Natural Disasters are a Source of Fiscal Risks

KOMPAS/HARYO DAMARDONO

The newly constructed main runway of Yogyakarta International Airport lies perpendicularly to incoming waves along the coast of the South Java Sea in Kulon Progo, Yogyakarta, as seen on 15 May 2019.

Economic losses due to natural disasters in 2000-2016 reached a total of Rp 22.85 trillion (US$1.6 billion) a year. The government needs to improve disaster mitigation in order to reduce the financial losses.

JAKARTA, KOMPAS — Critical infrastructure and public buildings should no longer be built in areas that are prone to major earthquakes and tsunamis as they are vulnerable to heavy damages if there is a major disaster. In addition, it could cause great financial losses as the vital infrastructure and public buildings were built at a great expense.

So far, natural disasters have become a source of fiscal risk for the state budget. Direct economic losses due to natural disasters in 2000-2016 reached Rp 22.85 trillion (US$1.6 billion) a year, while the realization of disaster mitigation reserve funds in the 2005-2018 state budget totaled only around Rp 2.5 trillion a year.

In comparison, the 2004 earthquake and tsunami in Aceh required Rp 51.4 trillion for rehabilitation, while the state budget could provide only Rp 3.3 trillion or 7.9 percent of the total loss. The same thing happened when an earthquake occurred in Yogyakarta, which caused a financial loss of Rp 26.1 trillion, while the state budget could only cover Rp 2.9 trillion or 11.1 percent of the total loss.

The state budget director general at the Finance Ministry, Askolani, said in Jakarta on Friday that the government had paid serious attention to disaster mitigation.

"In 2019, natural disaster reserve funds doubled to Rp 15 trillion. That is outside of the National Disaster Mitigation Agency\'s budget of Rp 610 billion and the premium for the first stage of disaster insurance, which reached a total of Rp 1 trillion," he said.

KOMPAS/BAHANA PATRIA GUPTA

An officer checks the KM 603-KM 604 section of Kertosono-Ngawi toll road, which became submerged due to flooding in Balerejo district, Madiun regency, East Java, Thursday (7/3/2019). Flooding in Madiun regency inundated 38 villages in 8 villages at a height reaching 3 meters in a number of locations.

The government began insuring state assets to reduce the losses from disasters. Disaster insurance will be realized in stages until 2023. This step is expected to reduce the burden on the state budget in the event of a major disaster.

Strengthening mitigation

According to tsunami researchers from the Center for Marine Research and the Agency for Research and Human Resources at the Maritime Affairs and Fisheries Ministry, Semeidi Husrin, the government should strengthen Indonesia’s disaster mitigation system if buildings have already been built in risk zones.

If necessary, the buildings will be relocated like those carried out in Padang, West Sumatra. The city of Padang can be used as a reference in terms of awareness in the relocation of public and government buildings from the danger zone.

"We once analyzed the tsunami vulnerability of vital infrastructure in the city of Padang. At that time, we successfully assessed 272 structures, more than 15 percent of which have a high and very high Relative Vulnerability Index [RVI]," he said.

After the Sept. 30, 2009 earthquake, the Padang administration conducted a study and mapping of tsunami safe zones and later, earth liquefaction. The city administration has also arranged green zones and red zones.

To address this, we have begun building new growth centers [in the green zone].

Critical infrastructure development is directed toward the green zone to the east. The red zone in the city of Padang is located 2-2.5 kilometers from the coastal area, in the western region. It is also supported by a new growth center that was prepared by the Padang city government together with the National Development Planning Agency (Bappenas) in 2018.

"To address this, we have begun building new growth centers [in the green zone], " said Padang Mayor Mahyeldi Ansharullah in Padang.

In the initial stage, the Padang administration moved the government center to the east in Air Pacah, Koto Tangah district, about 5 km from the coast, in 2013. The old city hall is located in Kampung Jao, West Padang, only about 1 km from the coast.

In 2020, said Mahyeldi, the new Padang Legislatives (DPRD) office and several local government offices will be built in the green zone. The Padang DPRD office is now in East Sawahan, East Padang, about 2 km from the coast. The program also includes the construction of a new residential area in the eastern region. School and university facilities have also begun to be relocated to the green zone.

A good example

The government, said Semeidi, must show a good example by no longer building vital infrastructure and public buildings in areas at risk of major disasters. Not only to avoid loss and loss of life, vital infrastructure is also very important to secure the emergency response process, rehabilitation and reconstruction efforts.

Learning from the Aceh tsunami, said Semeidi, most of Aceh’s vital infrastructure facilities were paralyzed. Transportation systems, communication networks and energy supplies were cut off and government facilities were destroyed, making emergency efforts and supply assistance difficult.

During the Palu earthquake and tsunami in 2018, damages to power plants and telecommunications networks, even airports, slowed down post-disaster handling. Therefore, said Semeidi, government buildings and vital infrastructure such as airports or energy sources should be built in the safest locations.

If the government continues to build critical infrastructure and public buildings on tsunami-prone coastlines, the people will eventually think the tsunami is just nonsens.

In addition to reducing economic losses from disasters, this also provides an example for the community to pay attention to risks in development.

"If the government continues to build critical infrastructure and public buildings on tsunami-prone coastlines, the people will eventually think the tsunami is just nonsense," Semeidi said.

The head of the Geotechnology Center of the Indonesian Institute of Sciences, Eko Yulianto, said the government must set an example by implementing disaster risk-based spatial planning. Do not let the spatial plan be changed only for certain interests, regardless of risk.

Eko said the revision of the Kulon Progo Regional Spatial Plan (RTRW) was thought to accommodate the construction of the Yogyakarta International Airport in a tsunami-prone zone. The regional regulation on the Kulon Progo RTRW No. 1 of 2003 clearly states, Temon district, which was chosen as the location of the airport, was an area of dry land agriculture and wetland agriculture.

"This sets a bad precedent regarding spatial planning regulations that can be changed according to interests. In fact, the tsunami risk remains there," he said. (KRN/AIK/JOL)