[1] In the context of a survey, an enumerator refers to an individual who is assigned to collect data from survey respondents or participants using a pre-prepared survey instrument. Enumerators can work in various fields, such as health surveys, social surveys, environmental surveys, or market research surveys.