Natural Hazard Risk
Indonesia is located in one of the world’s most natural disaster-prone areas and is at risk to multiple hazards. Over the last 30 years, there have been an average of 289 significant natural disasters per year and an average annual death toll of approximately 8,000.
The Government of Indonesia spends $300 to $500 million annually on post-disaster reconstruction. Costs during major disaster years reach 0.3 percent of national GDP and as high as 45 percent of GDP at the provincial level. Following the 2004 Indian Ocean Tsunami, the government allocated more than $7 billion for reconstruction in Aceh and Nias and approximately $2 billion following the 2010 Mount Merapi volcanic eruption.
Climate change is recognized as a key threat to Indonesia’s development, especially for lower income groups. The country is highly vulnerable to the impacts of climate change. Rising sea levels and changing weather patterns may lead to increased uncertainty in water availability, food production, and disruptions to transport, commerce, and urban development.
The 2004 tsunami was a major turning point for the Government of Indonesia in addressing disaster risk management (DRM). Following the event, the country enacted a law on disaster management in 2007, and the National Disaster Management Agency (BNBP) was established in 2008. Support for DRM has grown, with BNPB’s budget allocation for disaster management increasing 500 percent from 2010 to 2014. Additionally, the new 2015-2019 development plan outlines the country’s disaster management policy, which aims to reduce risk, increase the resilience of national and local governments, and support communities facing disasters.
To further advance the DRM agenda, national priorities include:
- Improving the understanding and use of risk information;
- Enhancing community-driven development;
- Strengthening urban resilience;
- Developing disaster risk financing and insurance mechanisms; and,
- Continuing initiatives to strengthen the resilience of school infrastructure.
GFDRR has supported disaster recovery, risk reduction, preparedness, and financial resilience activities in Indonesia since 2008. Engagements have focused on mainstreaming DRM into national policy frameworks and plans; locally integrating DRM and climate adaptation measures; strengthening how funds are channeled in post-disaster contexts; and supporting the establishment of the Indonesia Disaster Relief Training Ground.
As part of its early activities, GFDRR helped integrate earthquake-resistant standards into technical guidelines for school rehabilitation. The guidelines were used by the education sector to repair more than 100,000 heavily damaged classrooms. GFDRR has also supported the development of innovative open-source software, including InaSAFE, a tool that guides decision-making through better natural hazard impact data and communications.
GFDRR continues to help Indonesia better manage disaster and climate risks. It is strengthening the country’s understanding and use of risk information in investment decisions across sectors and levels of government. Activities have focused on key economic sectors and community-driven development programs in urban areas. These GFDRR activities have helped mainstream disaster resilience into World Bank-financed projects, including a $350 million road improvement project in the earthquake and landslide-prone corridor of Western Sumatra, and a $150 million urban community-driven development project.
In addition, GFDRR is supporting the implementation of a comprehensive risk financing framework to provide flexibility for fund recovery programs. It is also supporting the scale-up of a safer schools initiative by institutionalizing standards and procedures and creating a support system for new construction and the retrofitting of existing learning facilities.
GFDRR anticipates continued demand to strengthen disaster and climate resilience in the following areas:
- Building resilience in the country’s rapidly growing urban areas;
- Continuing to integrate risk considerations into new and existing educational investments while retrofitting at-risk schools; and,
- Exploring financial protection strategies.