National Resilience Index Model and Public Policy Simulation

Agradecemos los comentarios de Rojas-Botero et al.1 sobre el documento de nuestra autoría titulado "Critical reflections about the Municipal epidemiological resilience index used for public policy decision-making regarding the control of the COVID-19 pandemic in Colombia"2. Reconocemos que la salud pública, entendida como la condición de bienestar de la comunidad, es a lo que deben estar dedicados todos nuestros esfuerzos como profesionales de la salud. En este sentido, la toma de decisiones en medio de una emergencia de gran magnitud, como la que enfrentamos en la actualidad a causa de la pandemia por COVID-19, requiere de un juicio ponderado y sereno que considere tanto el contexto general como las especificidades locales y que incluya la mejor evidencia científica disponible, es decir, aquella que no solo soporte las decisiones, sino que también privilegie los beneficios sobre los riesgos.

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Fiscal Resilience Index - A Proposition and Evidence of Emerging Market

RSF Conference Series: Business, Management and Social Sciences ◽

10.31098/bmss.v1i5.449 ◽

2021 ◽

Vol 1 (5) ◽

pp. 28-36

Author(s):

Yusuf Munawar ◽

Ita Nurmanti Manurung

Keyword(s):

Budget Deficit ◽

Emerging Market ◽

Principal Component ◽

Economic Stability ◽

Macroeconomic Conditions ◽

Index Model ◽

Resilience Index ◽

Pca Method ◽

Underlying Variable

Fiscal resilience is essential to maintain economic stability and sustainability. Until now, there are no mutually agreed indicators to show a country's fiscal resilience. This study aims to explore the possibility of forming the index of fiscal resiliency that captures more than one underlying variable that are more comprehensive as opposed to the most current practices that use only one narrow variable. The Principal Component Analysis (PCA) method is applied to build the foundation of the index, whilst the trial is experimentally conducted as a case study of Indonesia as an emerging market in 1995-2020. Using the PCA method produces an index model of fiscal resiliency formed by the variables of government revenue, spending, debt, and macroeconomic conditions. The use of such Fiscal Resilience Index (FRI) as the case of Indonesia in the period 1995-2020 shows a reasonably consistent result which is in line with the underlying condition of the country during such period. It gives a negative figure, which means Indonesia is in a bad fiscal condition due to its budget deficit strategy.

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