Indonesia: West Sumatra and Jambi natural disasters - damage, loss and preliminary needs assessment

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Executive Summary

On 30 September 2009, a powerful magnitude 7.6 earthquake struck West Sumatra province. Damage was widespread, affecting 13 out of 19 districts and killing over 1,100 people. The worst affected districts are the cities of Padang and Pariaman (Kota Padang and Kota Pariaman), as well as the district of Padang Pariaman (Kabupaten Padang Pariaman). Historical data on seismic activity over the past 200 years show that West Sumatra is particularly prone to earthquakes, due to its location at the convergence zone of four major tectonic plates. The geology of the region combined with densely populated settlements in zones of higher ground amplification help to explain the vast destruction of the earthquake, both in terms of lives lost and material damage and losses.

Damage and losses in West Sumatra are estimated at Rp 21.6 trillion, equivalent to about US$2.3 billion. Almost 80 percent of all damage and losses are recorded in the infrastructure sectors (including housing), followed by the productive sectors with 11 percent. In line with similar disasters, housing is the worst affected sector, with damage and losses estimated at over Rp 15 trillion. In the productive sectors, trade is the worst affected, reflecting the fact that Kota Padang, a major trading hub in the region, was badly affected by the disaster.

Over 88 percent of all damage and losses are of a private nature. This is primarily the result of large damage and losses in the housing sector, which is primarily privately owned, and by the fact that many of the productive sectors (trade and industry, tourism, and the financial sector) suffered large losses. The private sector also plays a significant role in the provision of health and education services.

Many government buildings collapsed in Kota Padang and in the other districts causing total damage and losses estimated at Rp 0.6 trillion. The destruction of many government buildings paralyzed government services in the immediate aftermath of the earthquake. Two weeks later essential public services at the provincial and district level have been restored. In many instances services are being provided in tents and temporary offices, which is resulting in delays particularly in the provision of services at the nagari level. Implementation of existing government development plans is likely to be disrupted for the remainder of the year and administrative procedures for budget reallocations may prevent local governments from restructuring their programs in a timely manner. Local government will need to identify physical spaces to maintain an adequate level of public services. The capacity of local governments needs to be strengthened in a number of areas to cope with increasing responsibilities in the reconstruction effort.

Infrastructure suffered damage and losses estimated at Rp 16.8 trillion, primarily the result of damage to housing, in line with the extent of damage observed in other similar disasters. About 31 percent of the total housing stock in the affected districts has been either destroyed or damaged in some way, amounting to about 115,000 houses destroyed and over 135,000 houses damaged. The reconstruction of housing should be based on compliance with existing building standards, including accurate hazard maps to identify risk areas that may not be appropriate for building. Damage to transport infrastructure is relatively limited and concentrated in roads and bridges. Most roads were accessible after a few days, although transport may be slower due to repair work in many areas. Key roads in mountainous areas that are threatened by landslides will require extensive and immediate construction to remediate. The water and sanitation sector suffered severe losses, estimated at almost Rp 0.5 trillion, affecting both the publicly owned utilities (PDAMs) as well as private and community water sources. A large number of households suffered disruptions in the supply of water for several weeks, and a month after the disaster the supply has not been fully restored. The sanitation sector has suffered different degrees of damage, increasing the risk of contamination of water sources due to their close proximity.

Damage and losses in the social sectors are relatively limited, at about Rp 1.7 trillion. Many education and health facilities in the province are damaged, Kota Padang and Kab. Pariaman being the worst affected areas. The health and education sectors each account for about 40 percent of damage and losses in the social sectors, with the remaining 20 percent being sustained by religious and cultural facilities, as well as facilities for the poor and vulnerable. Over 50 percent of the damage and losses are of a private nature, driven by the damage caused to mosques and other religious buildings but also to private education and health facilities. Transitory arrangements have allowed the resumption of public services in the education and health sectors, although there are concerns regarding the quality of services being provided in such difficult conditions. Preliminary assessments of damage show that it was often caused by relatively weak structures that failed to withstand the force of the earthquake. Going forward, it will be important to ensure that schools and health facilities are built in accordance with seismic building standrads.

