Mesakh Roi Pratama Ginsu, Laura Amaria Dwiputri Julianti, Fachry Haris

Fiscal strategies amid global uncertainty: Strengthening indonesia’s economic and investment resilience through a national supply chain resilience roadmap

Introduction

Fiscal strategies amid global uncertainty: strengthening indonesia’s economic and investment resilience through a national supply chain resilience roadmap. Indonesia's fiscal strategies for economic & investment resilience amid global uncertainty. Learn how infrastructure and efficient policy implementation bolster national stability.

Abstract

Background: When global conditions are unstable, policy-making driven by urgency and efficiency is necessary to maintain national stability, particularly in Indonesia. In the context of a trade war, the key threats to address are declining investment and weakening economic activity. One of the instruments that can be utilized is fiscal policy. Nevertheless, fiscal resources are limited. Hence, the main questions to be answered in this article are: (1) What’s the most significant sector that affects economic growth and investment performance? (2) What’s the strategy and solution that can be implemented to achieve the fiscal efficiency point? Methods: To answer the first main question, use a literature review. All literature used in this article is from the Scopus index database. On the other hand, the authors also apply the adaptation of the National Supply Chain Resilience Roadmap (NSCRR) method while combining  it with a literature review to formulate a fiscal policy strategy that ensures efficient implementation. Findings: Supported by existing literature, the authors identifies infrastructure as the sector with the highest significance in boosting economic growth and investment in Indonesia. Additionally, authors propose three complementary technical strategies to ensure the efficient implementation of fiscal policy. These three strategies include the Fiscal Deficit Reduction and Accountability Reform System (FIDARS), the National Integrated Smart Government System (NISGS), National Infrastructure Technology Transfer Scheme (NITTS) Conclusion: To attract FDI, investment in public goods such as infrastructure is empirically proven to have a more massive impact and is more efficient due to the vast fiscal multiplier that is greater than in other sectors.  Yet, the fiscal allocation needs to be implemented strategically and efficiently by using the three strategies mentioned above. Novelty/Originality of this article: The new adaptation of NSCRR to create fiscal strategies has not been written before.

Review

This article addresses the critical and timely issue of strengthening Indonesia's economic and investment resilience amidst global uncertainty, particularly in the face of declining investment and economic activity driven by global trade tensions. It posits that fiscal strategies are essential instruments, despite limited resources, and seeks to identify the most significant sector for economic growth and investment, alongside efficient fiscal implementation strategies. The paper's focus on policy-making driven by urgency and efficiency to maintain national stability makes it highly relevant for policymakers and economists dealing with contemporary global challenges. Employing a methodology that combines a Scopus-indexed literature review to identify key economic sectors and an adaptation of the National Supply Chain Resilience Roadmap (NSCRR) for strategy formulation, the authors identify infrastructure as the paramount sector for boosting economic growth and investment in Indonesia. The study proposes three technical strategies to enhance fiscal efficiency: the Fiscal Deficit Reduction and Accountability Reform System (FIDARS), the National Integrated Smart Government System (NISGS), and the National Infrastructure Technology Transfer Scheme (NITTS). The claimed novelty of the article lies in its innovative adaptation of the NSCRR framework to construct these fiscal strategies, an approach not previously documented in the literature. The paper convincingly argues for the strategic importance of investing in public goods like infrastructure to attract Foreign Direct Investment (FDI, citing its empirically proven massive impact and high fiscal multiplier. The proposed strategies (FIDARS, NISGS, and NITTS) offer concrete pathways for ensuring efficient fiscal allocation. While the article clearly highlights the urgent need for robust fiscal policy and offers relevant solutions, the abstract could further elucidate the precise mechanism of the "new adaptation of NSCRR" and how it directly informs the design and selection of the specific fiscal strategies. A clearer articulation of this link, beyond just a general combination with a literature review, would strengthen the unique contribution and demonstrate the direct utility of the adapted NSCRR framework in this fiscal context. Nonetheless, the paper presents a valuable framework for navigating economic instability and enhancing national resilience.

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