The Asian Development Bank (ADB) approved a loan worth 500 million US dollars or around Rp7.5 trillion for emergency financing for Indonesia in the event of a natural disaster or disease outbreak such as the COVID-19 pandemic.
ADB Vice President Ahmed M Saeed said in a statement in Jakarta on Wednesday that this disaster resilience loan was beneficial because Indonesia is on the Pacific Ring of Fire and is highly vulnerable to earthquakes, tsunamis, volcanic eruptions, landslides, floods, and drought, and now the COVID-19 outbreak.
"This policy-based lending will help the government respond in a timely manner to such shocks and reduce the economic and social impact on public infrastructure and people's livelihoods, especially the poor and women," he said.
He explained that loans included in the disaster resilience improvement program offer disaster preparedness financing if there is a government declaration about a disaster emergency or health emergency.
To that end, this financing can support Indonesia's reforms in disaster risk management and health services as well as improve disaster resilience among various institutions and communities in Indonesia.
ADB Finance Sector Specialist Benita Ainabe added that the program is aimed at assisting the government in improving environmental sustainability, disaster and climate resilience, and human capital development, including health and gender equality.
"This program will help the government develop a recovery and reconstruction plan with greater certainty, reduce damage to infrastructure, and prevent casualties from falling in future disasters," he said. This program also focuses on three important reform areas, namely, first, to strengthen government policies and action plans in response to health-related disasters and emergencies, including social protection.
Second, increase the resilience of public infrastructure to disaster and climate risks, thereby reducing repair costs. And third, increase financing for disaster risk and pandemic response through insurance, improved health services, and targeted social spending.
The ADB-supported reforms will increase the share of disaster risk management in the national budget to 1 percent, or up from 0.04 percent in 2019, strengthen disaster response coordination among relevant ministries and agencies, and expand protection for vulnerable groups.
Overall, this resilience program reflects priorities for tackling climate change and reducing disaster risk, in line with the ADB's recently approved country partnership strategy for Indonesia for the period 2020-2024.
This program will complement the COVID-19 active response and expenditure support (CARES) program from ADB worth $1.5 billion for Indonesia to support the government's response in the face of the COVID-19 pandemic.
So far, ADB has also provided a grant worth $3 million under the Asia Pacific Disaster Response Fund to assist the Indonesian government in procuring essential medical equipment and supplies. (Antaranews)