"Today, we will discuss international cooperation in terms of how to finance rehabilitation and reconstruction in the event of a disaster anywhere in the world, especially in Indonesia," Vice President Jusuf Kalla remarked during a keynote speech at a dialogue session on Disaster Financing and Insurance here Wednesday.
Vice President Kalla remarked that Indonesia`s experiences in dealing with natural disasters, including earthquakes, tsunamis, landslides, and floods, prompted the government to consider a special insurance mechanism to finance post-disaster rehabilitation and reconstruction.
On the occasion, the vice president shared his experiences in leading the response to the 2004 earthquake and tsunami in Aceh Province.
He explained that two weeks after the disaster, the United Nations and World Bank immediately held a high-level conference to collect donations to support reconstruction work in Aceh.
"The most major disaster in Indonesia`s modern history is the 2004 tsunami in Aceh. Rehabilitation and reconstruction in Aceh received a UN award as one of the best disasters responses and solutions in the world," the vice president pointed out.
In the less than two months, Indonesia has been hit by devastating natural disasters in the form of earthquakes in Lombok, West Nusa Tenggara, and earthquakes, tsunami, and liquefaction in Palu, Central Sulawesi.
As a country located in the ring of fire, Indonesia is indeed an area prone to natural disasters, such as earthquakes, tsunamis, and volcanic eruptions.
Based on experience in handling major natural disasters since the Aceh tsunami 14 years ago, the Government of Indonesia needs to have a special financing scheme outside the State Budget (APBN).
Disaster insurance is a worthy option, given that the government always relies on APBN to finance post-disaster rehabilitation and reconstruction. The government also still relied on donations from other countries and foreign donors to rehabilitate Aceh after the 2004 tsunami and Yogyakarta after the 2006 earthquake and the recent Lombok and Palu earthquake.
"Hence, to ease the budget burden, let us discuss the best solution, so that the state has the opportunity to establish a good system, such as insurance for state and people assets," he explained.
State assets that can be insured, include office and government`s buildings, public infrastructure, schools, and hospitals. Thus, the 2018 IMF-World Bank Annual Meeting in Bali could offer the right moment to begin to follow up on this.
"This moment is really the right time, as disasters had struck Indonesia just a month ago. We should discuss long-term solutions to solve this problem," the vice president added.
Reporting by Fransiska Ninditya
Editing by Libertina W Ambari
Reporter: Antara
Editor: Yosep Hariyadi
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