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Govt launches natural disaster fund
For the next two to three years, the ministry will grow the PFB through reinvestments and injections.
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Rescuers search for survivors after a rain-sparked landslide killed at least three people near a Chinese-backed power plant in Batang Toru in South Tapanuli, North Sumatra, on April 30. (AFP/BNPB)
T
he government has launched a Pooled Disaster Fund (PFB) mainly aimed at reducing state spending on natural disaster relief, like earthquakes and tsunamis, which are a common occurrence in the archipelagic nation that sits on the Ring of Fire.
The government introduced the fund by issuing Presidential Regulation No. 75/2021 on a joint fund for disaster management on Aug. 13. The initial fund, taken from the state budget (APBN) and regional budgets (APBD), is Rp 7.3 trillion (US$506.42 million), according to the Finance Ministry.
For the next two to three years, the ministry will grow the PFB through reinvestments and injections, the proceeds from which will be used to purchase insurance premiums for assets, such as buildings, owned by the central government, regional administrations and public.
“The PFB is an important milestone in disaster risk management in Indonesia because it improves the capacity for disaster risk financing, especially disaster mitigation and risk transfer,” Fiscal Policy Agency (BKF) head Febrio Kacaribu was quoted in a press release as saying on Tuesday.
Indonesia faces a lot of natural disaster risks, ranging from earthquakes and floods to landslides and drought. The Finance Ministry estimated in 2020 that the direct loss incurred by various types of natural disasters over the last 15 years averaged Rp 20 trillion per year.
Read also: Disagreements plague disaster management bill
In September 2018, South Sulawesi was hit by an earthquake, tsunami and soil liquefaction that led to losses amounting to Rp 18.5 trillion.
