Unveiling Successes and Shortcomings: A Critical Review of Disaster Resilience Financing in the Aftermath of the 2018 Central Sulawesi Earthquake and COVID-19

Abstract

Indonesia, highly vulnerable to geophysical and hydro-meteorological hazards, has experienced over 20,000 disasters in the past two decades, resulting in annual losses averaging Rp 20 trillion. The devastating 2018 Sulawesi Tengah earthquake alone caused economic losses of Rp 14 trillion, and the COVID-19 pandemic further led to a staggering budget deficit of Rp 1 quadrillion over two years. In response, the Indonesian government introduced the Disaster Risk Financing and Insurance (DRFI) strategy to strengthen disaster financing and reduce pressure on the national budget. This study employs a descriptive-qualitative approach to thoroughly examine the implementation processes and dynamics of the DRFI strategy, assessing its effectiveness in managing disasters. By identifying successes, challenges, and opportunities for improvement, this research seeks to provide valuable insights for enhancing future DRFI implementations. These findings not only stand to benefit Indonesia but also offer crucial guidance for other developing countries striving for better recovery and resilience against growing disaster risks.