JAKARTA - The government through the Minister of Finance (Menkeu) Sri Mulyani revealed that natural disasters have a significant impact on people's lives.
Moreover, Indonesia is located in a geographical area that tends to be disaster-prone.
On that basis, he said the government continues to review various policies that can minimize the impact, one of which is by strengthening financial instruments.
According to him, the effects of natural disasters have the potential to disrupt the economy widely if they are not managed properly.
"Natural disasters have domino effects that can cause financial disasters, whether it's personal finance because people have lost their assets, or regional finances and state finances," he said at the 2023 National Disaster Management Coordination Meeting in Jakarta, Thursday, March 2.
He explained, on that basis, the government has now compiled a source of disaster management funds originating from the APBN and APBD.
In addition, there are also sources of funds met through non-APBN instruments.
"This instrument is provided through a standby loan scheme and also the implementation of the risk transfer (risk transfer)," he said.
Most recently, the government is now pushing for funding sources originating from joint funds or commonly referred to as pooling funds.
This refers to Presidential Decree Number 75 of 2021 concerning Joint Disaster Management Funds.
"Poolating funds are joint funds for disaster management sourced from the APBN, APBD and other sources used to support and complement disaster funds," he said.
The Minister of Finance added that the funds collected will later be included in investment instruments whose proceeds can be used to fund disaster management activities.
"So if there is a disaster, you can respond quickly. Meanwhile, areas that are not affected by the disaster can help because the funds are not used," he asserted.
According to VOI records, the disaster management funds set by the government are still quite far from the ideal value.
Based on data released by the Ministry of Finance, it was revealed that the APBN only budgeted IDR 5 trillion to a maximum of IDR 10 trillion per year.
That amount is less than the average value of direct damage caused by disasters in the last 15 years reaching around IDR 20 trillion per year.
Therefore, the pooling fund scheme is part of the government's strategic plan to mitigate or overcome the impact of disasters in Indonesia.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
