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Public-private partnership for disaster risk management
Though Indonesia should be prepared, responsive, alert and resilient in facing any disaster, it appears that Indonesia, especially the government alone, cannot meet the constantly growing demand for services and resources needed for disaster prevention, preparedness, mitigation, response and recovery.
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Though Indonesia should be prepared, responsive, alert and resilient in facing any disaster, it appears that Indonesia, especially the government alone, cannot meet the constantly growing demand for services and resources needed for disaster prevention, preparedness, mitigation, response and recovery. (JP/Ruslan Sangaji)
I
ndonesia is one of the world’s most disaster-prone areas and is at risk of multiple hazards. Located in the seismically active Ring of Fire, the country experiences frequent earthquakes, volcanic eruptions and tsunamis. It is also prone to other disasters, such as floods, landslides and forest fires.
Though Indonesia should be prepared, responsive, alert and resilient in facing any disaster, it appears that Indonesia, especially the government alone, cannot meet the constantly growing demand for services and resources needed for disaster prevention, preparedness, mitigation, response and recovery. In fact, there is a need to look for support from other sectors of society, and for this, greater private sector involvement through a well-established public-private partnership (PPP) in reducing disaster risk is urgently needed.
Major natural disasters can and do have severe adverse economic impacts. Three large-scale natural disasters in Lombok in West Nusa Tenggara, Palu in Central Sulawesi and the Sunda Strait last year killed more than 5,840 people and economic losses reportedly reached Rp 38 trillion (US$2.7 billion), more than 1 percent of the total state expenditure in 2018.
Moreover, the rehabilitation and reconstruction costs for the first wave of earthquakes that hit Maluku are estimated at Rp 6.4 billion. This estimation has not accounted for the budget required to rebuild more than 5,000 residential and nonresidential properties as well as the disruption to the economy.
Budgetary pressures driven by disasters have both narrowly fiscal short-term effects and wider long-term development consequences. At present, Indonesia relies heavily on the state budget to finance post-disaster rehabilitation and reconstruction efforts.
According to the Global Facility for Disaster Reduction and Recovery (GFDRR), the Indonesian government has spent $300 to $500 million per year on post-disaster reconstruction. The cost during large-scale disaster years amounts to 0.3 percent of the country’s gross domestic product (GDP) and as high as 45 percent of the provincial GDP.
That amount, however, is insufficient, given the gigantic scale of the post-disaster reconstruction needs. The state budget limitation has been considered as the main factor causing the slow progress of post-disaster rehabilitation and reconstruction across disaster-affected areas in Indonesia.