The earthquake had a significant impact on the productive sectors with damage and losses amounting to an estimated Rp 2.4 trillion. Among these sectors, the trade and industry sector has been the most severely affected. The earthquake has disrupted thousands of small- and medium-sized enterprises (SMEs), mainly located in the urban areas of Kota Padang and Kab. Pariaman, while the larger enterprises have suffered relatively lightly. Many traditional and modern markets sustained significant damages. More than 70 percent of the hotel facilities in Kota Padang have been damaged or destroyed. Most tourism-related businesses have suffered from a decline in tourist arrivals following the earthquake. The finance sector has also suffered significantly: more than 2,000 borrowers are affected and a portion of the loan portfolios of the banking institutions are expected to become non-performing. However, the earthquake had less of an impact on the agriculture sector, although damage to irrigation systems and fishponds has affected the livelihoods of many rural and coastal households. The recovery in the trade and industry and tourism sectors will pose a significant challenge. Targeted assistance will be required to help SMEs within these sectors to resume their businesses and for many rural and coastal communities where families have sustained significant damage to their houses and productive assets so that they have the resources to restart their livelihood activities.

At the macro level, the disaster is likely to have only a limited impact on the region?s economy. The earthquake will not have a major impact on the national economy, given that West Sumatra accounts for less than 2 percent of national GDP. Similarly, it will not have a significant impact on other macroeconomic fundamentals, such as the balance of payments or the fiscal deficit. At the regional level, the impact is likely to be more pronounced, although initial estimates also show a limited impact on the region's economy, lowering GRDP growth by 0.3 percentage points in 2009 and 1.0 percentage in 2010. The disaster may have a significant impact in terms of revenues collected by the districts and the province. Own-source revenues account for 43 percent of the province's total revenue and 13 percent in Kota Padang. The nature of this revenue (e.g. property and vehicle taxes) suggests a significant reduction in revenues at the provincial and district levels at a time when resources are most urgently needed to cope with the disaster. Appropriate mechanisms should be put in place through fiscal transfers and deficit financing to allow local governments to respond more effectively to the disaster.

On average, the negative impact on employment is likely to be limited, as has been observed in other post-earthquake situations. Preliminary estimates project a decline in employment of 41,000 people, particularly in the trade and industry and tourism sectors. This relatively limited impact at the macro level is likely to go hand in hand with a deterioration of welfare in the worst affected populations and economic sectors. The poverty level in the province is projected to increase by 1.5 percentage points to almost 10.8 percent in 2010, reversing the progress made over the past few years. The impact is likely to be localized, and particular attention should be paid to the poor and vulnerable in the worst affected districts, since coping mechanisms at the community level will be put under stress given that the destruction and job and income losses are concentrated in certain locations.

Assisting affected communities to meet basic needs, such as food, shelter and water is a priority in the early recovery phase. This is to a large extent being accomplished already. A survey conducted shortly after the disaster at the community level provides invaluable information about the needs of communities for the early recovery phase. At the community level, the availability of water and temporary shelter are highlighted as priority areas for government intervention in the immediate short term. Loss of livelihoods and jobs were also expressed as key concerns by the community. The next phase of the recovery period should ensure the normal functioning of public services at all government levels, including schools and health centers. This should be combined with the provision of temporary accommodation for those affected by the disaster, as well as targeted assistance to victims that have lost their livelihoods, e.g. through interim income generating activities. The reconstruction of transport, infrastructure, and housing, as well as economic recovery, will be part of the Government's reconstruction action plan for the region.

The overall needs to rebuild the province are estimated at Rp 23 trillion, with the government?s shared estimated at Rp 7.1 trillion. The National Disaster Management Agency or Badan Nasional Penanggulangan Bencana (BNPB) will lead in coordinating and facilitating the recovery, reconstruction and rehabilitation, while implementation of the recovery program will be led by the provincial governments in West Sumatra and Jambi. After the emergency phase, the Government has committed to assisting affected communities in the early recovery phase, while at the same time starting the reconstruction and rehabilitation efforts of the region. Preliminary needs assessments recommend the use of community-driven approaches to rebuild housing, community infrastructure, irrigation systems, schools and health centers where appropriate, bearing in mind that some badly affected communities may not have the capacity to carry out such activities and a different approach may be necessary. The delivery of assistance should address the specific needs of particularly vulnerable groups, such as children, the elderly and families without the social protection associated with traditional kinship ties.

