Natural Disasters and Their Impact on the Economy

Ministry of Finance – Minister of Finance (Menkeu) Sri Mulyani Indrawati said that natural disasters can be one of the factors causing disruptions in the economy. He conveyed this statement at the Working Meeting (Raker) of Governors of All Indonesia with the theme Optimizing the Role of Local Government in Handling Radicalism, Terrorism and Disaster at the Bidakara Hotel, Jakarta, Wednesday (07/02).

The Minister of Finance gave an example of how natural disasters such as the tsunami in Aceh and the earthquake in Jogja affect the economy, namely the potential loss of Gross Domestic Income.

“An earthquake in Indonesia could potentially cause the loss of our GDP up to 3%, 30 billion US dollars. If we remember Aceh at the time of the tsunami, the cost was 4.5 billion dollars. When Yogyakarta experienced earthquake, it lost 30% of its regional GDP, ”said the Minister of Finance.

In his presentation entitled Disaster Management and Terrorism Funding Policy, the Minister of Finance explained that geographically, Indonesia is always at risk of earthquakes that are seismic and volcanic in nature. Indonesia is also a country flanked by two of the world’s great oceans. Indonesia’s rainfall of around 2000 mm per year is also among the highest in the world for an archipelago country.

“Therefore, the potential for natural disasters such as floods, earthquakes and earthquakes is a combination that must be of constant concern to us. We have to live by incorporating that this potential risk is always present in our country and how we can design a development program that remains resilient, the term resilience, “he explained.

The minister added, for 2018 the government has a Disaster Management Priority plan including strengthening the capacity of infrastructure to handle disasters, recovery of disaster area funds, structuring the environment and space and strengthening institutions especially in the regions.

Source: https://www.kemenkeu.go.id/publikasi/berita/bencana-alam-dan-pengaruhan-terhadap-perekonomi/