Fragile State Index Assessment of Economic, Defence and Administrative Conflicts Endangering States in Indonesia: An Econometric Study

Ilyasin Aditya Rahman *

Faculty of Economics and Business, UPN Veteran Yogyakarta, Indonesia.

Sri Suharsih *

Faculty of Economics and Business, UPN Veteran Yogyakarta, Indonesia.

Joko Waluyo

Faculty of Economics and Business, UPN Veteran Yogyakarta, Indonesia.

*Author to whom correspondence should be addressed.


Abstract

Indonesia's vast territory is a challenge to maintaining its territorial sovereignty. Conflict is difficult to predict so it is necessary to anticipate risks. According to the results of research conducted by the Fragile States Index in 2019, Indonesia is ranked in the third country in the worrying category. A need for a strategy in the event of risk of conflict or probability of war occurring so that the Indonesian economy can be properly recovered considering a conflict is an uncertainty that is difficult to predict in the future. The purpose of this study is to determine in terms of the risk of conflict in ASEAN (Indonesia, Malaysia, Brunei Darussalam, Singapore, Papua New Guinea, Philippines, Timor Leste, Myanmar, Cambodia, Laos, Thailand, Vietnam), ANZUS (Australia and New Zealand), United States of America and China which has an impact on Indonesia's economic stability. A need to make a conflict risk assessment in mitigating the occurrence of conflict in Indonesia. The analysis tool used is quantitative descriptive using Cross Tab analysis and Heat Map Risk. This study used secondary data for comparison of military and economic strength. The interesting findings in this study of Indonesia's population turned out to have a high influence on the country's vulnerability considering that Indonesia has ethnic, cultural, and religious diversity. Therefore, Indonesia needs to mitigate risks in the event of conflict so that in realizing the projection of Indonesia becoming the 5th largest Gross Domestic Product (GDP) country in the world in 2045 can be realized properly. The conclusion of this study Population, GDP, Official Exchange Rate, and Real Interest Rate against the Fragile States Index in Indonesia are included in High condition which means that serious conditions must be given immediate attention to minimize conflict.

Keywords: Fragile States, state defense, economy, risk


How to Cite

Rahman, I. A., Suharsih , S., & Waluyo, J. (2024). Fragile State Index Assessment of Economic, Defence and Administrative Conflicts Endangering States in Indonesia: An Econometric Study. South Asian Journal of Social Studies and Economics, 21(5), 1–15. https://doi.org/10.9734/sajsse/2024/v21i5810

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