Kuta, Bali, (ANTARA News) - Minister of National Development Planning/Head of the National Development Planning Agency (Bappenas) Bambang Brodjonegoro said large-scale natural disasters have the potential to increase the number of poor people so that a contingency plan is needed to overcome them.

"As in Palu, Central Sulawesi, many affected people cannot do economic activities because they are still traumatized," Brodjonegoro said at the Inclusive Economic Growth international conference: Reducing Poverty and Inequality, as part of the 2018 IMF-WBG Annual Meetings in Kuta, Bali, Wednesday.

Brodjonegoro explained that natural disasters that occurred in an area made the economy in the region ineffective, causing people`s income to decline.

Alternative actions or contingency plans are needed to deal with the impact of natural disasters that have the potential to increase poverty.

The government has ensured the establishment of a disaster risk financing and insurance scheme in 2019 in an effort to deal with the impact of natural disasters quickly.

Brodjonegoro explained that disaster insurance was carried out by mobilizing funds from outside the state budget to be able to help areas affected by the disaster.

"Usually, we have schemes where the area is prone to disasters; then, the government pays a kind of premium every year, which is managed by insurance or fund collectors," he said.

When there are events in the area, the funds that have been collected will be channeled to the affected areas, so that they can strengthen the funds allocated from the state budget.

Also read: Minister of Finance confirms the formation of disaster risk insurance in 2019.

Also read: The World Bank offers assistance for post-earthquake rehabilitation.

Reporting by Calvin Basuki
Editing by Otniel T, Suharto

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Editor: Suharto
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