Post On : December 12, 2017
PT Reasuransi MAIPARK Indonesia fully supports APEC Seminar on Disaster Risk Financing in The Asia Pacific Region in Padang, West Sumatera on December 4-6, 2017. This event is part of the APEC Working Group on Disaster Risk Financing that goes into the series of Voyage to Indonesia in the framework of Annual Meetings of the IMF-World Bank Group in 2018. Activities attended by delegates from various countries and regional representatives in Indonesia as well as private parties were initiated by the Fiscal Policy Office, Ministry of Finance which also cooperated with PT. Reasuransi MAIPARK Indonesia and World Bank. According to Yasril Y. Rasyid, President Director of PT Reasuransi MAIPARK Indonesia, the seminar focuses on funding mechanisms for disaster risk in Indonesia as well as other APEC members, which is expected to form the basis for policy formulation to address the challenges in disaster management in Indonesia. "Considering Indonesia's geographic position as a disaster prone area, Indonesia has an urgency in developing a faster and effective disaster financing mechanism," Yasril said.
In addition to the Ministry of Finance, World Bank and MAIPARK, this event was also attended by speakers from various important elements who are concerned about disaster risk financing. There is a World Bank represented by World Bank Group Indonesia Operation Manager Rolande S. Pryce who convey one of the main tasks of World Bank is to help countries with high risk of natural disaster, to become a country that has resilience to the impact and risk of natural disaster. There are several delegations from Vietnam (APEC Chair 2017), Philippine (Chair of WG on DRFI), Papua New Guinea (Chair of APEC 2018). New Zealand, Department of Finance, Mexico, Japan - Ministry of Finance, Italy, each delivering materials related to disaster risk and financing. While for participants there are from Malaysia, Laos, Myanmar, Thailand, Cambodia. Head of Center for Regional and Bilateral Policy, Irfa Ampri, as a panelist also expressed the emphasis on the importance of discussion on disaster risk financing mechanism for Indonesia. Meanwhile, BNPB panelist Danar Widhiyani presented the ideal step in disaster risk management in the form of an understanding of Indonesia's disaster risk, improvement of risk management and investment in risk financing through the integration of disaster risk financing in the consideration of fiscal policy. There is Didik Kusnaini from Directorate General of Budget Ministry of Finance which convey weakness in mechanism of ready fund in APBN Indonesia.
Panelist from the Ministry of Agriculture, Ika Riani presented a showcase on the implementation of Rice Farm Insurance and Cattle Farm Business Insurance whose financing is still financed from premium subsidies from the Government. There are also exposure showcases from the International Finance Cooperation (IFC). Speakers from the Municipal Government include Padang Mayor Mahyedi Ansharullah who conveyed the spirit of the padang city to re-rise after many earthquakes through improved disaster risk management, as well as describe the earthquake disaster relief experience in Padang in 2009. Padang Municipality initiated the program Intelligent Disaster City with a focus on community education on disaster risk reduction. Directorate General of Budget of Ministry of Finance which convey weakness in ready fund mechanism in APBN Indonesia. Among them are limited funds, limited response speed and the difference between disaster risk financing planning and the process of APBN preparation become the main obstacles that need to be overcome in realizing effective disaster financing. There is also a panelist from the House of Representatives, John Kennedy Aziz, a member of the House of Representatives Commission VII that describes the trend of budget allocations for disaster management that is felt far from the ideal proportion and continue to decline. This fact shows the urgency to optimize the disaster management budget.
Based on data from the Ministry of Finance, Fiscal Policy Agency, the current mechanism of disaster risk financing in Indonesia is conducted through risk retention policy and risk transfer policy. Risk retention policy is done through the budgeting of ready-made funds that can be utilized at any time of the disaster. The risk transfer policy is planned through the insurance policy of State Property (BMN) and the development of reinsurance market. BMN's insurance mechanism is planned to be financed from the budget of the Ministries / Agencies managing BMN so that it is expected to reduce the burden of the budget for the risk of ex-post disaster risk. In the seminar also surfaced that the trend of budget allocation for disaster management is felt far from ideal proportions and continue to decline. This fact shows the urgency to optimize the disaster management budget. Therefore, the participation of all the competent parties in this case is required. The role of the private sector in strengthening Indonesia's financial resilience in relation to disaster management is essential, including support from the Financial Services Financing Authority (OJK).
OJK in regulating the regulations and conducting supervision related to insurance and disaster reinsurance has actually resulted in one of the regulations supporting disaster risk financing in the form of micro premium insurance scheme, insurance company reinsurance scheme. This scheme is considered to increase public awareness and participation in conducting disaster risk financing. Yasril added that currently there are still challenges of stakeholder coordination in the preparation of appropriate disaster risk financing schemes for Indonesia. "In addition to these challenges, disaster risk financing schemes in Indonesia can be maximized by requiring public participation in the scheme," said Yasril. So there is an ideal step in disaster risk management in terms of understanding disaster risk itself, improving risk management and investing in risk financing through the integration of disaster risk financing in consideration of fiscal policy. As for preparing the national disaster risk financing scheme, it is necessary to cooperate with private parties and academicians in the preparation of academic texts in preparing the scheme's legal umbrella. Once such preparations have been made, the implementation of the scheme may be undertaken with the implementation of a financing pilot project. []