In the housing sector, which accounts for around 78 percent of all needs, the Government has adopted a policy of assistance for the rebuilding of housing. This assistance will provide Rp 15 million for destroyed or badly damaged housing, Rp 10 million for medium-damaged housing and a maximum of Rp 1 million for lightly damaged housing. However, this may prove to be insufficient to ensure that the rehabilitation of houses damaged or destroyed by the earthquake achieves seismic resistant compliance. The private sector has been badly hit, in particular the trade and industry and tourism sectors. The disaster will, at a minimum, affect the jobs and livelihoods of many people in the affected districts in a transitory manner. Although the Government is not obliged to compensate the private sector for damage and losses suffered as a result of the earthquake it still has an important role to play in facilitating the recovery of the private sector, as well as in providing direct assistance to farmers, fishermen and small entrepreneurs who have lost their capital and may not be able to cope with the shock on their own.

The West Sumatra earthquake was followed by a magnitude 7.0 earthquake the next day in Jambi province. Damage in Jambi has been concentrated in Kab. Kerinci and damage and losses arising from this disaster are relatively limited. Three people are reported dead, with damage and losses estimated at slightly over Rp 100 billion. As in the case of West Sumatra, a large share of the damage is to housing, with little information is yet available on damage to infrastructure and the productive sectors. This is the fourth major earthquake to hit Jambi in the past 15 years, suggesting a significant need to focus on improving the resilience of the province to such disasters in the future.

Government efforts should improve the region?s preparedness to face similar disasters in the future. These are unlikely to be the last earthquakes to affect the region, given both its history and the recognition that its location is in an area that is prone to seismic activity. The region needs to prepare itself better for future disasters. This will entail efforts at all government levels to become more resilient to such events in the future, as well as to be able to respond quickly and effectively when such events occur. In 2007, the Government passed Disaster Management Law No. 24, which provides the foundations for the development of the Indonesian disaster risk management system, including the establishment of the BNPB. One of the fundamentals of a good recovery process is to integrate disaster mitigation and preparedness into the relief, rehabilitation and development process to reduce vulnerabilities in the community. Disaster Risk Reduction (DRR) measures for recovery, reconstruction and rehabilitation represent a holistic approach for fine-tuning development processes through prevention, mitigation and preparedness combined with post-disaster response activities.

One of the most urgent DRR measures needed in West Sumatra is an effective tsunami warning and evacuation plan, including public education regarding evacuation routes. This is all the more important given that some seismologists believe that the potential remains for an even larger earthquake to strike West Sumatra, possibily with a magnitude of up to 8.5. The likelihood of such a major earthquake triggering a tsunami is high, and therefore reconstruction and rehabilitation should be undertaken with this possibility in mind.

A reconstruction strategy that reduces risks should entail the rebuilding of livelihoods, as well as efforts to promote and implement risk reduction measures in the reconstruction and rehabilitation effort. In practical terms, rebuilding livelihoods translates into a coordinated approach to provide income-generating activities for affected communities, which often take the form of cash transfer programs, cash-for-work or micro-finance activities. Measures to reduce the risks of disasters include the promotion of hazard-resilient construction for new buildings, especially schools and health centers, and the enforcement of strict building standards, especially for critical infrastructure. In addition, effective DRR requires addressing the existing issue of hazardous buildings, starting first with seismic retro-fitting of school buildings, health centers and key government buildings. Recognition of the importance of a DRR strategy should result in the elevation of DRR as a policy priority with the corresponding allocation of resources and using risk and vulnerability assessments in spatial planning and the planning of new infrastructure and facilities. The insurance industry can also play an important role by ensuring that insurance premiums properly reflect the risks of poor construction or non-compliance in insured buildings. Also important is the need to strengthen the capacity of local government institutions to protect ecosystems that can serve towards reducing disaster risks and combating environmental degradation that can amplify disaster risks.