Indonesia is located in the world’s most active seismic zone, the Circum-Pacific Belt, and the meeting point of three continental plates – the South Indo-Australian, North Eurasian and South Pacific Plate. ‘is.

Its geographical location has made Indonesia prone to disasters such as volcanic eruptions, earthquakes and tsunamis. Moreover, as the largest archipelagic country in the world, the climate crisis has made Indonesia more vulnerable to other natural disasters such as floods, landslides, cyclones, storms, heat waves and forest fires.

In 2018, the World Bank ranked Indonesia 12th out of 35 countries facing the highest risk of natural disasters. In addition to causing deaths, the disasters in Indonesia have also inflicted significant economic losses.

A study conducted by the Ministry of Finance in 2020 put the average value of direct damages suffered by Indonesia over the past 15 years at around 20 trillion rupees per year.

According to the Director of Spatial Planning, Land Affairs and Disaster Management at the Ministry of National Development Planning (PPN/Bappenas), Sumedi Andono Mulyo, in order to make the Indonesian nation resilient to disasters, the government continues build disaster resilience system.

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Measures taken by the government include creating an integrated database, strengthening the early warning system for disasters, raising awareness of disasters through education and improving literacy, strengthening collaboration between ministries and institutions and increasing investment and financing synergies.

In normal situations, before a disaster occurs, ministries and institutions, as well as local governments, use the state budget (APBN) and regional budget (APBD) to mitigate potential losses due to disasters. disasters.

Giving examples, Mulyo said the Ministry of Public Works and Public Housing (PUPR) has built reservoirs to control floods, the Ministry of Villages has enlightened rural communities on disaster response, and the National Agency for Disaster Mitigation (BNPB) and the Ministry of Home Affairs have worked to strengthen the capacity of regional governments to deal with disasters.

Then, the BNPB, the Meteorology, Climatology and Geophysics Agency (BMKG), the Geological Agency of the Ministry of Energy and Mineral Resources and the National Research and Innovation Agency (BRIN) endeavored to strengthen the country’s early detection system.

“Apart from this, regional governments also carried out several pre-disaster activities,” he added.

Ministries, institutions and regional governments have also collaborated to take anticipatory measures against disasters in the National Tourism Strategic Areas (KSPN).

For example, the Ministry of Agrarian Affairs and Spatial Planning was tasked with developing a detailed spatial plan for the National Tourism Strategic Zones, the BNPB was tasked with preparing disaster risk maps, and the Ministry of the PUPR was tasked with preparing evacuation routes and evacuation locations.

“They are specifically for national tourism strategic areas such as Labuan Bajo, Lake Toba, Borobudur (temple) and others,” Mulyo said.

The government has prepared a disaster reserve fund in the state budget worth Rp 5-10 trillion per year since 2004. However, the amount is insufficient considering that the average losses caused by disasters reach Rp 20 trillion per year.

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Disaster Pool Fund

To cover the financing gap, the Indonesian government launched innovative financing in the form of a common fund or Disaster Pooling Fund (PFB) in August 2021, which was marked by the publication of the Presidential Regulation number 75 of 2021 concerning the Common Fund for Disaster Management. on August 13, 2021.

The PFB is a manifestation of the government’s commitment to building fiscal resilience to deal with natural and non-natural disasters so that it does not have to use other allocations when the disaster reserve fund allocated by the state budget is insufficient.

The head of the Regional and Bilateral Policy Center (PKRB) of the Budget Policy Agency (BKF) at the Ministry of Finance, Nella Sri Hendriyetty, explained that the use of other allocations to deal with disasters could weigh on the state budget and disrupt the country’s economy. growth.

With the existence of the PFB, the state budget only funds low-risk disasters, while the PFB funds high-risk disasters.

The PFB also allows the government to regulate disaster risk financing strategies through national or regional budgets, as well as transfer risk to third parties through the insurance of government and community assets.

“The existence of the PFB should accelerate community recovery after disasters and protect those most affected, namely the poor and vulnerable,” Hendriyetty stressed.

She claimed that the government has appointed the Environment Management Agency (BPDLH) to manage the PFB with an initial fund of Rs 7.3 trillion.

The BPDLH will serve as a fund manager who will work in a professional manner and distribute funds to ministries, institutions and regional governments submitting proposals for disaster management.

The government expects that in the near future, investors’ confidence in PFB will improve, so that the funds raised will increase.

Meanwhile, in the next two to three years, the PFB will finance the purchase of insurance premiums for all buildings belonging to the ministries and institutions of the country. It will also be used for co-financing with regional governments to insure regional assets with the aim of minimizing the damage burden on the government in the event of a disaster.

These efforts should contribute to mitigating the effects of disasters that may occur in Indonesia. Community education was also seen as essential, among other things, so that people can respond quickly to disasters and insure their property to reduce the risk of disaster losses.

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