VOINews, Jakarta - Indonesia' Finance Ministry discussed the implementation of disaster risk financing and insurance (DRFI) strategies with ASEAN delegates in Yogyakarta on Monday.
"We invite the delegates to discuss and share important lessons on increasing Southeast Asia's region, as it is the most vulnerable area in the world," expert staff to the Finance Minister, Parjiono, stated while opening the event.
"Disaster Risk Financing and Insurance and Adaptive Social Protection Implementation in Indonesia" is a side event of the ASEAN Finance Ministers and Bank Central Governors Meeting.
Indonesia is leading the ASEAN Chairmanship in 2023, with its Economic Track aiming to create an interconnected, inclusive, and prosperous ASEAN.
Parjiono explained that Indonesia has Disaster Risk Financing and Insurance (DRFI), which is a tool for the government to arrange disaster risk financing (DRF) through the state budget/regional budget (APBN/APBD).
"Indonesia is one of the few countries to have national strategies on disaster risk financing and insurance," he remarked.
The DRFI was launched by the ministry in 2018, though before that, Indonesia did not have DRFI.
He noted that the 2006 Yogyakarta earthquake had caused losses to the tune of around Rp29 trillion though only one percent of the total losses had been borne by the insurance sector owing to the absence of DRFI.
Rest of the reconstruction and rehabilitation must utilize the APBN or APBD, he added.
The several disaster events that Indonesia had faced in the past, which caused huge amounts of economic losses, forced the government to launch the DRFI.
In addition to the DRFI, the government launched the Disaster Pooling Fund (DPF).
"This instrument is the first in the world that is specified to collect, develop, and transfer funds for disaster handling," he remarked.
Parjiono expressed hope that the two financing schemes would offer a lesson for the ASEAN region and also globally.
"These two big concepts, which are still being developed, have made Indonesia a nation that is referred for knowledge sharing (on disaster risk financing)," Parjiono stated. (Antaranews)